Item B: URA - West Broadway Preliminary Financing Plan

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Attachment B Preliminary Finance Plan for the West Broadway Development Project To demonstrate how a development financing plan might work for the hybrid approach to the West Broadway project approved by council on May 14, staff has created a preliminary finance plan. The purpose of this preliminary plan is to show council how the City might accommodate a request for public funding in the hybrid approach to redevelopment of West Broadway. The actual development finance plan for the West Broadway project will depend on a number of items that are not yet known, such as the nature of the footprint and project characteristics, the expected values of each part of the development, the timing of the development, and so on. The developers and the City will negotiate these items as part of the development agreement. Once the terms are finalized, a development finance plan can be created that matches appropriate financing and development tools with the development agreement terms. Project Characteristic Assumptions: It is assumed that the combined development project consists of about $186 million of total investment, including retail, housing, office, cinema, private parking and public parking. It is assumed that the condo portion of the redevelopment is eligible for the Multi-Unit Property Tax Exemption for ten years and the subsidized rental housing is eligible for the low income housing exemption for 20 years. The project is completed in two phases, with Phase 1 (renovation of the Centre Court and Washburne building) taking one year and Phase 2 (redevelopment of the rest of the area) taking about two years. Incremental property taxes from the development begin to be received in FY10. Urban Renewal Assumptions: The example assumes that the Downtown District is amended to increase the “maximum indebtedness” by $95 million to $128 million to accommodate this and future projects. The termination date of the district is also extended from June 2024 to June 2030. Property Tax Assumptions: The initial incremental assessed value for this project is about $22 million, after taking into account property values already in existence on the development site, the housing exemptions, the utilities and off-site costs, and the public parking,. The new value generates about $330,000 of annual property taxes initially to the district, an additional $600,000 annually when the MUPTE on the condo portion of the project expires in FY21. These projections use conservative assumptions about property value growth over the period. The model assumes that all property in the district, including this new development, experiences assessed value increases of 2% per year. No additional development activity is assumed to occur in the district during the remaining life of the district. A potential upside to this scenario is that this development spurs additional investment in the downtown core, and as a result, additional property taxes are generated for future projects. Project Cost Assumptions: The total cost of the project is set out in the following chart. The chart shows the split both with and without taking into account the property tax exemptions.