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<br />Upgrade and/or Relocation of Utilities: The alleys on the development site contain a <br />storm water line and a steam line. These utilities will need to be either upgraded or relocated in <br />order to complete the development project. The costs for the utilities will be shared between the <br />City and the developer. The amount shown in the chart represents the City's share of the costs. <br />It is assumed that the City will pay for costs of rehabilitating the storm line, the developer will <br />pay for alley assessments (not included in the City's financing strategy), and the City and <br />developer will share equally the cost of relocating the steam line. <br /> <br />Debt Issuance Costs: There are costs to the Urban Renewal Agency for entering into <br />debt, which could include items such as preparation of offering documents, rating agency fees, <br />bond counsel fees, financial advisor fees, and loan fees. <br /> <br />Miscellaneous/Contingency: This is a small amount (less than 1 % of the City's total <br />costs) to allow for potential changes in the project or for City costs that have not yet been <br />identified. The developer included a separate contingency in the overall project budget. <br /> <br />Debt Service Reserve Fund: The Urban Renewal Agency's lender will probably require <br />funds to be held in reserve to protect bondholders during the time the debt is outstanding. That <br />amount is normally equal to 10% of the amount of the borrowing, or one year of debt service. <br /> <br />Funding Sources <br />To the extent possible, staff recommends that the Riverfront Urban Renewal Agency should pay <br />for as much of the garage as it can afford. That includes both a cash contribution of available <br />funds at the time of purchase and issuance of urban renewal revenue bonds. The proposed <br />financing strategy for Option 4 is set out in the chart below. <br /> <br />Option 4 <br />260 spaces with retail <br /> <br />Urban Renewal Contribution <br />-Urban Renewal Revenue Bonds <br />-Reprogram of Funds to Purchase Riparian Area <br />-Cash Available in FY06 & FY07 <br />Total Urban Renewal Contribution <br /> <br />$4,000,000 <br />400,000 <br />1.110,000 <br />5,510,000 <br /> <br />City Contribution <br />-Stormwater Funds (for upgrading storm line) <br />-Library Debt Service Fund - Debt Service Reserve <br />-Facility Reserve <br />Total City Contribution <br />Totals <br /> <br />250,000 <br />475,000 <br />1.800,000 <br />2,525,000 <br />$8,035,000 <br /> <br />Descriptions of the specific funding sources suggested for inclusion in the financing plan are <br />described below. <br /> <br />Urban Renewal Revenue Bonds: The Agency will issue revenue bonds backed by the <br />future tax increment revenues in the Riverfront District. Existing tax increment revenues are <br />about $0.5 million per year. The Whole Foods development is estimated to add $0.15 million <br />per year in new tax increment. District administration costs are about $0.23 million, leaving a <br />net of $0.42 million available to make debt service payments. It is estimated that debt service <br />payments on the bonds will equal $0.42 million, using up all of the available tax increment <br /> <br />LICMOl2006 Council AgendasIM060222IS060222A.doc <br />