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TO:Mayor and City Council <br />FROM;Ron Moorse, City Administrator <br />DATE;October 24,2000 <br />SUBJECT : Senior Housing Project -- Tax Increment Financing <br />In a recent meeting with Frank Dunbar regarding his senior housing proposal, he reiterated the <br />importance of substantially reduced property taxes to the viability of the project ~ in terms of <br />enabling targeted rent levels. He further indicated that the only feasible way of accomplishing this <br />is through the use of tax increment financing. The way this would work is that each year a <br />substantial portion of the property taxes generated by the development would be used to reimburse <br />the developer for eligible expenses. This revenue would enable the rents to be held at below market <br />levels. <br />Because the use of tax increment financing is key to the viability of the senior housing project, a <br />determination needs to be made as to whether the Council is willing to consider the use of tax <br />increment financing before the project moves further in the City ’s review process. Staff has <br />reviewed this project and the requested use of tax increment financing with Rusty Fifield of Ehlers <br />Associates, the City ’s financial consultant. He indicated tax increment financing is the only feasible <br />method of providing a financial benefit that is equivalent to substantially reducing property taxes. <br />It is important that the Council make a determination about whether they are willing to consider the <br />use of tax increment financing in relation to the senior housing project prior to the City ’s <br />development review process moving too much further along. If the Council would like to meet with <br />Mr. Dunbar and/or Rusty Fifield regarding this issue, a work session can be scheduled. <br />;