Fiscal Note
Funding of $5.5 million for financial assistance for potential development projects within TID #36, Capitol Gateway Corridor, is included in the 2012 adopted capital budget of the Planning and Community and Economic Development agency (PCED) (project No. 3, "TID 36 - Capitol Gateway Corridor," Acc't. No. 823601). This Resolution will authorize the expenditure of $3,432,000. The funding source is General Obligation debt proceeds, with debt that is TIF-eligible. Due to the timing of the proposed loan, the City will likely provide the proceeds through internal borrowing prior to the City's general borrowing that will occur later in 2012, but there is little or no additional cost to utilize this funding mechanism. No additional appropriation is required.
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. (In the event the TID is not certified by the State Department of Revenue, as referenced in Item 4 of the Resolution, only the City-portion of tax increment levied on the project will be applied toward repayment of the loan; thus, in this instance, the loan repayment based only on the estimated addtional City portion of the tax increment will take an estimated 17 years in total, or will be paid off in about 2029.)
The Developer is also obligated to return an equity participation payment equal to either eight and five tenths percent (8.5%) of the gross selling price of the Property, including improvements thereon, on the day of sale or eight and five tenths percent (8.5%) of the assessed valuation of the Property, including improvements thereon on September 6, 2032 whichever occurs first, in an amount not to exceed $3,432,000, less any Clawback payment the City receives upon completion of an audit of the project costs and financing.
The increment gu...
Click here for full text