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Economic Development Manager Sullivan noted that the market study supports demand for the <br />project and that the current zoning is appropriate for the development. He shared financial <br />estimates indicating that the assisted living and memory care portion would have an assessed tax <br />value of approximately $22 million. Based on the developer's project pro formas, the total <br />investment for that portion of the development could exceed $30 million. <br /> <br />Economic Development Manager Sullivan stated that the developer is requesting up to $5.54 <br />million in TIF over approximately 27 years, with a 90/10 split. He explained that the existing <br />property taxes on the site, currently about $18,000 annually, would continue to be paid and would <br />not be captured by TIF. Only the additional tax revenue generated by the new development would <br />be captured within the district. <br /> <br />Economic Development Manager Sullivan explained that the City has used different TIF splits in <br />past projects when the City had costs to recover. For example, the City used a 70/30 split for the <br />hotel project to recoup land costs and a 60/40 split for the Opus project due to anticipated <br />improvements to Bunker Lake Boulevard. In this case, because the City does not anticipate <br />significant infrastructure investments, the proposed 90/10 split was considered appropriate. <br /> <br />Economic Development Manager Sullivan noted that the developer’s projections show the <br />project’s cash-on-cash rate of return increasing from approximately 7.3 percent without TIF to <br />about 9.9 percent with TIF by year five. He explained that this increase helps make the project <br />financially viable for investors. He also noted that the developer provided these numbers and <br />would be independently reviewed by the City’s financial consultant, Ehlers, to verify their <br />accuracy and ensure the developer is not receiving excessive benefits. <br /> <br />Economic Development Manager Sullivan then discussed the independent living portion of the <br />project. He explained that the independent living building represents an estimated $19.3 million <br />investment and would not be part of the TIF district. Over approximately 27 years, it is projected <br />to generate about $6.6 million in total taxes, including approximately $2.65 million that would go <br />directly to the City. <br /> <br />Economic Development Manager Sullivan emphasized that the independent living component <br />adds value to the City’s core area because residents are expected to be active and to regularly visit <br />nearby businesses, such as restaurants, salons, and other services, in the Cor district. <br /> <br />Economic Development Manager Sullivan also noted that while job creation is not required for <br />housing TIF districts, the development is expected to create approximately 40 jobs across the three <br />facilities, including about 30 full-time positions with salaries ranging from approximately $40,000 <br />to $80,000 annually. <br /> <br />Economic Development Manager Sullivan concluded by reviewing the projected tax impacts. He <br />explained that without redevelopment, the site would generate approximately $440,000 in taxes <br />over the same period. With the project, approximately $5.54 million in tax increment would be <br />generated for the developer under the proposed 90/10 split. In comparison, the City would receive <br />approximately $615,000 for administrative costs associated with managing the TIF district. He <br />City Council Work Session / March 10, 2026 <br />Page 5 of 21 <br />