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Item A: Core Campus - Application for MUPTE for 505 East Broadway
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Item A: Core Campus - Application for MUPTE for 505 East Broadway
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6/17/2013 2:52:22 PM
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6/17/2013 2:34:13 PM
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Agenda Item Summary
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6/17/2013
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• Location The project is located in the Downtown Plan Area. <br />• Parking The project is not located in a RPP zone. <br />2.5.2 Longevity of Public Benefits All of the public benefits listed above will <br />extend beyond the period of the tax exemption. <br />2.5.3 Points Awarded The applicant has been awarded 290 public benefit <br />points. <br />2.6 Other Benefits Provided by the Project. Based on the comments heard at <br />council work sessions, a number of issues or possible concerns emerged. <br />Below are the relevant issues and Core Campus's responses, which provide <br />additional benefits. <br />2.6.1 Payment in Lieu of Affordable Housing Core Campus proposes to make <br />payments to the City of $1,030,000 during years six through ten. The <br />payments would be guaranteed and paid regardless of the financial <br />performance of the project. The average cash on cash return for the 10- <br />year period with the MUPTE and the additional payments from Core <br />Campus is estimated at 9.66 %. Continuation of the MUPTE would be <br />conditioned on each of the guaranteed payments in the later years <br />being paid. The project would immediately stop receiving the MUPTE if <br />Core Campus failed to make a guaranteed payment. For example, <br />should Core Campus fail to make the proposed $30k year six payment, <br />Core Campus would not receive the tax exemption that year and would <br />instead pay property taxes on the improved value to the site (estimated <br />tax of $520,600). Not paying property taxes would trigger default with <br />the lender, which is a strong guarantee in itself that Core Campus would <br />make the payments. Additionally, the guaranteed payments would <br />survive should the property change hands; the new owner would be <br />required to either make the payments in order to keep the MUPTE <br />benefit active or, alternatively, begin payment of full property taxes. <br />In years 6 -10 of the tax exempt period, in addition to any other fees, <br />taxes or charges owed to the City, the owner of the property shall make <br />the following payments to the City by July 15 of each year: <br />Year 6 = <br />$30,000 <br />Year 7 = <br />$60,000 <br />Year 8 = <br />$165,000 <br />Year 9 = <br />$300,000 <br />Year 10 <br />= $475,000 <br />Page 2 of 4 <br />Resolution EXHIBIT A- Report and Recommendation <br />
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