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95 EAST PROVIDENCE WATERFRONT DEVELOPMENT DISTRICT COMMISSION Vice-Chairman: William J. Fazioli Executive Director: Jeanne M. Boyle Members: John Gregory Steven Hardcastle Jacob Harpootian Paul Moura John Pesce Luis Torrado Peter Willey To: From: Re: East Providence City Council East Providence Waterfront District Commission Kettle Point LLC- Tax Increment Financing Proposal Date: June 12, 2014 At its meeting of June 5, 2014 the Waterfront Commission held a meeting on the revised application of Kettle Point LLC for tax increment financing (TIF) for public improvements to be included in the medium-density residential project located on Kettle Point Ave., off of Veteran s Memorial Parkway. The Commission originally recommended the approval of the TIF application of Kettle Point LLC in May of A revised Fiscal Impact Analysis prepared by Municap, Inc. and dated June 5, 2014, is attached. A presentation was made to the Commission by the applicant s representatives. The Commission was also informed that the City s Tax Assessor and the City Financial Advisor commented upon and suggested revisions to the proposal, which have been incorporated by the applicant (please see attached). The City s Bond Counsel, Edwards, Wildman and Financial Advisor, First Southwest have also reviewed the proposed revisions. The developer seeks TIF bonds in the not-to-exceed amount of $10,593,000, compared to total project cost of approximately $78 million of private investment. No existing tax revenues will be obligated and there is no recourse to the City's general fund or its full faith and credit if the project does not materialize. Under the revised TIF plan, the City would commit sixty percent of the increase in real property taxes that result from the development of the project to pay the costs of the public improvements associated with the project. The bonds will be sized to be paid from fifty percent of the tax increment revenues over the term of the bonds, which is twenty-five years. Revenues will be pledged in the amount of seventy percent of the tax increment revenue to provide sufficient coverage on the debt service for the bonds versus the sixty percent originally proposed in Sixty percent of real property taxes of the increase in assessed value of the Kettle Point project will be transferred to a special fund and pledged to the TIF. Any portion of the tax increment revenues that is not required for the tax increment financing will be returned to the City each year after the payment of debt service. The bonds will be further secured by a backup special assessment if tax increment is insufficient in the form of a minimum tax agreement with the developer T a u n t o n A v e. R o o m E a s t P r o v i d e n c e R I, (40 1 ) w w w. e a s t p r o v i d e n c e w a t e r f r o n t. c o m

96 Memo To City Council from Waterfront Commission Kettle Point TIF Application The public improvements included in the project are: remediation and site preparation of land for use as three public parks and pedestrian paths; public parking; waterfront and cove remediation; an upgraded fishing pier; 3,300 linear feet of public roads; upgrades to Veteran s Memorial Parkway; a pump station; a sewer force main; and improved stormwater management and coastal features. The cost of the TIF will only cover approximately $7,000,000 of a total of $16,378,640 in public improvements; the remaining costs will be paid by the developer. The amendment to the TIF and overall project will change the sixty-nine proposed luxury condominiums to luxury apartments. This change is due to the greater ability for apartments to be financed which enhances the marketability of the TIF bonds. Sixty-two free-standing condominiums will remain. The developer indicated that the apartments are designed in such a way that they could be converted to condominiums at a later date should market conditions warrant. The overall development will still be open to the public with parks, access to the East Bay bike path and 407 housing units, ten percent of which will be affordable. The Commission noted that the projected new net City revenues over the life of the agreement would be over $10 million. The project will create approximately 687 temporary full-time jobs and 341 indirect jobs. It is projected that there will be eleven school-aged children living in the development at full build-out. The Waterfront Commission unanimously voted to recommend to the City Council that they approve the revised request for tax increment financing by Kettle Point LLC. Respectfully submitted, WILLIAM J. FAZIOLI, Vice Chairman/Acting Chairman WJF/RG cc. Paul Lemont, City Manager Timothy Chapman, City Solicitor Paul Luba, City Finance Advisor Malcolm Moore, Finance Director Steven Hazard, Tax Assessor Maureen Gurghigian, First SouthWest Financial Advisors Karen Grande, Esq.- Edwards Wildman Richard Baccari II- Kettle Point LLC Keenan Rice, MuniCap, Inc. Lindsey Banner, MuniCap, Inc. Waterfront Commission g:\waterfront documents\kettle point\tif\2014 kettle point tif memo from wc to cc.docx Page 2