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<br />? <br /> The third ordinance authorizes the District to construct the improvements, <br />provide related services, and impose special assessments against the <br />condominium units for special benefits received as a result of the project. See <br />Section 67.1521 RSMo. <br />J-2,3,4-b <br /> <br /> The estimated value of the tax abatement, assuming an 8% interest rate, is <br />$445,000, including $45,000 in transaction costs (blighting study, developer legal fees, <br />etc.), so net proceeds would be $400,000, the approximate amount Highland Homes <br />claims it lost on the 722 Limit project because University City's purported sale was <br />unauthorized and void due to lack of voter approval. See Charter Section <br />98(Restriction on Sale of any Dedicated Park). The District will levy special <br />assessments against the condominium units in the total estimated tax abatement <br />amount of $65,000 per year, and issue obligations pledging as collateral the $65,000 <br />annual cash flow from the assessments. The District will enter into a development <br />agreement with Highland Homes whereby Highland Homes will perform the <br />development for the $400,000. University City will keep the $224,850 net sale proceeds <br />from the purported sale of 722 Limit to Highland Homes on July 20, 2005, but by virtue <br />of the tax abatement will not collect its share of $445,000 in property taxes that would <br />have been assessed against the project property. According to my 2006 Real Property <br />Tax Bill, University City receives 12.28% of the tax distributed, so by my calculations <br />University City will lose an estimated $54,646 in taxes. University City will, however, get <br />to keep the $224,850 net sale proceeds, and Highland Homes will "donate" 722 Limit <br />back to University City upon execution of the Development Agreement (Exhibit C). <br /> We have had two executive sessions (1/22/07 and 5/21/07). At each session the <br />City Council received my four-page background letter dated January 18, 2007, plus <br />attachments thereto, including Highland Homes' January 5, 2007 settlement proposal, <br />November 20, 2006 letter on its legal position and October 23, 2006 e-mail on its <br />expenses associated with its plan to develop 722 Limit. <br /> <br />RECOMMENDATION: <br /> Approval <br />September 4, 2007 <br />J-2,3,4-c <br /> <br />