LONGBOW INCENTIVE AGREEMENT

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Claud Francis
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1 LONGBOW INCENTIVE AGREEMENT City Council November 7,

2 Resolutions City: 1. IGA w/lura set the terms of the loan (see below #1) 2. 1 st Amendment to the IGA w/larimer County Cap the TIF Share LURA: 1. IGA w/city set the terms of the loan (see above #1) 2. Purchase and Sale Agreement between Larimer and LURA Includes 1 st Amendment to the IGA (see above #2) Includes the lease agreement with Larimer County 3. Purchase and Sale Agreement between LURA and Longbow Industries, LLC. Incentive Agreement with LURA Parking Lot agreement 2

3 Purpose: IGA set the terms of the loan between City and LURA Loan #1 - $732,000 Loan #2 - $750,000 Acquire the building Amount: $732,000 Purpose: Amount: $750,000 Fund the incentive agreement to reoccupy the building Term: 1 3 percent Term: 10 3 percent Repayment: Sale of the building to LPR/Longbow Repayment: Tax Increment Total: $754,000 Total: $879,229 3

4 Finley Block TIF Projections & Obligations (w/lpr) 2014 actual 2015 actual 2016 actual Total Projected Property Tax Increment* $ 190,232 $ 204,174 $ 302,648 $ 323,000 $ 326,230 $ 329,492 $ 332,787 $ 336,115 $ 339,476 $ 342,871 $ 346,300 $ 349,763 $ 353,260 $ 317,934 $ 4,394,283 w/lpr HQ $ 56,292 $ 56,855 $ 57,424 $ 57,998 $ 58,578 $ 59,164 $ 59,755 $ 60,353 $ 54,318 $ 520,737 Brinkman Supplemental Payment $ 37,075 $ 37,075 Ending Reserve $ 447,268 $ 345,691 $ 975,940 $ 486,610 $ 602,697 $ 724,275 $ 848,375 $ 983,865 $ 1,153,713 $ 1,329,668 $ 1,511,810 Projected Sales Tax Increment** $ 35,085 $ 68,439 $ 84,753 $ 89,300 $ 91,086 $ 92,908 $ 94,766 $ 96,661 $ 98,594 $ 100,566 $ 102,578 $ 104,629 $ 106,722 $ 80,041 $ 1,246,128 Short Term Loan/Acquire the building $ 34,000 $ 732,000 $ 732,000 Longbow Sale Proceeds $ 732,000 $ 732,000 Public Improvements/Building $ 750,000 $ 750,000 $ - Minus Obligations Lincoln Place MFA ($30,408) ($30,408) Environmental Study ($10,000) ($10,000) Blight Study & Plan Amendment ($3,100) ($3,100) Building Permit Waiver ($50,000) ($50,000) Gallery Flats Obligation ($49,849) ($143,879) ($143,879) ($250,270) ($250,270) ($250,270) ($250,270) ($250,270) ($250,270) ($250,270) ($250,270) ($250,270) ($250,270) ($250,270) ($3,090,577) Obligation for the development ($87,923) ($87,923) ($87,923) ($87,923) ($87,923) ($87,923) ($87,923) ($87,923) ($87,923) ($87,923) ($879,229) Payment to the County to acquire the bldg ($732,000) ($732,000) Payment to acquire the parking lot ($271,000) Repayment to the City of the Acquisition ($754,000) ($754,000) County Share *** ($17,680) ($26,344) ($26,607) ($26,874) ($29,830) ($30,128) ($30,429) ($33,776) ($28,332) ($250,000) LPR Incentive ($150,000) ($600,000) Remaining Balance $ 81,960 $ 148,129 $ 217,178 $ 345,691 $ 975,940 $ 486,610 $ 602,697 $ 724,275 $ 848,375 $ 983,865 $ 1,153,713 $ 1,329,668 $ 1,511,810 $ 1,625,910 Estimated Ending Reserve $ 447,268 $ 345,691 $ 975,940 $ 486,610 $ 602,697 $ 724,275 $ 848,375 $ 983,865 $ 1,153,713 $ 1,329,668 $ 1,511,810 $ 1,625,910 $ 1,625,910 COUNTY TOTAL $ - $ (17,680) $ (44,024) $ (70,631) $ (97,505) $ (127,335) $ (157,462) $ (187,892) $ (221,668) $ (250,000) $ (250,000) $ (250,000) $ (250,000) $ (250,000) $ 205,976 *Property tax increase at 1 percent per year **Sales tax increases at 2 percent per year ***County share increases at 1 percent per year and includes only the revenue that would otherwise be paid to the County. The supplemental payment in 2015 was due to Gallery Flats not reaching the minimum valuations for tax increment in year one. In subsequent years, the building valuation has increased and it has met the minimum threshold under the agreement. 4

