Item B: East Broadway Development Update

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Urban Renewal Revenue Bonds: The Agency will issue revenue bonds backed by the future tax increment revenues in the Riverfront District. Existing tax increment revenues are about $0.5 million per year. The Whole Foods development is estimated to add $0.15 million per year in new tax increment. It is estimated that the debt service payments on the bonds will essentially use up all of the available tax increment revenues, after paying for district admin- istration costs. The bonds will most likely be 15 year bonds, but could go as long as the ending date of the district in 2024. The lender will probably require that the agency maintain a debt service reserve fund during the term of the bonds. Urban Renewal Cash Contribution: The Riverfront Urban Renewal District has several places where a cash contribution could be generated for the garage project. In the FY06 budget, $400,000 was allocated for purchase of the riparian area in connection of a sale of the EWEB property for a hospital. Because McKenzie-Willamette has chosen an alternate site, the funds allocated to purchase of the riparian area on the EWEB site could be reprogrammed as part of the purchase of the parking spaces. In addition, there is estimated to be about $400,000 in unallocated funds in the FY06 budget, and an additional $350,000 is estimated to be available in FY07. The total estimated cash contribution from the Riverfront Urban Renewal District is $1,110,000. Stormwater Funds: The City would use approximately $250,000 in available balances in the Stormwater Fund to pay for a relining of the storm water line that runs through the project boundaries. Library Debt Service Fund – Debt Service Reserve: There is currently about $475,000 in a debt service reserve in the Library Debt Service sub-fund. This is in addition to $2.5 million that is held in reserve in the Downtown Urban Renewal District’s funds. Payments on the library obligations total about $2.5 million per year, and the payments will end with the final payment on 12/1/2009. Because the final payment date is drawing near, and because there is a one-year reserve in the Urban Renewal Agency funds for this purpose, it would be reasonable for the City to use these funds to provide for debt issuance costs and a debt service reserve for a different financing. Facility Reserve Fund: The City has been setting aside funds for renovation or re- placement of City Hall for several years. As a result, the current balance in the Facility Reserve is a little over $24 million. The City could use some of these funds to pay for a portion of the garage project. The Urban Renewal Agency would commit to reimbursing the City for this pay- ment over time, as funds are available in the district. Optional Financing Strategy The City received confirmation from the U.S. Department of Housing and Urban Development (HUD) in late January that it had been awarded a $2 million Brownfield Economic Development Initiatives (BEDI) grant. This grant must be used in connection with a HUD “Section 108 Loan”, which is a federal loan program backed by Community Development Block Grant (CDBG) funds. Staff is in the process of determining the costs and requirements associated with the Section 108 Loan program. L:\CMO\2006 Council Agendas\M060208\S060208B.doc