Fiscal Note
This resolution would authorize a $1,700,000 loan to East Washington Apts, LLC, or its assigns ("Developer") and amends the 2024 capital budget for the loan. TIF funding is also contingent upon the creation of a new TID #52 (E. Washington and Stoughton Rd.).
The Project consists of approximately 192 affordable apartment units, and approximately 139 parking stalls ("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 proposed TID’s 27-year life.
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 2051.
Title
Authorizing the Mayor and City Clerk to execute a development agreement and authorizing a funding appropriation in the 2024 Capital Budget to fund a $1,700,000 Tax Incremental Finance Loan to East Washington Apts, LLC, or its assigns to construct approximately 192 units of affordable housing and approximately 139 parking stalls located at 808 Melvin Court in the 3100 block of East Washington Avenue in Tax Incremental District (TID) 52. (District 12)
Body
WHEREAS the City of Madison is in the process of creating a new TID #52 (East Washington and Stoughton Rd) during 2023; and
WHEREAS the intent and purpose of the Project Plan, among other things, is to eliminate blighting conditions and encourage...
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