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4.3 The City tax abatement is proposed as follows: 1. The City would abate 12 of the additional City taxes (County and School District retain 100 % of the increase) generated by the improvement for a total of ten years (maximum allowed by state Statute). The City would collect the remaining half of the tax increase art the improvement and the full amount after 10 years. 2. The abatement would be cancelled if the home were sold anytime within the ten years. 4.4 There are several benefits provided to the homeowner and the City through a City lean and partial tax abatement amendment under the Rambler Redesign Program. 1. It is estimated (see attached table) that over a twenty-five year period, the City would recover approximately fifty-three percent of a $20,000, zero percent interest lean in new taxes (even with the rebate). In addition, at least 50 percent of the loan amount would be collected in loan repayments in years 11-20. The increase in the taxes plus the loan repayment combined, over a twenty-five year period, would result in a 103 percent return on investment to the City if the homeowner remains in the home for more than 20 years. If the home were sold before year 20, the increase in the taxes plus the full repayment of the loan combined would result in a 150 percent return over a 25-year period. 2. The City loan repayments can be filtered back into the Housing Fund to support additional home improvement loans. 3. The City would recover the entire principal amount of the loan if the homeowner sells before 20 years. 4. The improved home contributes to the City's housing goals and continues to generate increased taxes while strengthening the quality and livability of the neighborhood. 5. As homes are improved under the program, there will be an increase in housing choices for families. Providing up to date housing for families would, at a minimum, sustain and likely increase the school population, adding per pupll revenue to the schools. The Council may choose to direct staff to discuss partnerships with the School District under the partial abatement portion of the program. This would be an additional incentive to the homeowner to implement a project as the School District tax contribution is close to 50 percent. 6. All other elements of the Rambler bler Redesign Program would need to be met to qualify for the deferred loan and partial abatement. Qualified or experienced architectslhome designers must provide design advice and plans for the improvements. Improvements must include increasing the functionality of the home such as enlarged and improved kitchen, additional or enlarged bathroom, master bedroom addition, main floor family room, second garage stall, exterior entry appeal. 0 The city must be permitted to publicize the improvement with a video and open house in addition to keeping a copy of the plans and drawings for publication as part of a remodeling book. RCA-T Rambler Redesign 07127/98 - Page 3 of 4