Item B: West Broadway Financing Plan

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currently inhibits the City’s ability to purchase the Centre Court and Washburn properties solely with HUD Section 108 and BEDI funds. The City is in the process of exploring with HUD and the property owners scenarios that would allow for the use of a greater amount of Section 108 and BEDI funds for the purchases. The BEDI grant money must be used in conjunction with a HUD Section 108 loan. The City may access $1 of BEDI grant funds for every $3.95 drawn down in HUD 108 loan proceeds. Other Requirements The Urban Renewal Plan for the Downtown District requires that any project over $250,000 receive approval from the URA Board. The URA Board gave approval for acquisition of the Diamond property on December 10, 2007. The URA Board will give approval for the Beam project when the development agreement parameters are presented in April. In addition to these approvals, the URA Board will need to approve the budget for these acquisitions on March 10. URA Financial Capacity for Other Projects At the council meeting on December 10, staff presented rough estimates of the potential financial capacity remaining for downtown development projects. The funding sources available for the projects were urban renewal tax increment funds, the HUD Section 108 Loan, the BEDI grant and the Urban Renewal Downtown Loan Program. The remaining amount of urban renewal tax increment funds was based on an estimate of the remaining amount available under the “maximum indebtedness” cap (the spending limit). The Section HUD 108 Loan is only an additional amount of funding to the extent that urban renewal tax increment funds are NOT used as a source of security or repayment for the loan. If urban renewal tax increment funds are used in connection with the HUD Section 108 loan, then that amount would be subtracted from the total available for downtown projects. Since the December update, one additional potential source of funding has been identified. If the sale of purchase options on the West Broadway properties net any proceeds, then those proceeds would be available for additional financial participation in any downtown redevelopment projects. The proposed property acquisitions (Centre Court and hole, Washburne and Diamond) would have the following effect on the amount available for downtown redevelopment: Downtown Redevelopment Financial Capacity Approximate Property Amount Funding Source Amount Available Acquisitions Remaining Urban Renewal Tax Increment Funds $4,000,000 $(2,295,000) $1,705,000 HUD 108 Loan 7,895,000 (2,731,000) 5,164,000 BEDI Grant 2,000,000 (691,000) 1,309,000 Urban Renewal Loan Program 2,000,000 ?2,000,000 Proceeds from Sale of Purchase Options 230,000 ?230,000 Total Sources $16,125,0000 $(5,717,000) $10,408,000 F:\CMO\2008 Council Agendas\M080227\S080227B.doc