Fiscal Note
This resolution would authorize a $1,372,000 loan to GI Clinic, LLC ("Developer") for the redevelopment of the southeast corner of the former Erdman property located at the southwest corner of University Avenue and Whitney Way. The redevelopment consists of an approximately 60,000 SF medical and commercial office building being leased by the University of Wisconsin Hospital and Clinic Authority for a Digestive Health Clinic and 265 parking stalls ("Project"). This loan would be repaid through incremental taxes generated by the Project and represents approximately 29% of the present value of all incremental taxes anticipated from the Project throughout the 27-year life of TID #41, created on September 6, 2011. The TIF Loan is contingent upon evidence of TID base value certification being provided by the Wisconsin Department of Revenue, anticipated in the first quarter of 2012.
Funds to capitalize this loan are included in the 2012 Executive Capital Budget of the Planning, Community and Economic Development Division, Project No. 13, "TID 41 - University/Whitney," Account No. 824101, which authorizes a total of $3.4 million in financial assistance for development projects in the TID. Funding will be general obligation debt proceeds, with the debt service to be supported by TID incremental revenues. While it is anticipated that the incremental taxes generated by the Project will be sufficient to repay the loan within approximately 5 years, the Developer is required to guarantee a minimum payment if sufficient future tax increment is not available.
The Developer is also obligated to return an equity participation payment equal to either six percent (6%) of the gross selling price of the Property, including improvements thereon, on the day of sale or seven percent (7%) of the assessed valuation of the Property, including improvements thereon on September 6, 2038 whichever occurs first, in an amount not to exceed $1,372,000.
The increment guarantee ...
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