pf_01830 - Laserfiche WebLink

Home

} M E M O R A N D U M DATE: June 8, 1988 TO: Jim Andre FROM: Craig A. Waldron SUBJECT: Baton Development Co - oration - Lexington School Site Attached is correspondence from the Baton Corporation spelling out its proposal as it would relate to the Lexington School Site. Essentially Baton is proposing that the company would provide fair market value, up front, plus the city would contribute $315,000.00, up front, as a down payment to the School District and Kaufhold for the purchase of the land. This scenario is then based on the fact that the school district would accept time payments from the city if the full price were indeed offered. I have had the opportunity to discuss this proposal with Baton in more detail, and have since learned that the company is essentially considering two proposals. one is a town house at 11 units per acre, and the other one is of more significant density which would entail 25 units per acre. I have attached an analysis of each proposal which includes the potential of CDBG. It should be noted that the town house project simply does not work on a straight tax increment basis as the payout is in the range of 19.61 years. However, if CDBG could be secured as part of the down payment to the school district, a town house development could work in that the payout is 10.90 years. The developer would have to agree to a low and moderate component with respect to the town homes. In terms of a 25 unit per acre development, the development works extremely well in that a straight tax increment payout would accomplish the project in 4.41 years, whereas the CDBG potential would facilitate a payout in 2.79 years. I also ran a townhouse development with only 1-acre of Park which worked on a 12.5 and 8.7 payout. Albeit a number of these deals appear doable from the technical context, there are substantial policy issues that the city council must consider. In order to facilitate a housing development on this site and formulate a solution that may be agreeable to all parties, the council must consider: 1. Should Kaufhold receive the payment of $292,000 above and beyond what is being paid to the school district? 2. Should the school district be paid commercial rates for a housing development project? It is my opinion that before any negotiations could proceed with the developers, these critical policy issues must be reviewed. I have developed a number of options for Council review.