Fiscal Note
This resolution would authorize a $4,417,000 loan to The Gebhardt Galaxie, LLC ("Developer") for the redevelopment of City-owned property located at the north 800 Block of East Washington Avenue.
The Project consists of approximately 205 apartment units, 39,000 gross square feet of commercial and retail space, a 55,000 square foot grocery, sustainable rooftop garden and approximately 501 parking stalls ("Project"). This loan would be repaid through incremental taxes generated by the Project and represents approximately 60% of the present value of all incremental taxes anticipated from the Project throughout the remaining 18-year life of proposed TID #36.
Upon completion of the Project, the City will review the Developer’s audit of project costs and financing, to the City’s satisfaction, or conduct its own audit. In the event that project costs are less than stated in the TIF Application, Developer shall make a clawback payment to the City of 50% of the difference between actual project cost and actual project financing (“Clawback”). This Clawback formula is consistent to the formula recently utilized for condominium projects over the last several years.
Funds to capitalize this loan were authorized in the 2014 Capital Budget, funded with general obligation debt (please see the Planning and Community and Economic Development agency Project No. 33, "Block 800 East Washington (TID #36)," Acc't No. 823601). The City’s General Obligation borrowing may not occur until after this TIF Loan is proposed for disbursal. Therefore, funds will be internally borrowed until they are reimbursed by scheduled General Obligation borrowing in the fall of 2014. 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.
If Developer sells or transfers the Property to a tax-exemp...
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