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Staff recommends advancing request to raise TIF cap on The Lanes; advisers say city may net more revenue
Summary
Staff briefed the committee on a developer request to raise The Lanes' TIF PAYGO cap from $5.895M to $7M and to lower developer percentage blocks in later years; analysts presented NPV comparisons suggesting the revised structure could increase the city's NPV to roughly $1.35M and still leave developer receipts near $6.8M.
City staff and outside advisers briefed the committee on a developer request to amend The Lanes' 2020 PAYGO TIF agreement by increasing the cap from $5,895,000 to $7,000,000 and lowering revenue‑share percentages in years 11–20 (for example, changing the later blocks from 90/85/80/75 to 90/85/75/65). Laura Smith and financial adviser Bruce Kimmel explained the request is driven by higher final project costs (staff said development costs were about 53% higher than in 2020) and higher than anticipated assessed values, which would otherwise produce an early payoff and eliminate expected city shares in years 19–20.
Kimmel presented net present value analyses, saying under the current agreement the developer's NPV was approximately $3,700,000 and the city's NPV just under $1,000,000; the proposed revisions would increase the developer's NPV modestly and raise the city's NPV to about $1,350,000. Bond counsel Kevin Wimpey reminded the committee TIF‑eligible expenses are defined by statute and generally are considered on a cost‑by‑cost basis rather than by timing. The committee agreed to advance the matter to a public hearing on May 20 and instructed staff to return with the detailed pro forma, NPV tables, and an analysis of impacts to other taxing jurisdictions; adoption of the TIF project plan would require a supermajority (six votes).
