Fiscal Note
The proposed resolution amends the Economic Development Division's (EDD) 2025 Adopted Capital Budget to increase expenses in TID 46 by $5,295,000 for an affordable housing project at 5546 Element Way. The expenses will be incurred in two ways:
1) A $930,000 TIF-guaranteed loan to EC Residential LLC or its assigns. The loan represents 55% of the present value of all incremental taxes anticipated from the Project over the amended TID’s 10-year remaining life. The TIF Loan would be repaid through incremental taxes generated by the Project. It is anticipated that the incremental taxes generated by the Project will be sufficient to repay the loan within approximately 6 years; however, 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.
2) A $4,365,000 grant to the Community Development Authority (CDA) for the purpose of providing an incentive to the Developer to maintain housing affordable beyond the mandatory 15-year affordability period. The CDA incentive includes an option for the CDA to purchase the Project after the affordability period expires utilizing this grant.
This funding is also contingent upon the amendment of the Project Plan of TID 46 in 2025.
Title
Authorizing the Mayor and City Clerk to execute a development agreement and authorizing: 1) a budget amendment to the EDD 2025 Capital Budget (TID 46) to fund a $930,000 Tax Incremental Finance Loan to EC Residential LLC, or its assigns to construct approximately 197 units of affordable housing and 151 underground parking stalls located at 5546 Element Way in the University Research Park in Tax Incremental District (TID) 46,; and 2) a budget amendment to the EDD 2025 Capital Budget (TID 46) granting $4,365,000 of tax increments from TID 46 to the Community Development Authority for the purpose of preserving affordability in the Project (District 19).
Body
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