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<br />(PA~ Iq <br /> <br />III. <br /> <br />COST OF THE AGREEMENT TO THE AGENCY (RDA) <br /> <br />This section presents the total potential cost of the Agreement to the Agency that will be funded <br />with redevelopment agency tax increment funds. The "net cost" of the Project after consideration of <br />the revenues that will accrue to redevelopment funds, if any, is also evaluated. The net cost can be <br />either an actual cost, when expenditures exceed receipts, or a net gain, when revenues created by <br />implementation of the Agreement exceed expenditures. <br /> <br />A. <br /> <br />Estimated Cost to the Agency (RDA) <br /> <br />The costs to the Agency to be funded from RedevëIopment Agency's Low and Moderate Income <br />Housing Fund is estimated at $3.52 million, comprised of approximately $613,200 of the $1.35 <br />million "Land Grant" for site acquisition, and $2.38 million of the $2.63 million "Development <br />Loan", and $533,000 of water facility fees. The remaining subsidy, or approximately $987,000, <br />is expected to come from Community Development Block (CDBG) funds and Home Partnership <br />Investment Funds. <br /> <br />Land Grant funded by T.I. <br />Est. Water facility Fee Subsidy <br />Development Loan Funded by T.I. <br /> <br />$613,200 <br />$533,000 <br />$2.377.000 <br /> <br />Est. Total Agency Cost Funded by T.I. $3,523,200 <br /> <br />B. <br /> <br />Revenues to the Agency (RDA) <br /> <br />Per the Agreement, the Agency's Development Loan and Fee Subsidy will be repaid from 70% <br />of the Project's net cash flow and net sales proceeds over a 40-year term. It is estimated that the <br />loans will be repaid within 35 years. The present value of these payments, discounted at 5%, is <br />estimated at $2.06 million. It is assumed that 100% of the payments received by the Agency will <br />be deposited in to the Agency's Housing Fund. <br /> <br />The Agency will not receive any property tax increment resulting from the Vera Street Project as <br />the rental units will be tax-exempt and thus will not generate any property tax. <br /> <br />c <br /> <br />Net Cost to the Agency (RDA) <br /> <br />The net cost to the Redevelopment Agency resulting from this transaction is the difference <br />between the Agency's costs to be funded with increment funds and Agency revenues. As shown <br />below, it is estimated that the transaction will result in a net cost to the Agency of $ 1,460,000. <br />The net Agency cost is as follows: <br /> <br />18610.001\028-004.doc; 1/20/2005 <br /> <br />Keyser Marston Associates, Inc. <br />Page 8 <br />