Officials weigh redevelopment agreement, $42 million TIF ceiling and KDOT road costs

Jeff Dickinson, the village’s economic development consultant, told trustees the draft redevelopment agreement under discussion is a pay-as-you-go tax-increment financing deal and that consultant modeling produced a ‘‘not to exceed’’ assistance cap of $42 million (plus interest) based on current projections. ‘‘That’s the most money plus interest that could be provided to the developer to support the project,’’ Dickinson said, adding that the pay-as-you-go structure limits the village’s direct fiscal exposure if revenues do not materialize.

The consultant said his office reviewed the developer’s pro forma and ran more conservative scenarios, noting the most important constraints are how much incremental tax revenue actually arrives and how state law allocates part of that revenue. ‘‘State law requires . . . that if there are TIF‑supported housing units the first 40% of the incremental property taxes go to the schools,’’ Dickinson said, and the board should model for that reduction in available funds.

Village counsel also briefed trustees on other statutory obligations. Mr. Rooney said the library’s $120‑per‑patron statutory calculation must be included in the RDA and that the library has separately asked the developer for a per‑unit donation (the figures discussed included roughly $95 per person or about $380 per unit). ‘‘The library is asking that the per‑patron cost is linked to the library district’s prior financial year audit,’’ counsel said, adding that the developer donation request would be handled outside the RDA and not from TIF increment.

Trustees pressed staff for sensitivity runs showing what happens if construction and home sales happen faster or slower. Trustee Janet asked how the numbers change with different build velocities; Dickinson said his office can run alternate scenarios and provide projections showing how faster sales would affect increment timing and refinancing capacity.

Several trustees and staff also warned that county transportation requirements could materially alter the project’s eligible costs. Staff said KDOT and county review of required intersection and corridor improvements — raised medians, full‑depth pavement work, new turn lanes, bicycle paths and other right‑of‑way work — could increase eligible infrastructure costs and that some drafts under negotiation include higher ceilings to accommodate those items. ‘‘You may see a higher ceiling just as a term,’’ staff said, citing a potential example increase from $42 million to $48 million if KDOT‑required improvements and associated costs are incorporated.

Trustees asked staff to refrain from promising other taxing bodies (for example library or fire district allocations) any share of increment now, given there is not yet a projection that additional increment would be available after statutory school and library obligations and infrastructure costs are satisfied. Counsel asked for direction to include language in the RDA that would allow the board to revisit sharing increment in years 10 and 15 if revenues permit.

Next steps and timing: staff said the most recent RDA draft arrived late the afternoon of the meeting; trustees asked that redlines and the consultant’s alternate projections be circulated and suggested a special meeting the week of July 14 and continued action at the regular July 21 meeting, recognizing the schedule could run down to the 21st and that KDOT review might continue afterward.

Why it matters: the RDA/TIF would shape who pays for major roadway and utility upgrades tied to the development and how much incremental tax revenue is available for public benefits versus developer reimbursements. The board’s decisions on statutory allocations, the RDA ceiling and infrastructure costing will determine the village’s long‑term obligations and the developer’s ability to refinance and proceed.