|
Mr. Moore
<br />July 24, 1997
<br />Page 2 of 3
<br />The underlying concept of the contract is simply to calculate the total payment to
<br />the City at 53% of the current City tax rate for existing improvements and at 30%
<br />of the current tax rate for improvements completed during the contract period.
<br />The distinction between annexed and non -annexed only effects the distribution of
<br />the payment in the City's financial records.
<br />A calculation of the estimated in -lieu -of -tax payments for a $150 million
<br />investment to be complete in late 1999, based on current contract terms and the
<br />assumption that a similar contract will be entered into in future years, is shown
<br />below:
<br />Taxes
<br />Abatement
<br />In Lieu
<br />Year
<br />At Full Value
<br />Percent
<br />Amount
<br />Amount
<br />2000
<br />$ 1,065,000
<br />70
<br />$ 745,500
<br />$ 319,500
<br />2001
<br />1,065,000
<br />47
<br />500,550
<br />564,450
<br />2002
<br />1,065,000
<br />47
<br />500,550
<br />564,450
<br />2003
<br />1,065,000
<br />47
<br />500,550
<br />564,450
<br />2004
<br />1,065,000
<br />47
<br />500,550
<br />564,450
<br />2005
<br />1,065,000
<br />47
<br />500,550
<br />564,450
<br />2006
<br />1,065,000
<br />47
<br />500,550
<br />564,450
<br />2007
<br />1,065,000
<br />47
<br />500,550
<br />564,450
<br />2008
<br />1,065,000
<br />47
<br />500,550
<br />564,450
<br />Total 9,585,000
<br />4,749,900 4,835,100
<br />You will notice that there is no payment for 1999. Per our contract, construction
<br />in progress is not assessed an in -lieu -of -tax payment.
<br />The total value of abatement over the period is $4,749,900 and the average
<br />payment is $537,233, which is equivalent to a 35.8% tax rate.
<br />In providing an answer to our willingness to consider changes to the Industrial
<br />District Agreement during the next renewal, I feel compelled to provide a brief
<br />description of the renewal process. Traditionally, the City has gathered Industry
<br />representatives together approximately eighteen months prior to the end of the
<br />current contract. From this group, the City asks that a committee be formed in
<br />which to negotiate the renewal. We ask that this group include industry from
<br />both Industrial Zones and include companies of all sizes, in other words, we want
<br />representation from a cross section of the companies. The only guideline we
<br />offer is that any changes to the contract not impact the net amount of payments
<br />to the City.
<br />
|