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therefore,the amount of bonding that the redevelopment project can support. • 9. The EDC's collective belief is that the market value of the completed Mermaid project will generate"captured"property tax receipts of at least$271,819.00 per year,which will be sufficient to cover the required payments on a bond issuance that will provide the Developer with$2.25 million in project cost reimbursement(s)-- thereby eliminating the need to use any funds from the "pooled TIF account." In short,the EDC believes that the redevelopment of the Mermaid can be a"self-supporting"pay-as-you-go TIF project, in the sense that no funds other than the increased property taxes on the redeveloped property would be needed to pay off the bonds that would be used to provide the Developer with the financial assistance that has been requested. 10. The EDC therefore recommends that the EDA set a"ceiling"of$2.25 million on the amount of project cost reimbursement to which the Developer may be entitled,with the understanding that the actual amount of such reimbursement shall be ultimately dependent upon further analysis regarding the Developer's financial need. The EDC anticipates that such analysis shall be conducted(at the EDA's discretion)by city staff and/or by consultants retained by the city and/or by whatever lender may be providing the Developer's permanent financing. For example,in the event that the Developer is able to establish,to the EDA's satisfaction,that the Developer would not undertake the redevelopment project in the reasonably foreseeable future without the use of pay-as-you-go tax increment financing in the"net"amount of$2.25 million,the EDA would then agree to provide the Developer with project cost reimbursement(s)in that total amount. 11. One of the EDC members indicated a preference for conservatively assuming that the market value of the completed project would not exceed$5.9 million. That member was willing to 411 commit up to$50,500.00 a year from the pooled TIF account if doing so would enable the city to provide the Developer with the$2.25 million in project cost reimbursment that the Developer had requested. At least a few of the other EDC members were willing to commit some(unspecified) portion of the pooled TIF account funds to the project on an annual basis,but only if it became apparent that the market value of the redeveloped property would be lower than the figure that would be needed to generate property taxes sufficient to handle the annual payments on a bond issuance that would provide the Developer with$2.25 million in project cost reimbursement. The EDC members in question considered that possibility to be extremely remote. 12. The initial discussions/negotiations regarding the Mermaid project included the City's [potential] acquisition of the Rent All site at a cost not to exceed$550,000.00, said amount to be paid from the pooled TIF account. If the"net"amount of the bond proceeds is increased from the original $1.7 million_to a new figure of$2.25 million,_the$550,a00.0_0 difference would be paid to the Developer in the same fashion as the original$1.7 million--as project cost reimbursement. In order to get reimbursed for the cost of the Rent All site,the Developer would have to pay that cost. Accordingly,the EDC recommends that responsibility for the acquisition of the Rent All site be assumed by the Developer. ACTION TO BE CONSIDERED Fo P •• cussion only. 01 ection will be sought regarding whether a"final"version of the Development ement should •e phlced on • a ends for the 2-8-99 City Council meeting. d° e Carroll(61 --71 -4029) • conomic Development Coordinator N:\DATA\GROUPS\ECONDEV\COUNCIL\01-01-99.RE V