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Tax Increment Financing <br />I have had no further conversation with either party, pending direction from you. <br />There does appear that a sizable gap does remain in the thinking of Mr. Wright and <br />Mr. Frattalone. <br />Tax Increment Financing is an alternative you might consider. This would cer- <br />tainly be a small TIF project by most standards, but if you feel strongly that <br />a realignment of the street is necessary and in the public's interest, this is <br />exactly what TIF is for. <br />TIF does increase the cost of resolution of the problem. Mr. Wright would be <br />eligible for relocation benefits. They are in two areas. First, the cost of his <br />move would be covered. Second, he would be eligible for a Replacement Housing <br />Payment. This is a maximum $15,000 payment meant to fill the gap between the <br />acquisition price and cost of replacing his home with a comparable home. <br />There is also the option that Mr. Wright waive all or some of the relocation <br />benefits. He must be informed of what he is waiving. The City also could not <br />use condemnation to acquire the property. This would be a way of not letting the <br />amount of funds to Mr. Wright exceed the $70,000 he has already agreed to. <br />Preliminary Budget <br />Acquisition & Relocation <br />TIF Plan Preparation <br />Local Attorney <br />Gross Project Cost <br />Minus Land Sale <br />Shortfall <br />$70,000 <br />4,000 <br />1,000 <br />75,000 <br />46,000 <br />29,000 <br />The $29,000 would be the amount financed by TIF. The amount is too small to <br />realistically sell bonds for. The general fund could advance or loan the funds to the <br />project. <br />The time involved in the construction of homes and delay between the time a home <br />is determined to be complete and the actual payment of taxes would delay the first <br />repayment unit July 1989, at the very earliest. That assumes homes would be <br />completed yet this year. <br />I assume that if the City were to advance the money from the general fund, you <br />would desire those funds to earn a comparable amount to what it currently earns. <br />Assumptions <br />1. The City funds would earn 7 %. <br />2. Five homes would be built in 1987 <br />3. Ten homes per year thereafter <br />4. Tax per home would be $1500 <br />Page 2 <br />