Berkman Apartments (Alatus Development)

Establishment of Tax Increment Financing (TIF) District and Development Assistance Agreement (DAA). The land use approvals would allow the Project to proceed to construction by the developer and are independent of any financial assistance considerations or approval as a DMC Public Infrastructure Project. However, the Developer has indicated that even with the land use approvals in hand the Project would not be able to proceed to construction and be financially feasible without or "but for" some financial assistance from the City or the DMCC. The developer has provided detailed financial information to document the need for $11.5 Million in assistance to close the financial "gap" for this Project. As the DMCC Board is aware, the potential receipt of State DMC funding will grow over time but is lower/limited in these early years until private capital investments increase well beyond the minimum threshold for State DMC funding of $200 Million. As both an alternative to State DMC funding to fund early stage DMC projects and in order to retain future bonding capacity for future DMC capital needs, the City can utilize its authority to establish a tax increment financing
district within the DMC Development Plan Area to provide financial assistance through TIF to
allow the project to proceed.

The City Council will consider establishment of a tax increment district and terms and conditions of a Development Assistance Agreement (DAA) at its 12/19/2016 meeting if the Council approves the Restricted Development Final Plan following
the public hearing. Obviously, if Final Plan were not to be approved then no decision on financial assistance would be needed.

In instances in which the City provides TIF financing for DMC Public Infrastructure Projects, the State legislation makes provision for the City to obtain credit for such costs towards its required $128 Million City DMC contribution. For the Alatus 2nd Street Development project the staff will be recommending to the Mayor and City Council that the City provide $10.S
million of tax increment financing assistance for this Project. The Council will consider this as a component of the Development Assistance Agreement (DAA) at their meeting on December 19, 2016. It should be noted that the City staff has been working closely with the DMC EDA staff in the review of all aspects of this Project including the proposed amount of financial assistance that is recommended for the Project. The DMC EDA will be providing their comments on the Project separately and independently from the City staff. The DMC EDA staff and the City staff are in agreement concerning the recommended amount of assistance and the developer has indicated that they can proceed with the Project with that $10.5 million
level of assistance. Approval by the DMCC Board of the Alatus 2nd Street Development Project as a DMC Public Infrastructure Project will also mean that DMC provisions relating to prevailing wage rates, WMBE, and American-made steel will also apply for the construction of the Project.