5 1 st Amendment CAP the TIF Share Amends the original IGA with Larimer County and LURA. The amendment will cap the amount shared with the County at $250,000. Past payments are credited against the cap (~$44,000). Roughly $206,000 remaining under the cap (if approved). 5

6 Purchase and Sale Agreement w/longbow Industries LLC Longbow Industries acquires the building from LURA for $732,000 Includes the Incentive Agreement with LURA $750,000 match as a reimbursement for public improvements (see right) Longbow will be required to invest a minimum of $1.5 million into the building to receive the entire match Public Improvements: Environmental-related abatement; Investments in energy efficiency; Building façade and those portions of the Building exterior that are visible from a public right-of way; City-required improvements to adjacent streets, curbs and gutters; Adjacent sidewalks; Landscaping; Street name, traffic control and permanent traffic control signs; Water and electric distribution systems; Stormwater control facilities; and Sewer collection improvements. 6

7 Schedule Item: Estimated Time To Complete: Close with Larimer County Before January 31, 2018 Close with Longbow Before September 30, 2018 (no later than March 31, 2019) Payment to City from LURA ($754,000) Before December 31, 2018 Longbow Reinvestment Period October 1, 2018 through March 30, 2020 (18 months) 7

8 Questions 8

9 City Council Meeting October 24, 2017 Funding for acquisition of Larimer County Building, parking lot and Longbow/LPR Incentive 9

10 Agenda 1. Council Action 2. Project Summary 3. Questions Exhibits: Schedule of Consideration Appropriation Flow Chart Loan Terms Attachment 5 10

11 Schedule of Consideration October 24, st Reading City Appropriation Ordinance (2018 Budget) 1 st Reading LURA Appropriation Ordinance (2018 Budget) 1 st Reading LURA Appropriation Ordinance (2017 Budget) November 7, nd Reading City Appropriation Ordinance (2018 Budget) 2 nd Reading LURA Appropriation Ordinance (2018 Budget) 2 nd Reading LURA Appropriation Ordinance (2017 Budget) Resolution IGA between LURA and City for the loan terms Resolution Purchase and Sale Agreement with Larimer County Special Warranty Deed Lease Agreement w/county Amended IGA with County for TIF proceeds Resolution Purchase and Sale Agreement with LURA and Longbow/LPR Special Warranty Deed Parking Lot Easement Longbow Incentive Agreement 11

12 Item #1: 2018 Budget for City Loan Attachment 6 City Appropriation to the 2018 budget $1,482,000 Loan to the Finley s Block URA plan area from the General Government CEFs Finley s Block URA Appropriation to the 2018 budget Source Amount Item #2: 2018 Budget for LURA $732,000 to acquire the County Building $750,000 to fund the Incentive Agreement $261,000 to acquire the Parking lot $22,000 to fund future interest payment $10,000 to fund closing costs *The appropriation includes the $732,000 in anticipated sale proceeds from LPR in The total appropriation is $2,507,00 City Loan $1,482,000 URA Reserves $293,000 Total $1,775,000 Item #3: 2017 Budget for LURA predevelopment costs Finley s Block URA Appropriation to the 2017 budget $17,000 Due Diligence $7,250 Alta Surveys $10,000 Earnest Money Deposit Source Amount URA Reserves $34,250 12

13 Loan Terms Loan #1 ($728,000) Loan #2 (750,000) Purpose: Amount: Acquire the building $732,000 Purpose: Fund the incentive agreement to reoccupy the building Term: 1 3 percent Amount: $750,000 Repayment: Sale of the building to LPR/Longbow Term: Repayment: 10 3 percent Tax Increment Total Repayment: $754,000 Total Repayment: $879,229 13

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