Fiscal Note
This resolution would authorize the City to purchase the residential properties in the Allied Drive neighborhood referred to as the "Hauk property" for a price not to exceed $6,000,000 including closing costs. In addition, it would authorize the City to contract for ongoing management and maintenance of these properties. While no amount has been specified for these holding costs, estimates have ranged from $150,000 to $250,000 per year.
Costs related to this proposed redevelopment project would be eligible TIF expenditures. However, these costs exceed the expenditures authorized in the adopted plan for the TIF district, and an amendment to the plan, approved by the Common Council and the Joint TIF Review Board, would be required to authorize TIF reimbursement. If such approval is not received, the City would be directly responsible for all costs associated with this project.
The 2006 Capital Budget authorizes expenditures of $1,000,000 in the Allied Terrace TIF District (TID #29) for redevelopment projects of this nature, funded with the available balance within the TIF fund. Therefore, funding for the first $1,000,000 of costs stemming from the proposed Hauk property acquisition is budgeted and available. This resolution amends the current budget to increase authorized expenditures by $5,875,000, funded with general obligation debt. The amendment would provide sufficient authorization to finance acquisition of the property and to pay any anticipated holding costs. The permanent borrowing would likely occur during the fall of 2006, and the actual amount borrowed would be reduced if known costs prove to be lower.
Because City acquisition of this property will remove it from the tax roll at least temporarily, the acquisition will not generate the additional increment needed to retire this new debt. The costs and debt service associated with this project would, therefore, be paid from future tax increment generated within the remainde...
Click here for full text