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<br />- <br /> <br />. <br /> <br />a longer time period than was originally planned due to less tax base being <br />generated from that District. <br /> <br />A proposed outline of a development agreement has been discussed and <br />negotiated over the past couple of months. The significant components of this <br />development agreement outline have not changed due to a decrease in size of <br />the District. These are as follows: <br /> <br />. <br /> <br />· Developer to receive approximately $2.9 million in assistance in the <br />following manner: <br />o $300,000 at the time of issuance of a certificate of occupancy <br />on the first 50,000 square foot multi tenant industrial <br />building <br />o $2.6 million in the form of a pay-as-you-go note holding an <br />interest rate of approximately 8% for a term which will likely <br />be identical to the life of the tax increment district. <br />. Developer will be required to meet specific goals regarding <br />construction of buildings in the industrial park (an additional <br />50,000 square foot building every other year), or a certain <br />percentage of tax increment will be withheld in that given year. <br />· Tax increment received annually by the city will first be applied to <br />the annual debt service retirement of any city general obligation <br />bonds for which tax increment has been pledged. <br /> <br />A likely scenario will be that the developer will receive little or no tax <br />increment in the first years of the project. The reason for this is that it is <br />projected to take a couple of years to build out the commercial project, <br />thereby generating enough tax increment revenue to pay the city's annual <br />debt service on its general obligation bonds and have enough left over to <br />make payments to the developer on the pay-as-you-go note. <br /> <br />The other major financial issue with regard to TIF District No. 19 is the <br />dollar amount of tax increment anticipated to be used by the city for public <br />improvement portions of the project. The amount of TIF that the city uses <br />will determine the size of the general obligation bond, thereby helping staff <br />and the developer determine both parties' risk based upon the anticipated <br />build out of the commercial project. The following costs have been discussed <br />by staff and the previous council as appropriate expenditures for tax <br />increment generated from District No. 19: <br /> <br />. <br /> <br />· Approximately $630,000 for a lift station to provide sanitary sewer <br />service to the redevelopment project and greater east Highway 10 <br />area. <br />. Approximately $1.9 million in street and storm sewer costs within <br />the redevelopment property. <br />