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<br /> <br /> <br /> <br />CITY COUNCIL COMMUNICATION <br />SUBJECT: TERM SHEET FOR HIGHWAY 42 CORE PROJECT AREA IMPROVEMENTS <br /> <br />DATE: APRIL 23, 2013 PAGE 3 OF 6 <br /> <br />Dated Date <br />The closing date for the bonds will be 30 days after execution of a subdivision plat and <br />final PUD approvals. <br /> <br />Issuing the bonds at this time provides for the greatest surety to potential investors and <br />to the LRC that the infrastructure being paid by the bonds has a redevelopment project <br />tied to its completion. <br /> <br />Par Amount <br />The amount of the bonds is not to exceed $3,500,000. The actual amount of the bonds <br />issued will be determined by a third-party financial consultant. The consultant will <br />identify the revenue stream anticipated by the redevelopment within the Highway 42 <br />Core Project Area. <br /> <br />LRC and staff conducted an analysis to determine a preliminary amount of bonds which <br />can be serviced by anticipated improvements within the Highway 42 Core Project Area. <br />The following assumptions were made in the analysis; <br />1. The DELO project would consist of; <br />a. Two apartment buildings with 130 apartments and 12,000 SF of <br />commercial space, <br />b. 30 cluster homes, and <br />c. 59 rowhomes. <br />2. DELO estimates total private development costs of $53,000,000. <br />3. Redevelopment of the Tebo property between South and Short would be into a <br />45,000 SF retail building valued at $75 per building SF. <br />4. Other properties would not redevelop but increase in value by 30% due to having <br />new streets serving them. <br />5. Interest rate of seven percent on the revenue stream. <br />6. Payment of other financial obligations of the LRC. <br /> <br />The increased property tax revenue generated from these projects is conservatively <br />estimated to support a $3,100,000 bond issuance. A copy of the analysis is attached. <br /> <br />Purpose <br />The bonds will pay for public improvements within the Highway 42 Core Project as <br />generally identified above. The actual public infrastructure needed in the area will be <br />determined during the planning application process for DELO’s private development. <br /> <br />Final Maturity <br />The term of the bonds will end December 1, 2033, giving an 18-year term period. This <br />date is the end of the TIF collection period for the Urban Renewal Area. <br /> <br /> <br />17