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in some cases pay as you go financing may not be financially feasible. With bonds, the City would still need to <br />make debt service payments and would have to use other sources to fill any shortfall of tax increment revenues. <br />With internal financing, the City reimburses the loan with future revenue collections and may risk not repaying <br />itself in full if tax increment revenues are not sufficient. The project financing would be pay-as-you-go for <br />reimbursement of eligible costs. <br /> <br />Tax Increment Revenue Assumptions <br />The County Assessor provided a taxable value estimate for the project. To estimate the amount of available <br />TIF revenues generated by the proposed project, certain assumptions were made based on the value of the <br />project, construction schedule, and anticipated financing terms. <br /> <br />• Total existing value of $310,300 <br />o Parcel ID: 75-002-4320 <br />o Base value as of Jan. 1, 2019 <br />o Original net tax capacity (ONTC) of $3,879 <br />o Assuming reclassification to rental rates <br /> Rental classification is 1.25% <br />• Estimated total market value upon completion <br />o 55 new units at $141,205/unit <br /> 55 rental units <br /> $7,766,300 <br />• Classification for all units as rental <br />o Rental class rate (1.25% per unit) <br />• Incremental value based on difference between existing and new land/building value <br />• Construction commences in 2020 and is completed in 2021 <br />o Project values 100% complete for assess 2022 and taxes payable 2023 <br />• First increment collected in 2023 <br />o Election to delay first increment by up to 4 years <br />• Net present value (discount) rate of 4% <br />• 0% annual market value inflation <br /> <br />Tax Increment Revenue Estimates <br /> <br /> Revenue Estimates <br /> <br />Estimated annual available increment (first year) $121,254 <br /> <br />Total gross tax increment $3,152,604 <br />City retainage (10%) $315,250 <br />Net amount available for development (90%) $2,837,354 <br /> <br />Total estimated present value (4%) $1,617,877 <br /> <br />Estimated Maximum Developer Loan $780,000 <br />Estimated Loan Payments $235,221 <br />Total Estimated Payments $1,015,221 <br /> <br />Estimated Surplus Funds $1,822,133 <br /> <br />Developer Pro forma Analysis including But-For <br />Upon approval of a TIF district and project, the City must make several findings, including the “but for” test: that <br />the proposed development would not reasonably be expected to occur solely through private investment within <br />the reasonably foreseeable future. The developer has stated that but for the provision of tax increment <br />financing, the project as proposed would not occur due to a reduction in projected revenues causing a gap in <br />supportable permanent financing sources. Because the development would be income and rent restricted <br />housing, the supportable first mortgage would be lower than that of a market rate housing project. Based on <br />the developer’s stated position relative to the need for tax increment financing assistance, the City could make