pf_01676 - Laserfiche WebLink

Home

Analysis of Costco Proposal June 16, 1986 t Page 5 taxes. This would leave approximately $142,000 in potential tax increment revenue that could be applied towards the project. This project has some obvious uses for tax increment financing, such as land acquisition and site clearance. PFS has not undertaken an analysis of the financial feasibility of tax increment financing nor an evaluation of the need for tax increment financing or any other type of public support. In eval- uating the need for tax increment financing, the City should take into consideration the following: • Need: Hoke much, if any, public support is needed to make the project financially feasible? The developer should be required to supply the City with detailed financial projections indicating the impact of any public support on the feasibility of the project. • Tax R2-form: How does proposed federal tax reform legislation affect the project? It is likely that tax reform, if enacted, will in some manner hinder the City's use of tax exempt financing to facilitate this project. If adopted in a form similar to the House Plan (H.R. 3838), tax reform could eliminate the use of tax exempt financing for many aspects of this project (i.e. - land acquisition, demoli- tion, clearance). The joint statement issued by leaders in Congress has created a "window" in the tax reform process. The City would be able to issue bonds under 1985 rules if the bond issue can be closed by September Ist. With each passing day it will become more difficult to meet this deadline. It is possible that the final form of tax reform could contain a 1987 effective date, but this should not be relied on to any great extent. In this light, the City may wish to consider the use of taxable bonds or a pay-as-you-go approach to any City financed activities. u Fiscal Disparities: How would any use of 'tax increment financing on the project be treated from the perspective of fiscal disparities? There has been a growing concern on the part of the City on the impact of tax increment financing and fiscal disparities. If tax increment financing projects capture all of the available tax increment revenue, then the general tax base must make up the required contribution. If the tax increment district make the contribution, then only a portion of the projected tax increment revenue would be available. Summary Although final results of the land use, financial and market study of the target areas are not available at this time, enough information is available for the City to evaluate the Costco proposal. Based on the analysis of the Costco proposal conducted by the project team, the following recommendations are hereby offered: (1) From a market viewpoint, there are no apparent reasons to oppose Costco's proposal to locate on the County Road C site. The store will be a higher and better use than now existing. It could be the first facility in a new commercial concentration.