TID#4 GRANT

The purpose of this memo is to start the process of paying the grant approved by a development agreement between the City and JJB Development for a portion of the Community Gate Redevelopment project. JJB Development requested TID assistance per the Ehlers and Associates report and pursuant to the City’s Redevelopment program.
The Developer has submitted a letter requesting reimbursement per Resolution 7-30 for TID eligible costs. The City used specialized consultants to assist in the analysis and development of the TIF subsidy. The City Council designated Ehlers and Associates as TIF financial consultants and Quarles and Brady to draft the developer’s agreement. The development agreement outlined the amount of private investment, public improvements required, repayment terms and any special provisions required. Ehlers and Associates along with Quarles and Brady and staff negotiated the development agreement.
The TID Project Plan policies indicated no more than 50% of the net present value of the tax increment generated by a private development project shall be made available to that project as financing. Each project demonstrating a need for TIF assistance must generate sufficient tax increment to cover or repay both the TIF contribution to the project and a portion of the planned public infrastructure costs within the tax incremental district.
The JJB Development projected $5,203,559 of new construction. This should generate about $1,300,000 of increment and 50% of this is $650,000. The developer originally requested $765,000. The Council opted to provide an incentive of $640,000.
The following is a list of TID projects that the City either directly or through the Community Development Authority expected to implement in conjunction with this District. Any costs directly or indirectly related to the TID Plan are considered "project costs" and eligible to be paid with tax increment revenues of the tax incremental district.
· WATER SYSTEM IMPROVEMENTS. There are no public water facilities available at the intersection. It will be necessary to provide water mains to distribute the water to individual properties. The City could participate in this main extension.
· SANITARY SEWER SYSTEM IMPROVEMENTS. There are environmental problems known to exist within the proposed development. It may be necessary to provide special environmental safe sanitary sewer laterals to the individual properties. The City could participate in this sanitary sewer laterals extension.
· ACQUISITION/DEMOLITION. In order to eliminate blight conditions and promote redevelopment, it may be necessary for the City to acquire and demolish blighted properties or to acquire and consolidate parcels in order to create parcels of a marketable size within the District.
· STORM SEWER SYSTEM. Development of the area will cause storm water run off. To avoid problems in the District and adjacent areas, a storm water collection, detention, and retention system will be installed. The City could participate in the stormwater system requirements.
· UNDERGROUND UTILITY WIRES. In order to enhance the appearance of the District and to attract desired development, it is necessary to convert overhead utility wires to underground services, including costs to bring such services to code.
· LANDSCAPING. The City will provide landscaping such as berms, street trees, lighting and other facilities to attract high quality development to the area.
· DEVELOPMENT INCENTIVES. The City may enter into agreements with property owners or developers for the purpose of sharing costs to encourage the desired kind of improvements and assure tax base is generated sufficient to recover project costs.
· ADMINISTRATIVE COSTS. These include but are not limited to a portion of the salaries of the City Clerk, City Attorney, public works employees and others involved with the projects throughout the project plan implementation. Audit expenses and any expenses associated with dissolving the District are also considered eligible costs.
· ORGANIZATIONAL COSTS. These costs include but are not limited to fees of the financial consultant, engineers, surveyors, map makers and other contracted services.
· RELOCATION COSTS. In the event any property is acquired for the projects, expenses including the cost of a relocation plan, director, staff, publications, appraisals, land and property acquisition costs and relocation benefits as required by Wisconsin Statutes Sections 32.19 and 32.195 are considered eligible project costs.
· ENVIRONMENTAL AUDITS AND REMEDIATION. There are no environmental problems known to exist within the proposed district. If, however, it becomes necessary to evaluate properties, the costs related to all environmental audits and remediation will be considered eligible project costs.
· FINANCE COSTS. Interest, financing fees, redemption premiums, and other financing fees are included as project costs.
With all projects the costs of engineering, design, survey, inspection, materials, construction, restoring property to its original condition, apparatus necessary for the public works, legal and other consultant fees, testing, environmental studies, permits, updating City ordinances and plans, judgments or claims for damages and other expenses are included as project costs.
Ehlers and Associates are reviewing documents submitted by JJB to determine the amount of investment made by JJB, if the costs are eligible and if the 50% reimbursement level. Staff is working with Ehlers and Associates on a recommendation regarding the funding option for the agreement.
The Council will be asked to consider and approve a reimbursement amount and the financial borrowing tool. The standard TID financing uses general obligation borrowing by the City to fund uses in a development project. The project would then be included in the City budget process under debt payments. Such borrowing may be tax-exempt or taxable, according to laws governing municipal borrowing.