Spotlight Corner: Developer Agreement in focus in Redevelopment meeting TONIGHT

The minutes of the Redevelopment Agency for January 2006 contained the following text in the official minutes:

"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 not clear from the meeting notes whether it was the intention of the RDA that January night to pay 25% of 2.3 Million as the current project cost is estimated. I thought that the stated amount of $450,000 was the limit granted by the city for the project.

Secondly, the language of the developers agreement must be seen to protect the taxpayer interest so that the increment to the taxpayer is achieved even as the prinicpal investment is vaporized. The problem of the "surprise" cost overruns was discussed, and the city was not to be the party that these surprises were put on. Grants or the developer group or the banks would have to step up. After all, this is no small concern---the project is already $400,000 higher in estimated costs than originally thought. More surprises are possible....and probable.

Stay tuned for full coverage of The Evansville Observer as we cover this important and historic meeting tonight. Better yet. Plan on attending and join in the discussion.