Item A: Downtown Development Financial Tools

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ATTACHMENT B Hypothetical Examples of a West Broadway Development Project To demonstrate how a development financing plan might work for the West Broadway These are hypothetical examples and are not project, staff has created two examples. based on actual figures from either of the developers. The purpose of these examples is to show council how the City might accommodate a request for public participation in the redevelopment of West Broadway. The actual development financing plan for the West Broadway project will depend on a number of items that are not yet known, such as which developer is chosen, the nature of the footprint and project characteristics, the ex- pected values of each part of the development, the timing of the development, and so on. The developer and the City will negotiate these items as part of the development agree- ment. Once the terms are finalized, a development financing plan can be created that matches appropriate financing and development tools with the development agreement these are hypothetical examples only terms. Again, . Large-Scale Development Example In the Large-Scale Development example, it is assumed that a development project con- sists of about $185 million of total investment, including retail, housing, cinema, hotel, private parking and public parking. The housing is eligible for the Multi-Unit Property Tax Exemption (MUPTE, see Attachment A) for ten years. The project takes about two years to construct, and incremental property taxes from the development are received starting in FY11. The Large-Scale Development example assumes that the Downtown District is amended to increase the “maximum indebtedness” to accommodate this and future projects, as described in Attachment A. The termination date of the district is also extended from June 2024 to June 2030. remembering again that The agreement between the City and the private developer ( this is a hypothetical example only and no agreements have been made between the City and any developer for the West Broadway Redevelopment Area ) states that the City’s financial role in the development is to assist with the land assembly and to provide public parking. The land assembly financial assistance consists of a City contribution of $10 million towards the cost of the property in FY08. The public parking will be built by the developer and purchased by the City on a turnkey basis for $12.5 million in FY10. Total investment from the City is $22.5 million, or about 12% of the total development cost. The initial incremental assessed value for this project is about $28 million, after taking into account property values already in existence on the development site, the housing exemption, and the public parking,. The new value generates about $400,000 of annual property taxes initially and an additional $800,000 when the MUPTE expires in FY21. The Large-Scale Development example generates about $18 million of property taxes to