Fiscal Note
On December 29, 2004, the City purchased the former Super Saver site on Verona Road for $3,500,000. The purchase was funded with $1,500,000 of available TIF increment and $2,000,000 of general obligation borrowing budgeted for 2005.
This resolution authorizes the sale of this same parcel of property to Gorman and Co. for $1,560,000. Terms of this sale would include an initial payment to the City of $560,000, with the remaining $1,000,000 to be paid back over the next 16.5 years, with interest of 6%, if the resulting development achieves sufficient operating cash flow during that period. The obligation to repay the City will be solely that of Avalon Madison Village LLC, an entity created to construct and manage this development.
The land cost write-down of roughly $2,000,000 represents a contribution to the developer. Based on the remaining life of this TIF district, the increased taxable value of the development property is predicted to generate additional tax increment with a present value of approximately $800,000. Thus, when viewed in the context of the current TIF policy, the contribution to the developer represents about 250% of the increment generated by the project.
This resolution also authorizes the expenditure of $300,000 of the sale proceeds for a matching contribution toward the construction of a daycare center on this site. There are no additional expenditures authorized or budgeted in this TIF district. In the absence of future expenditures, sufficient increment is projected to be generated within the district to repay all costs of this land write-down. (approved by D. Brasser)
Title
AMENDED SUBSTITUTE - Accepting an Offer to Purchase from Gorman & Company, Inc. for the purchase of a City-owned property located at 4629 Verona Road (the former Super Saver site) for the development of a rental housing project.
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On September 19, 2000, the City of Madison adopted Resolution Number 57568, ID Number 27996, creating Tax Inc...
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