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Development Financing Plan
<br />FY08FY10 Total
<br />SOURCES OF FUNDS
<br />HUD Section 108 Loan* $7,895,000$0 $7,895,000
<br />BEDI Grant* 2,000,0000 2,000,000
<br />Urban Renewal Revenue Bonds 0$6,600,000 6,600,000
<br />Urban Renewal Cash 360,0005,220,000 5,580,000
<br />DRLP Funds 270,0001,225,000 1,495,000
<br />HOME Funds 800,0000 800,000
<br />City General Funds/Loan Guarantee 01,250,000 1,250,000
<br /> Total Sources $11,325,000$14,295,000 $25,620,000
<br />USES OF FUNDS
<br />Land Assembly, Utilities, Off-Site, Etc. $9,400,000$0 $9,400,000
<br />Public Parking (turnkey purchase) 0$13,500,000 13,500,000
<br />Affordable Housing Loan 1,300,0000 1,300,000
<br />Other City Costs 625,000795,000 1,420,000
<br /> Total Expenditures $11,325,000$14,295,000 $25,620,000
<br />Plus: Debt Service Reserve from UR Cash $800,000$660,000 $1,700,000
<br /> Total Uses $12,115,000$14,955,000 $27,070,000
<br />*HUD Section 108 loan would be repaid from urban renewal resources. The BEDI Grant must be used in
<br />connection with a HUD Section 108 loan.
<br />Funding Sources
<br />In order to pay for the City’s share of this public/private partnership, several different funding
<br />sources will need to be used. This section of the report sets out information about each of the
<br />potential funding sources.
<br />HUD Section 108 Loan & Urban Renewal Revenue Bonds: The preliminary finance
<br />plan relies on two different borrowings, a HUD Section 108 loan and an urban renewal revenue
<br />bond financing. In this scenario, the borrowings are paid entirely from urban renewal revenues
<br />existing at the time of the borrowing, and do not rely on future incremental property taxes. In
<br />this way, the risk to the City/URA and the lenders is mitigated because the revenues are existing
<br />and known amounts when the borrowing occurs.
<br />As tax increment revenues are less predictable than the City’s general property tax revenues,
<br />urban renewal borrowings are considered more risky than general City borrowings. Because of
<br />this, lenders typically require a “debt coverage” ratio of about 1.5 times and a debt service
<br />reserve to protect against fluctuations in tax increment revenues. A debt service reserve fund is
<br />generally required in an amount that is equal to either the maximum annual debt service amount
<br />or 10% of the borrowing amount.
<br />In the worst possible case where this development did not perform as expected over the
<br />financing period, the City and the lenders would not be relying on revenue from the development
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