6E(1) Staff Report and Resolution No. 2722

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Redevelopment Commission Staff Report Redemption of 2006 TIF Revenue Bonds for Erskine Commons Project 7/1/10 In April 2004 the Redevelopment Commission entered into a Development Agreement with Anchor Acquisitions, Ltd. That Agreement anticipated two bonds being issued for the development of Erskine Commons, and EDC bond in the amount of $3.5 million, and a TIF Revenue bond in the amount of $2.44 million. The EDC bond was issued in 2005 for on -site improvements related to capping an old landfill, demolition of small structures on the site, relocation of electric utility lines and relocation of an underground pipeline. In 2006 the TIF Revenue bonds were issued for improvements to Ireland Road and the intersection with Michigan Street. Both bond issues have maturity dates in 2025. Development of Erskine Commons has progressed beyond expectations and is generating annual TIF of $3.1 million compared to the original projection of $.75 million. Consequently, we are in a position to pay off the TIF Revenue bonds now with cash on hand. Currently we have cash of about $4.8 million, while we need only about $2.3 million to redeem these bonds. With the remaining cash balance of about $2.5 million, plus the anticipated December TIF settlement of $1.4 to 1.5 million, we expect to be able to pay off the 2005 EDC bonds in the first quarter of 2011. A worksheet is attached showing our cash availability and the amounts required to pay off both the TIF Revenue and EDC bonds. Also attached is an aerial of the Erskine Commons development. The Resolution for your consideration today only seeks authorization to pay off the 2006 TIF Revenue bonds and staff recommends approval.