Agenda - Economic Development Authority - 01/12/2017

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(2) Staff Feedback • The only major conflict with this site location is the funding gap. The gap here(between what PSD wants, and what the Stone Brook wants) is about$9 psf or$392K. • Staff did a TIF run on this project(for The COR TIF district). Over about 20 years, it would pull about $510,000 in Future Value(FV)TIF or about$315K in Present Value(PV)TIF—@4.00%discount rate.The City could use TIF to fill this gap. However,staff would note,this will pull the City's property tax generation on this project for 20 years(and there are many projects within The COR that could use TIF funding). • This route would also require a business subsidy process/application. Likely,if possible,all parties involved would want to avoid said alternative. • Lastly,this proposed TIF assistance($315,000 PV/$500,000 FV)on a roughly$2.5M project is significant, and may be cause for caution. For example,the roughly$20M PSD apartment project was subsidized $500,000 FV;the roughly$10M Platinum Properties project was subsidized $455,000 FV;the$7M Life Fitness project was subsidized at about$350,000 FV. This subsidy would likely stretch or exceed our policy guidelines for subsidies(based on preliminary staff review). • With the above in mind,this site does present the least amount of"development/land use/ infrastructure"concerns of all viable sites. This site is perfectly sized/shaped,and in an ideal location for Stone Brook. If the City desires,staff may be able to find a creative solution to secure dollars to fill the funding gap on this project(via City subsidy). This alternative will likely delay the development process for Stone Brook by at least 60 days—which they are generally concerned with (as they still need to go through the entitlement/state licensing processes). This alternative does carry the risk of uncertainty (PSD's official position, business subsidy process,public perception,etc.). Page 4 of 6