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File #: 46054    Version: Name: SUBSTITUTE - Authorizing the Mayor and City Clerk to execute a development agreement to fund a $343,000 Tax Incremental Finance Loan to 134 Fair Oaks, LLC or its assigns to assist in the development of an approximately 80-unit affordable housing project a
Type: Resolution Status: Defeated
File created: 2/6/2017 In control: COMMON COUNCIL
On agenda: 2/28/2017 Final action: 2/28/2017
Enactment date: Enactment #:
Title: SUBSTITUTE - Authorizing the Mayor and City Clerk to execute a development agreement to fund a $343,000 Tax Incremental Finance Loan to 134 Fair Oaks, LLC or its assigns to assist in the development of an approximately 80-unit affordable housing project approximately 80 parking stalls and approximately 2,250 square feet of commercial space located at 134 S. Fair Oaks Avenue within the boundary of TID #37 (Union Corners); and amending the 2017 Adopted Capital Budget for the Economic Development Division to appropriate $343,000 in GO Borrowing authority for TID 37.
Sponsors: Paul R. Soglin, Marsha A. Rummel
Attachments: 1. Version 1 .pdf, 2. 134 S Fair Oaks TIF Report to Council 2-28-17
Fiscal Note
This resolution would authorize a $343,000 loan to 134 Fair Oaks, LLC or its assigns ("Developer") for the redevelopment at 134 S. Fair Oaks Avenue in the existing TID #37 (Union Corners) boundary.

The Project consists of approximately 80 apartment units (68 affordable and 12 market rate) and 2,250 square feet of commercial space and approximately 80 parking stalls ("Project"). This loan would be repaid through incremental taxes generated by the Project and represents approximately 55% of the present value of all incremental taxes anticipated from the Project over the 16-years of life remaining in TID #37.

Within 30 days of closing, Developer shall provide to City, a certified pro forma with final sources and uses (“Certified Pro Forma”). TIF funding will be contingent upon verification that the project has a gap in the amount of the TIF Loan based on the total sources and uses. Should the gap be less than the TIF Loan, then the TIF Loan shall be reduced to the amount of the gap shown in the Certified Pro Forma.

Funding of the $343,000 TIF Loan to the Project requires an amendment to the 2017 Capital Budget authorizing the expenditure. 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. The loan will be funded by GO borrowing that will be repaid through future incremental revenue with TID 37.

The increment guarantee is secured by a subordinated mortgage on the property. The TIF Loan also requires that Developer be prohibited from selling or transferring the Property prior to repayment of the TIF Loan. If Developer sells or transfers the Property to a tax-exempt entity, Buyer shall pay an annual payment in lieu of taxes (PILOT) in the amount of the property tax paid as of the date of sale, frozen, until July 18, 2033.

Title
SUBSTITUTE - Authorizing...

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