1. Limitations of One University Place TIF Plan City Council Meeting July 14, 2015

2. Outline of challenges A good financial deal? Following the law? Following best practices? Transparent? Peter Fisher’s questions

3. A good financial deal? Process set up to City’s disadvantage ◦ Predefined TIF amount ◦ To get it, developer had to make sure they shot higher Loss of revenue per resident during TIF years ◦ Extra revenue does not make up for extra residents Lack of school funding is offset in part by higher property tax rates per Tax Increment Financing Impact on ICCSD document by Craig Hansel, Chief Financial Officer

4. Legal uncertainty National Development Council reported $1M of TIF goes to residential The Urban Renewal Plan draft says all $4M are for commercial retail units These numbers don’t match.

5. Following best practices? Loan guarantees (for TIF-based loan) ◦ does the developer guarantee payment of TIF loan if revenues fall short? “But-for” test Parts I and II ◦ I. the development would not happen solely through private investment in the reasonably foreseeable future ◦ II. the induced development will yield a net increase in market value for the site compared to the likely development that would occur without TIF  For OUP, if market value of no-TIF development were >=26.5M, then the project would fail the “but-for” test

6. Following best practices? Setting a maximum percentage of tax increment going to developer ◦ To ensure some revenues flow to City right away ◦ Don’t refund most of your increment; City needs dollars now Holding negotiation with developer solely through public hearings

7. Transparent? TIF amount at which to stop negotiating was not disclosed to the entire Council or to the public until after the analysis was complete TIF deal means the City provides Maxwell most of the funds needed to purchase St. Andrew property but… ◦ we have not seen the purchase agreement  is there a TIF clause? ◦ we have not seen the appraisals Need conflict of interest disclosures from all City elected officials

8. Peter Fisher’s Questions Will the project itself generate sufficient revenue to pay the TIF project costs? ◦ Only if the projections are accurate. Cities like Gainesville, FL have had problems with projects not generating enough revenue to cover TIF Is there a public benefit from this project, or are there features that the city is demanding that the developer would not otherwise incorporate? ◦ It depends on what kind of commercial is built. Residents preferred commercial in the elections, but didn’t demand that it be built at any cost

9. Peter Fisher’s Questions Does the project really need incentives, or does it need all of the incentives requested? ◦ Having not done a “but for” analysis, and having stopped negotiations at $4M TIF, it is not possible to answer this question If it does need incentives to be profitable, why should the city subsidize a project that the market cannot support? ◦ The project represents a loss in revenue per resident and higher taxes in the short term