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From: Chris Sent: Tuesday, Juiy 27,20043:50 PM To: *RV Council Cc: Beets, Neal; Welsch, Dennis; Bennett, Cathy Subject: Response to Citizen Inquiries on Twin Lakes Financing Dear Council, Over the last few months, a number of citizens have made inquiries or comments on the Twin Lakes Financial Proforma prepared by Jim Casserly of the firm of Krass Monroe. In the past few weeks a recurring question has arisen with respect to the amount of tax increment that can be generated with the various types of land uses; specifically does housing generate more than retail? Given this heightened interest, I have prepared the following information to supplement what has already been shared on the subject matter. Given the complexity of this matter, I will keep my comments brief in favor of a larger discussion scheduled to take place at the next Council meeting. As to the question as to which land use generates more tax increment, the truthful answer is . it depends. I'll use an extreme example to frame up the issue. Within Twin Lakes, it is conceivable that a housing-only solution would indeed generate greater tax increment revenues than a combination housing/retail mix. However, this assumes that the housing: a) Is of a certain value b) Is built at a certain density c) Is marketable and can be either sold to a buyer or rented to a tenant Bear in mind that Mr. Casserly's housing-related TIF calculations are based on housing of a certain value and density that is adjacent to Langton Lake. Housing immediately adjacent to the intersection of Cleveland and County C, as well as other areas, may have a different value and density and therefore might generate less TIF per acre than is reflected in the current Proforma. In addition, looking at TIF from only the revenue side does not address the potential higher costs of housing redevelopment such as the higher standard of environmental cleanup required to construct housing as compared to office or retail. In summary, while a housing-only solution might generate more tax increment as a general matter, it would be premature to conclude that it will generate more i:lYClilable tax increment for this particular project. It would also be premature to conclude that the marketplace is willing to build, and the Council is willing to accept a housing-only development for this area. These issues need to be addressed before concluding that a housing-only solution is preferable to some other mix. Finally, the Council should be cautious in making planning decisions based upon the desire to maximize TIF. While it may address some financial concerns related to the project, it could have unintended effects elsewhere. In all likelihood, the redevelopment of Twin Lakes will involve some gray areas with inexact solutions. The Council is advised to consider both sides ofthe issue(s) before making any final decisions. The information presented above will be revisited at the August 9, 2004 Council Meeting. If you have any immediate questions or concerns, please feel free to call me at the number below, or Dennis Welsch at 651-792-7071. I will be out of the office on vacation the week of August 2nd, but I will be checking 8/4/2004