Redevelopment: "Developers Agreement necessary for TIF money and Commerce Grant "

In her comments at the Redevelopment Authority last week, Mayor Decker referenced the minutes of the Evansville Council, printed below, and noted that the Council was quite clear that these conditions must be met, and in addition, the satisfaction of all these points is a precondition of the Dept of Commerce Grant of #280,000 to be granted.


"Motion by Eager, seconded by Aikman, to recommend to Common Council that it commit to making a grant for 25% of the cost of acquiring and renovating the property at 7 E. Main St., estimated to be $1.9 million, subject to the following conditions: (1) the developers must provide the city with financial data and projections about the project to show there is need for the city to provide financial assistance, (2) David Wagner of Ehlers & Associates must provide projections of the tax increment that will be generated by the project, (3) the developers must provide financial data and renovation plans to the city assessor to allow her to refine her estimate of the equalized value of the property at completion, (4) the parties must enter into a written development agreement acceptable to the city, and (5) the developers must agree that if the city assessor determines the equalized value of the property at completion is less than $1.9 million, they would pay on an annual basis the difference between the increment that would be generated by $1.9 million of equalized value and the increment actually generated by the value assigned by the assessor. Motion passed."

It is unclear from the text of the Common Council resolution which legal entity would guarantee the increment stream, but it would appear that the developers would have to guarantee this personally since the value of the property would already be covered by the bank financing and hence only a personal guarantee would be an enforceable promise. It would be binding on their heirs and assigns. The devleopers did say that they had no intention of an exit strategy when asked about one by Mr. Otterstein. Mr. Otterstein did say that such a promise was enforceable.