07-01-2019 Council Packet - Laserfiche WebLink

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The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly Virchow Krause, LLP We were able to reduce the original request of assistance from 15 years to lesser term by lowering the total reimbursable amount of eligible costs. We further reduced the term through the provision of City fee credits, as standard practice. And lastly, by including the value of the town homes (additional $6.0M) and utilizing pooled TIF dollars already on-hand resulted in a further reduced term estimated to be 8.5 years. In summary the following steps were followed to meet the Council directives: 1. Review and application of fee credits through City policy 2. Including town homes in boundaries of TIF District 3. Use of pooled TIF from existing Housing District 1-5 1. Review and application of fee credits  Using information submitted by the developer in the development application, City staff was able to determine the estimated fee credit amount that is consistent with City policy. The City will provide credit in the amount of approximately $300,000 to the developer for park dedication and trunk utility fees for work on public trail and trunk utility oversizing improvements. This number is an estimate and may change based on actual improvements and contract costs. 2) Including town homes in boundaries of TIF District  At the May 6 City Council work session, there was a request to include the town home development within the boundaries of the TIF district to increase the projected revenues and ultimately result in a reduced term of assistance. The total estimated value of the taxable portion as provided by the County for the senior care building is approximately $22.9M. The preliminary value estimates for the town homes is about $300,000/unit resulting in an additional $6.0M of value. This provides more revenues in the TIF District as it captures all incremental taxes of the taxing entities, as opposed to the City’s share only should the town homes not be included in the TIF District and go on the general tax rolls. The inclusion results in one less year of needed tax increment assistance reducing the term from an original 10.5 years to 9.5 years to meet the recommended total of $3.6M. Use of pooled TIF from existing Housing District 1-5  We did additional due diligence to understand potential alternate funding sources that may be available to reduce the term of the TIF District and determined the City has existing funds from its’ Housing TIF District No. 1-5 (Willow Ponds). The available amount is approximately $382,000. The funds from TIF 1-5 may only be used on other eligible affordable housing projects within the City. If the funds are not used, they will be redistributed to the County and the city could expect to receive only its share of the total (approximately 1/3). By using these funds for the proposed project, the amount of TIF from the new housing district is further reduced to $3.218M and the term of assistance is projected to be a maximum of 8.5 years. Tax Increment Financing Plan Included with the packet is the draft Tax Increment Financing Plan for the proposed Tax Increment Financing (Housing) District No. 1-13. Adoption of the TIF Plan for the TIF District will provide the City with the authority to use tax increment revenues for specific eligible projects related to the housing project. The main components of the TIF Plan include the following:  Public purpose o Implementation of approximately 200 senior housing units o Mix of independent and assisted living with memory care and detached town homes o All rental units  Qualification as housing TIF District o At least 20% of the units will be occupied by individuals/persons at 50% of area median income o Required for term of assistance