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City outlines Arbor South deal: developer builds parking decks, city to purchase with TIF‑backed bonds
Summary
City staff on April 17 outlined a proposed deal for Arbor South in which the private developer would finance and build phased parking decks and the city would buy completed decks with bonds repaid by new tax increment and net parking revenue.
City staff on April 17 presented the framework for the Arbor South redevelopment and how the city would use tax increment financing and municipal bonds to acquire three phased parking decks once they are constructed.
Joe Giant, Ann Arbor’s economic development director, told council that the developer will fund initial construction for all phases, including parking decks, market-rate and affordable housing and infrastructure; the city would then purchase each completed deck for the lesser of actual construction cost or a predetermined price and finance the purchases through separate bond issuances. "PFM's review confirmed that the development would not be viable, without the TIF," Giant said, describing the municipal advisor’s review of the developer pro forma.
The primary sources of bond repayment would be new tax increment generated by the privately owned portions of the project and net parking revenue from the decks. To enable the use of school‑reimbursing Brownfield TIF for eligible costs, staff said a Brownfield plan and related approvals will be required from the county brownfield authority, the county board of commissioners and the state of Michigan.
City…
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