The Cape Coral City Council, sitting as South Cape Community Redevelopment Agency commissioners, approved a $45.7 million tax rebate for the Bimini East project on Wednesday.<\/p>\n
Assistant City Manager Mark Mason took the board through a presentation to shed some light on Tax-Increment Financing, and the proposed agreement with Crowne Development.<\/p>\n
Mason said when a city creates a redevelopment agency, which was done in the South Cape 1986 and expanded in 2003 and 2009, the taxable value of the property is frozen as the baseline.<\/p>\n
Property taxes that come due as the properties are developed and so assessed to reflect the increased valuation fund the CRA and also can go back into a particular property as a rebate.<\/p>\n
The funding is unique to CRAs.<\/p>\n
\u201cThat is the year that starts the tax increment calculation for every year thereafter,\u201d Mason said, adding that they receive a document from the property appraiser office regarding that value for the CRA. \u201cA portion of those taxes generated, increases the value associated with the CRA, is deposited into the trust fund \u2013 taxes from the county and city.\u201d<\/p>\n
He said the TIF agreement is consistent with what staff told the City Council when the developer agreement was presented.<\/p>\n
\u201cThis TIF agreement is one subset for a number of different agreements with the DA,\u201d Mason said. \u201cIf the DA never happens, the TIF agreement is null and void.\u201d<\/p>\n
The TIF agreement runs through 2042, or when $45.7 million is met, and will work on a pay-as-you-go basis. Mason said the agreement has a completion trigger \u2014 no rebate is provided until certificate of occupancy is given and taxes are paid by the developer before delinquency each year.<\/p>\n
The Crown proposal is for a $500 million project that includes 900 residential units, 250 hotel keys, 210,00 square feet of medical office, 55,000 square feet of general office, 130,000 square feet of ground floor retail and a marina with transient boat slips on a total 34-acre assembled CRA footprint.<\/p>\n
\u201cThe rebate is self-funded, self-generating. It is generated by capital improvements that are performed,\u201d Mason said. \u201cIt will expire five years before the CRA expires, which is in 2047.\u201d<\/p>\n
If Crown Development underperforms, it will receive a smaller rebate, and if there is a late completion, there will be no rebate.<\/p>\n
\u201cThe agreement protects Cape Coral taxpayers,\u201d Mason said. There is a \u201chard dollar cap of $45.7 million and it ends in 2042. It is pay as you go, and rebates only occur when development occurs.\u201d<\/p>\n
City Manager Michael Ilczyszyn, who also acts as the CRA\u2019s executive director, began Wednesday\u2019s discussion by stating that when the developer\u2019s agreement is brought back to the City Council it will not include a transfer of Four Freedom\u2019s Park \u2014 that land will remain the city of Cape Coral.<\/p>\n
\u201cJust as a reminder, sitting as the CRA, our purpose is to look at the CRA role in supporting a development in nature and accomplishing the redevelopment plan,\u201d he said.<\/p>\n
The development agreement for Bimini East will be considered by the City Council and will include assurances and stop measures.<\/p>\n
Ilczyszyn said when the developers go through the project, the CRA partners will completely redo the infrastructure in and around the substantial development, which he said will absolutely be the case at Bimini East.<\/p>\n
\u201cIt is a baseline of getting the horizontal complete before any vertical,\u201d he said. \u201cThe greatest risk to us as the CRA is that the city takes it over and it doesn\u2019t generate any TIF. The worse, the city agrees to take it over and it becomes tax free in perpetuity. It takes vertical improvement in order to generate TIF into the trust fund and we use it to remove slum and blight.\u201d<\/p>\n