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REQUEST FOR LA PORTE DEVELOPMENT CORPORATION AGENDA ITEM <br />Budget <br />Agenda Date Requested:13January 2014 <br />Source of Funds:Fund 038 <br />Requested By:Scott D. Livingston <br />Account Number: <br />Department: Administration/Economic Development <br />Amount Budgeted: N/A <br />Report: Resolution:Ordinance: <br />Amount Requested:$0 <br />Exhibit:Project Backup Information <br />Budgeted Item:YESNO <br />SUMMARY & RECOMMENDATION <br />Mr.RobJohnsonistheOwnerofRobJohnsonInterests(RJI),whichisalocalRealEstate <br />DevelopmentCompany.RJIdevelopedtheShoppesofTownSquareonCenterStreetand <br />PasadenaBlvdinDeerPark,Texas.RJIrecentlyplacedaportionoftheJayMarks <br />Chevroletdealershipundercontracttoconstructanewretail/commercialdevelopment. <br />Phase#1isplannedtoencompass2.86acres,whilePhase#2isplannedtoencompass1.67 <br />acres.Mr.JohnsonplanstocompletePhase#1 in2014andPhase#2byeitherlate2014or <br />early 2015. <br />RJIhas beenpursuingandnegotiatingwithmultiple, retailprospectsto lease space in Phase <br />#1 of the new, proposed retail development. In order to accommodate a larger, national retail <br />tenant in the retail center, RJImust construct a larger building with firewallsbetween the <br />adjoining lease spaces. In order to keep theconstruction costs within limits that will still allow <br />RJIto offer competitive and attractive lease rates to the prospective national retail tenant, RJIis <br />requestinganadditional incentive in the amount of $40,000. <br />Thesubjectpropertyof both Phases #1 and #2 isonthetaxrollsfor$700,000,which <br />yieldsapproximately$4,970(at$0.71/$100ofassessedvalue)annuallyintaxestotheCity <br />ofLaPorte. Oncedevelopmenthasbeencompleted on both phases,theestimatedtaxable <br />valueofthenewdevelopmentwill be$6,000,000to$8,000,000.Excludingsalestax <br />revenue,theestimatedannualtaxeswouldbe$42,600to$56,800.Takinganaverageofthe <br />two,iftheestimatedtaxablevalueweretobe$7,000,000,theannualtaxeswouldbe <br />$49,700.Therefore,theestimatedannualincreaseintaxesuponcompletionofthemulti-phase <br />$44,730 <br />projectis. <br />$106,000 <br />Assuming a total incentive grant of ($66,000 plus $40,000) and new annual taxes <br />$44,7302 years and 4 months <br />($49,700 -$4,970) of , the break-even point would be . <br />BaseduponsomeofthequestionsabouttheprojectonJune 10, 2013,pleasenotethatthe <br />followinginformationis beingprovided: <br /> <br />