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Stuart Negotiations Update August 20, 2010 Page 4 Development Analysis Staff has asked Ehlers to prepare a quick analysis of the Stuart proposal as currently envisioned. The attached 3 -page analysis is based on 120 units with a minimum valuation of $97,600 per unit ($11.7M) at construction and 3% inflation. Under this set of assumptions, the project generates $4.8M in tax increment (gross amount) with a present value of $2.7M. To put this in perspective, this amount of TIF is still more than what the City anticipated under the worst case scenarios (1 B and 3B), which assumed a 110 unit senior condo- minium project starting in 2016 with full valuation in 2019. While it is less than our best case scenarios (1A and 3B), it is important to note that these scenarios assumed construction would start in 2011 with full valuation in 2014. It is highly unlikely that the City will find a senior condominium or cooperative to break ground in the same time frame as the Stuart proposal. Final Thoughts There are many moving pieces to these negotiations. Each side has made demands that have to be carefully evaluated. There are no easy answers. If the Council believes the terms are unreasonable, then we need specific direction on a counter proposal. It is our belief that this project has many positive attributes (i.e. good public relations, earlier development start, etc.) that outweigh some of the initial concessions. We should consider both the loss of cash assistance that will not be available after June 30, 2010 ($1.2M) and the present value of tax increment ($150,000+ per year).