Fiscal Note
The proposed resolution amends the Economic Development Division's 2024 Adopted Capital Budget to add $344,000 in TID-supported GO Borrowing and corresponding expenditures in TID 46. The funding is needed to finance a loan of the same amount to University Park Commons II, LLC, or its assigns ("Developer"), for their development of approximately 68 affordable apartment units ("Project"). The proposed resolution further authorizes the TIF Loan to the Developer and the execution of all necessary documents to complete the transaction.
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 amended TID’s 11-year remaining life. While it is anticipated that the incremental taxes generated by the Project will be sufficient to repay the loan within approximately 8 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. TIF funding is also contingent upon the amendment of the Project Plan of TID #46 in 2025.
Title
SUBSTITUTE Authorizing the Mayor and City Clerk to execute a development agreement and authorizing a budget amendment to the 2024 EDD Capital Budget (TID 46) to fund a $344,000 Tax Incremental Finance Loan to University Park Commons II, LLC, or its assigns to construct approximately 68 units of affordable housing located at 625 Sand Pearl Lane in the former Westgate property in Tax Incremental District (TID) 46. (District 11)
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WHEREAS the C...
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