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Authority hears proforma showing modest developer return on Kemmer Road project
Summary
The project proforma presented financing of roughly 65% debt and 35% developer equity with a projected internal rate of return of about 2.97% on developer equity over 20 years; members described that return as relatively modest and asked for additional modeling.
During the March 12 meeting the development team described the proposed financing structure for the Kemmer Road project as approximately 65% debt financing and 35% developer equity. The team said the projected internal rate of return on the 35% equity investment over a 20-year period is approximately 2.97%.
Members discussed the projected return and generally acknowledged that 2.97% appears relatively modest for the equity stake. The development team said initial expenditures would concentrate on early infrastructure in the first one to two years, with construction occurring across the first five years and later years dedicated to TIF reimbursement through tax increment revenues.
Authority members requested additional financial modeling, including alternative LBRF capture scenarios and potential adjustments to affordability levels, which the development team agreed to provide before a formal plan is submitted.
