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<br /> <br />Why TIF is Needed <br /> <br />The difference in rents charged for the affordable units versus the market rate units and effect on <br />annual revenue is as follows: <br /> <br />Units Affordable <br />Rent <br />Market <br />Rent Difference <br />Per Unit Annual <br />Revenue <br />Difference <br />Annual Revenue <br />Difference <br />Studio - Memory Care $1,000 $5,000 ($4,000)($48,000)($240,000) <br />1Bdrm - Assisted Living $1,000 $3,627 ($2,627)($31,524)($315,240) <br />($79,524)($555,240)TOTAL <br />With 20% of the unit rents at affordable levels, the project’s potential rental income decreases by <br />approximately $550,000 annually. The lower revenue reduces the project’s ability to obtain and <br />carry debt and attract private equity investors, thereby creating a funding gap. <br /> <br />Recommendation <br /> <br />It is recommended to provide Trident with a PAYGO TIF Note of $1.5 million over a 9.5-year term <br />to make the project financially feasible. It will be paid with 90% of the TIF generated and will carry <br />an interest rate of 4%. <br /> <br />The project generates approximately $236,000/year in TIF. We also recommend that the City <br />require the affordability to be retained for the term of the TIF district. This would allow the City to <br />use future TIF generated (approximately $3.9 million from years 10 – 26), if desired, for other <br />affordable housing projects within the City. If the City does not desire to keep the District open <br />the full 26 years for this purpose, we would recommend that at a minimum, the affordability period <br />be 15 years. <br /> <br />Please contact me at 651-697-8506 with questions. <br /> <br />