Fiscal Note
The proposed resolution authorizes a $1,666,000 loan to Wash Franklin, LLC, or its assigns ("Developer"). The Economic Development Division's (EDD) 2026 Capital Budget request includes TID-supported GO Borrowing for this loan. Funding for this project is contingent on Common Council adoption of the 2026 Capital Budget and adoption of a Project Plan and Boundary amendment to TID 53 (Wilson Street) in 2025.
The Project consists of approximately 223 affordable apartment units, and approximately 68 parking stalls at a total cost of $82,216,000 ("Project"). The TIF Loan would be repaid through incremental taxes generated by the Project and represents 55% of the present value of all incremental taxes anticipated from the Project over the TID’s remaining 18-year life. Developer shall seek additional non-TIF funding for the remaining balance of the $5,057,000 financing gap.
While it is anticipated that the incremental taxes generated by the Project will be sufficient to repay the loan within approximately 9 years, the Developer is required to guaranty a minimum payment if sufficient future tax increment is not available. The increment guarantee is secured by a subordinated mortgage on the property. The TIF Loan also requires that Developer be prohibited from selling or transferring the Property prior to repayment of the TIF Loan. If Developer sells or transfers the Property to a tax-exempt entity, Buyer shall pay an annual payment in lieu of taxes (PILOT) in the amount of the property tax paid as of the date of sale, frozen, until 2050.
Title
Authorizing the Mayor and City Clerk to execute a development agreement for $1,666,000 Tax Incremental Finance Loan to Wash Franklin, LLC, or its assigns to construct approximately 223 units of affordable housing and approximately 68 parking stalls located at 501 E. Washington Avenue in a proposed boundary amendment to Tax Incremental District (TID) 53. (District 6)
Body
WHEREAS the City of Madison is in the process...
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