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File #: 64443    Version: 1 Name: 12258 - TID 46 University Park Acquisitions TIF Loan
Type: Resolution Status: Passed
File created: 3/1/2021 In control: Economic Development Division
On agenda: 3/16/2021 Final action: 3/16/2021
Enactment date: 3/22/2021 Enactment #: RES-21-00208
Title: Authorizing the Mayor and City Clerk to execute a development agreement to fund a total of $2,556,000 in Tax Incremental Finance Loans to University Park Acquisitions LLC or its assigns, consisting of an approximately 82-unit senior affordable housing project, approximately 68 units of affordable housing and approximately 156 units of market rate housing located at Lots 2, 4 and 6 of the attached draft of the Westgate Redevelopment Plat, commonly known as the former Westgate property on Whitney Way in the City of Madison and adjacent to the TID #46 (Research Park) boundary.
Sponsors: Sheri Carter, Zachary Henak, Satya V. Rhodes-Conway
Attachments: 1. Westgate TIF Report 3-2-21.pdf
Fiscal Note
The proposed resolution authorizes a $2,556,000 loan to University Park Acquisitions LLC or its assigns ("Developer") for the redevelopment at adjacent to the TID #46 (Research Park) boundary. Funding for this project is included in the TID 46 Research Park capital program in the Economic Development Division’s 2021 Adopted Capital Budget. TIF funding is contingent upon amending the TID #46 Project Plan and Boundary in 2021.

The Project consists of approximately 82 senior affordable apartment units, 68 affordable and 156 market rate) ("Project"). The TIF Loan would be repaid through incremental taxes generated by the Project and represents approximately 69% of the present value of all incremental taxes anticipated from the Project over the 15 years of life remaining in TID #46.

When either Project achieves stabilization, defined as 90 days at 90% physical occupancy of the applicable Project, Developer shall provide the City with a cost certification of the total Project Cost and Financing (“Audit”). In the event that the financing gap for Project A and/or B is less than the TIF Loan, then the City shall receive 50% of the amount of the reduced gap as a clawback.

The $2,556,000 TIF Loan will be funding GO Borrowing in TID 46, which is authorized in the $7 million budgeted for developer loans in the 2021 Adopted Capital Budget. While it is anticipated that the incremental taxes generated by the Project will be sufficient to repay the loan within approximately 9 years, the Developer is required to guaranty a minimum payment if sufficient future tax increment is not available.

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 ...

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