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the District through the termination date in 2030, which is about $4 million less than the
<br />City’s investment in the project.
<br />
<br />These projections use conservative assumptions about property value growth over the
<br />period. The model assumes that all property in the district, including this new develop-
<br />ment, experiences assessed value increases of 2% per year. No additional development
<br />activity is assumed to occur in the district during the remaining life of the district. A
<br />potential upside to this scenario is that this development spurs additional investment in
<br />the downtown core, and as a result, additional property taxes are generated for future
<br />projects.
<br />
<br />The split between the public and private investment in the Large-Scale Development ex-
<br />ample is set out in the following chart. The chart shows the split both with and without
<br />taking into account the MUPTE. The MUPTE is estimated to be worth about $9.3 mil-
<br />lion, depending on the assessed value for the housing in the project, the tax rates in effect
<br />during the exemption period, and the changes in the assessed value of this property over
<br />the exemption period. The exemption is shown separately from the other types of public
<br />contribution because it is not a method of making a direct payment for a development
<br />project. Rather, a tax exemption is foregone revenue. The theory behind the tax exemp-
<br />tion is that the development would not have occurred “but for” the granting of the
<br />exemption. If the project would not have occurred without the exemption, then the tax
<br />revenue would not have ever been received. Some people may believe the public invest-
<br />ment should be calculated including this exemption and some people may believe it
<br />should be calculated excluding the exemption, so both calculations are shown here.
<br />
<br />Hypothetical Large Scale Development
<br />Public and Private Shares of Investment in the Development Project
<br /> Without Tax Exemption With Tax Exemption
<br /> Amount Percent Amount Percent
<br />PUBLIC INVESTMENT
<br /> HUD Section 108 Loan* $7,895,000 $7,895,000
<br /> BEDI Grant 2,000,000 2,000,000
<br /> UR Revenue Bonds* 5,500,000 5,500,000
<br /> UR Cash 7,055,000 7,055,000
<br /> Other Sources 0 0
<br /> MUPTE 0 9,300,000
<br /> Total Public $22,450,000 12% $31,750,000 16%
<br />
<br />PRIVATE INVESTMENT*
<br /> Total Development Cost $185,450,000 $194,750,000
<br /> Less: Public Investment -22,450,000 -31,750,000
<br /> Net Private Investment $163,000,000 88% $163,000,000 84%
<br />
<br />TOTAL INVESTMENT $185,450,000 100% $194,750,000 100%
<br />
<br />*Public and private financing contributions are shown excluding interest payments.
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