R2005-151 AUTHORIZING REDEVELOPMENT AGREEMENT Olde Towne TIF

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ECONOMIC AND URBAN DEVELOPMENT MEMORANDUM No. OS-210 October 11,2005 TO: Mayor Paul Osborne and City Council Members FROM: Steve G ity Manager , Dane C. Br , ssistant City Manager�' ! SUBJECT: Redevelopment Agreements, 101 East Prairie Avenue, Conklin Building SUMMARY RECOMMENDATION: Staff recommends approval of the attached redevelopment agreement and fa�ade rehabilitation agreement to rehabilitate the Conklin building located at 101 East Prairie Avenue. BACKGROUND: The subject property was vacated by Merchant Street Antiques in July, 2005. Olde Towne Development, LLC has since purchased the building and intends to convert the upper stories into four market-rate condominiums. The first-floor will be rehabilitated for retail / commercial uses. The developer estimates the project cost will exceed$1,400,000. The proposed redevelopment agreement would provide TIF and CDBG incentives to the developer. Specifically, the redevelopment agreement would reimburse the developer 60 percent of incremental property tax generated annually for years 1-5 and 50 percent of the incremental tax growth for years 6-15 of the agreement up to a m�imum of$175,000. The reimbursement period is limited to 15 years and the developer reimbursement can only be received if the tax is generated as a result of increased Equalized Assessed Valuation related to completing the projec� Only if the TIF Fund receives incremental revenue would the developer share in the increased tax generation. In addition, the City is providing up to $120,000 in CDBG fa�ade rehabilitation funds for the restoration of the exterior fa�ade of the building. These funds are allocated in the FY OS-06 Annual Action Plan for downtown fa�ade improvements. The funds are drawn by the developer as the work is completed. The developer must provide a 100 percent match for the work, meaning that the developer will also provide $120,000 in private fa�ade investment. The fmal consideration for the project requires the City to provide up to four Class "B" downtown parking permits for the residential units for a period of one year after occupancy.