CCP 12-28-1994 - Laserfiche WebLink

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. . . quickly or contains higher than assumed valuations, then the taxing jurisdictions will receive more tax revenue or receive it sooner. The more successful the Project, the greater the return to the Redeveloper and to the taxing jurisdictions. . The use of tax increment simply allows the City to reduce the Site Costs of $3.75 per square foot to a reasonable level to allow the Redevelopment to proceed. It is most important to note that a redeveloper is not receiving assistance when a City is reducing the value of a site to its market value. Because of the very low cash-on-cash return and due to the high risk and large cash outlays required by the Redeveloper for the first two Phases (there are minimal, if any, revenue note payments to the Redeveloper from Phases I or II until 2010), the Redeveloper is requesting that the City allow the Redeveloper's risk to be rewarded by allowing the Redeveloper to recover as much as possible of the $4 million projected deficit for the Site Costs. . CONCLUSION With a net useable land cost per square foot of $1.60, the proposed Project is possible. At $3.75 per square foot it is not even conceivable. The level of City assistance is simply the average cost per square foot to the Redeveloper subtracted from the actual Site Costs which we are projecting at $3.75 per square foot. With the assumptions used in the December 7 Memo and this memo, if the City's assistance amounts to $5.5 million of the $9.5 million Site Costs, then the Redeveloper's deficit exceeds $4 million. Again, it is to both the Redeveloper's and the City's advantage to allow the Redeveloper to recover as much of the $4 million deficit as possible. Reducing the Site Costs from $3.75 per square foot to $ 1.60 per square foot is simply'the cost of redeveloping the site. The City is shifting its risk for financing the Site Costs to the Redeveloper through the use of a revenue note and Redeveloper guarantees required for the issuance . 7