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ATTACHMENT B Hypothetical Financial Model: Move forward with Beam Development Considerations ? The financial model presented below is only intended to outline a potential financing approach and does not represent the final numbers or final financing structure. ? The URA has limited financial capacity. Given Beam’s potential office use, and no th current redevelopment proposal for the 10 and Charnelton site, retaining some meaningful level of financial capacity for future housing development and redevelopment th of the 10 and Charnelton site may be desirable. ? Spending all of the available urban renewal funds to purchase property would leave no urban renewal funds to assist in the redevelopment of the properties, including actual project costs, relocation assistance, RFP work, public process, and project management. ? Spending all of the available urban renewal funds to purchase property would leave no funds for other projects in the Downtown District. ? Buying property without a known developer/development agreement is speculative. City-owned properties have historically taken long periods of time to develop and/or resell. ? To loan the HUD Section 108 funds to Beam (see assumptions below), the City would be required to submit a new project specific application to HUD. HUD will determine whether the proposed repayment source and back-up security is sufficient to approve the loan to the City. ? In the event that a use, other than property acquisition, is proposed for HUD Section 108 funds, the City would need to complete another individual project application. The process includes a written public comment period, a public hearing, Council approval, and HUD approval. ? Under the financial model scenario listed below, not all of the purchase options would be executed. Approximately $242,000 in option money has been spent on properties not included in the Beam footprint. Assumptions (for example purposes only) ? URA purchases the Centre Court building and adjacent hole for $2.8 million and resells it to Beam for $2 million. ? URA assigns the purchase option on the Washburne building to Beam at face value ($1.9 million). Beam purchases the building. ? City loans HUD Section 108 proceeds to Beam ($7.8 million) to provide subordinate, permanent financing for the purchase of the property and completion of the project. ? Based on developer comments made at the 11/27/07 workshop regarding a potential office use for Centre Court building, adjacent hole, and Washburne building, and comments regarding difficulty attracting financing in the current market, the model suggests that the HUD Section 108 loan be used to provide financing for Beam’s project. The proposed office use is eligible for HUD Section 108 funds.