Item B: URA - West Broadway Preliminary Financing Plan

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The low income housing exemption for 20 years is worth about $5.5 million. The MUPTE for 10 years is estimated to be worth about $4.7 million, depending on the assessed value for the housing in the project, the tax rates during the exemption period, and the changes in the assessed value of this property over the exemption period. Total Project Cost Without Tax With Tax ExemptionExemption Total Development Cost $186,000,000$186,000,000 Plus: City’s Other Costs 1,420,0001,420,000 Plus: Low-Income Housing Exemption 05,500,000 Plus: MUPTE Exemption 04,700,000 Total Project Cost $187,420,000$197,620,000 The exemptions are shown separately from the other types of public contribution because they are not a method of making a direct payment for a development project. Rather, a tax exemption is foregone revenue. The theory behind the tax exemption is that the development would not have occurred “but for” the granting of the exemption. If the project would not have occurred without the exemption, then the tax revenue would not have ever been received. Some people may believe the public investment should be calculated including these exemptions and some people may believe it should be calculated excluding the exemptions, so both calculations are shown here. City’s Financial Role Assumptions: The preliminary assumption for putting together this finance plan is that the City’s financial role in the project is likely to be about $24.2 million. The City’s share is assumed to consist of property acquisition and site-related costs, plus purchase of a turnkey public parking garage. In addition, the City will incur other costs from entering into the development project of about another $1.5 million. Again, this information is preliminary and has not been negotiated with the developers.The purpose of developing this information is to provide council with a very preliminary idea of what the finance plan might look like and how the City might pay for the City’s share of the public/private partnership costs. The next chart sets out the split between public and private investment in this public/ private partnership. The public investment ranges from 13.7% to 18.1%, depending on whether the tax exemptions are included or not.