The Platteville Common Council will be voting on the Library Block project development agreement probably at its Nov. 24 meeting.
The development agreement was scheduled for this week’s meeting, but was not put on the agenda because of what City Manager Karen Kurt called “some language” Tuesday morning. “We’re not expecting any substantial changes.”
There are, however, substantial changes that have taken place in the past several months from what was first proposed, including the city’s financial commitment to the project. The proposed development agreement was introduced at the council’s Oct. 27 meeting.
Project financing includes $16.1 million in federal New Market Tax Credits. The city will be paying $1.5 million in rent over seven years, because those tax credits require a market-rate lease.
The city is also making a $2 million loan from Tax Incremental Financing District 7 as part of the project financing. The developer’s agreement guarantees $2.685 million in TIF tax return between 2017 and 2036.
“That will essentially pay back the $2 million tax investment with interest,” said Kurt, although she added, “I can’t say that the lease payments will be offset solely by the revenues from the project.”
Kurt said the TIF loan will be structured as an interest-only loan early in the payment schedule, and “some portion of that we’re going to have to find in the budget in the short run.”
Kurt said Ehlers, a public finance consultant, looked over the project’s projections this summer with “very conservative estimates” for revenues and determined the potential need for additional revenue.
Kurt recently met with owners of two Platteville hotels over their concerns about the city’s contribution to the project. A letter to the editor in The Journal this week lists additional issues (see page 4A).
“To the extent that city money is going into it, it’s not subsidizing the hotel; it’s really going to subsidize” the library and parking parts of the project, she said. “If you look at the numbers, it’s really the hotel that’s subsidizing the other side.”