Title
Public Hearing: Residences at Echelon Amendments to Chapter 100 Industrial Development Project.
Body
Issue/Request:
M-150 Echelon Land Development, LLC is the developer of the 243 unit multi-family Residences at Echelon project currently under construction on 12.6 acres immediately north of Aldersgate Methodist Church located on M-150 Hwy. M-150 Echelon Land Development, LLC is requesting to amend the Chapter 100 Industrial Development Project to amend the Payment in Lieu of Tax (PILOT) schedule and authorize additional bond capacity in the amount of $9,000,000 for a total maximum principal amount not to exceed $36,000,000 to complete the project. The request to amend the approved Chapter 100 Industrial Development Project is due to construction delays caused by various factors.
Key Issues:
M-150 Echelon Land Development, LLC is requesting to amend the current PILOT schedule to allow for one additional year for construction completion. The current approved PILOT schedule allows for the first two year PILOTS to be nominal amounts to allow for project completion during 2017 - 2018 with 2019 PILOTS established for project completion and full occupancy. The PILOT structure for the completed project is approved to be in place through 2028 (ten year period). As the project is not fully completed, M-150 Echelon Land Development, LLC is requesting one additional year of nominal PILOT's to allow for project completion and occupancy prior to triggering the "full" PILOT payment for the completed project. In summary, this would adjust the PILOT schedule by deferring the "full" PILOT payment by one year. Provided below is a comparison of the approved PILOT schedule and the proposed/requested PILOT schedule.
Approved PILOT Schedule Proposed/Requested PILOT Schedule
YEAR AMOUNT YEAR AMOUNT
2017 20,421 2017 20,421
2018 20,421 2018 20,421
2019 241,299 2019 20,421
2020 241,299 2020 241,299
2021 241,299 2021 241,299
2022 247,331 2022 241,299
2023 247,331 2023 247,331
2024 247,331 2024 247,331
2025 247,331 2025 247,331
2026 247,331 2026 247,331
2027 253,514 2027 247,331
2028 253,514 2028 253,514
2029 253,514
In addition to adjusting the PILOT schedule to allow for completion of the project, M-150 Echelon Land Development is requesting an increase in bond capacity of $9,000,000 for a total maximum principal amount not to exceed $36,000,000. This requested increase does not change the risk of the project for the City and only adjusts the bond amount to to cover project costs.
In making these adjustments, the maturity of the bonds would be exteded for one year to December 1, 2029; the term of the lease would be exteded by one year to December 1, 2029; and the term of the PILOT schedule exteded by one year through 2029.
Proposed City Council Motion:
No motion necessary - a proposed ordinance has been placed on the December 3, 2019 agenda for consideration.
Background:
On January 12, 2017 the City Council passed Ordinance No. 8069, authorizing the City to issue its Taxable Industrial Development Revenue Bonds (Residences at Echelon Project), Series 2017, in the maximum principal amount of $27,000,000 for the purpose of acquiring and improving certain real property including the construction and improvement of a luxury multi-family apartment project on the project site. The project consists of the design and construction of a 243 unit luxury apartment development in which the company receives tax abatement under the Chapter 100 structure on the real property included in the project. However, the company makes fixed PILOTS in accordance with the approved PILOT schedule. The PILOT schedule was based on information provided to the Council by City staff regarding the taz payments on comparable properties at the time of consideration. The approved PILOT amount was based on $993 per unit beginning in 2019 upon anticipated project completion.
Presenter
Mark Dunning, Assistant City Manager
David Bushek, Chief Counsel of Economic Development & Planning
Kimberly Spies, Rouse Frets White Goss Gentile Rhodes, P.C.
Jake Loveless, M-150 Echelon Land Development, LLC