Title
Arlington Square Phase III Loan Repayment (B)
Explanation
On September 19, 1998, the CRA and the Arlington Square Wisteria Downs Limited Partnership entered into a Downtown New Construction Incentive Package Development Agreement that provided Arlington Square $60,000 in incentives. On August 12, 1998, the CRA borrowed $60,000 at 6.5% interest with a ten-year term from the City of Gainesville to facilitate the development of the Arlington Square Phase III project. Payments of $10,150 were to be made from the actual increment created by the five dedicated parcels beginning in July 2000 and running through July 2008. To date two of these annual payments have been made and one is budgeted for payment in July 2002. During 2000-2001, the increment from the dedicated parcels came to only $6,102. The loan agreement allows for partial payments, and states that each year the payment is applied first to the interest that has accrued. While it is reasonable to expect that the increment on these parcels will rise, it is unlikely that it will reach the $10,150 mark in the near future. Based on the current increment collection rate, it is anticipated that it will take the CRA 17 years to repay this loan to the City.
Section IV.C. of the Development Agreement includes in paragraph one a clause that states, "In the event that the annual tax increment revenues generated by the Project are less than the annual principal and interest payment on the Grantor's loan, the Grantee will personally guarantee to pay any shortfall." Based on this clause staff sent Arlington Square a request for payment of the $4,048 shortfall for 2000-20001.
Section IV.C. of the Agreement in paragraph two has a second clause that states "the Grantor may elect to structure a loan repayment schedule that is adjustable to the amount of the tax increment generated by the project over a fifteen year period." In this case, if the tax increment revenues generated by the project over...
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