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rSUBJECT: FOUNDRY BUILDERS APPLICATION FOR ASSISTANCE
<br />DATE: JUNE 12, 2017
<br />PAGE3OF3
<br />Assumptions
<br />Housing Units
<br />Average unit value
<br />Assessment Rate
<br />Interest Rate
<br />Mill Levy
<br />Year
<br />41
<br />$400,000
<br />7.20%
<br />7%
<br />87.98
<br />Units Constructed Units Taxed Principal Interest Payment Principal Remain
<br />2017 0
<br />2018 0 1,000,000 70,000 - 1,070,000
<br />2019 20 0 1,070,000 74,900 - 1,144,900
<br />2020 41 20 1,144,900 80,143 50,676 1,174,367
<br />2021 41 41 1,174,367 82,206 103,887 1,152,685
<br />2022 41 41 1,152,685 80,688 103,887 1,129,487
<br />2023 41 41 1,129,487 79,064 103,887 1,104,664
<br />2024 41 41 1,104,664 77,326 103,887 1,078,104
<br />2025 41 41 1,078,104 75,467 103,887 1,049,684
<br />2026 41 41 1,049,684 73,478 103,887 1,019,275
<br />2027 41 41 1,019,275 71,349 103,887 986,738
<br />2028 41 41 986,738 69,072 103,887 951,922
<br />2029 41 41 951,922 66,635 103,887 914,670
<br />2030 41 41 914,670 64,027 103,887 874,810
<br />2031 41 41 874,810 61,237 103,887 832,160
<br />2032 41 41 832,160 58,251 103,887 786,525
<br />The project, if the average value for the apartments and townhomes is $400,000 does
<br />not generate sufficient revenue to pay off the $1,000,000 at a 7% interest rate.
<br />Increasing the amount of bonds eligible for sale by $1,000,000 has trade-offs related to
<br />having funding for future projects. The trade-offs are:
<br />1. Increasing the bond amount creates greater risk of the principal not being paid off
<br />within the timeframe of the bonds.
<br />2. The current bond rate of 7% may not reflect the risk level related to the current
<br />status of projects within the Core Area. Several projects are under construction,
<br />creating a more reliant revenue source for bond repayments.
<br />3. Allocating more LRC resources towards the DELO projects limits catalytic
<br />investments in other areas of the Highway 42 Urban Renewal Area.
<br />Conclusion
<br />Staff would like LRC input into the project whether to continue pursuing the $1,000,000
<br />request from Foundry Builders.
<br />ATTACHMENTS:
<br />1. LRC Application for Assistance
<br />2. DELO Lofts Site Plan
<br />COUNCIL COMMUNICATION
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