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South Bend <br />Regular Me <br />elopment Commission <br />- August 23, 1985 <br />6. NEW BUSINESS (Cont.) <br />a. ContCinued... <br />Calculations of all of this show that the <br />total increment that can be expected from <br />act vities which have been concluded and the <br />development which will be assessed as of March <br />1, 1985 will be sufficient to cover the <br />pri cipal and interest payments on a $4.2 <br />million bond issue without having to resort to <br />any kind of a supplemental tax. It was the <br />Co ssion's desire to go with the type of a <br />bond issue that could be supported, rather <br />tham to levy a tax to support it. The <br />revEmues are projected to be approximately two <br />tirms the annual payments on the bonds. So <br />there is a cushion to give the bond purchasers <br />that much more confidence that this is a <br />sec e bond issue. <br />Mr- Wensits asked over what period of time the <br />bon is will be repaid. Mr. Treptow stated that <br />it a seventeen year issue. <br />Mr. Wensits asked what happens if the $12.8 <br />mil ion base is eroded through businesses <br />closing or moving. Mr. Treptow stated that by <br />statutory definition it remains at that level. <br />If some buildings are demolished, it comes out <br />of the revenue. We have built in to all of <br />our calculations a healthy allowance for a <br />decrease in taxable assessed valuation because <br />of demolition activities and acquisition of <br />property by the City. If the City acquires <br />land, that land converts from tax paying <br />property to non -tax paying property. That <br />will. be turned around again into tax paying <br />property when it is sold. Springsted has not <br />ass that. They have assumed the worst and <br />have already decreased the revenue for planned <br />acquisitions and demolition projects. <br />What. happens is the tax rates are determined <br />for the whole City based on this kind of <br />valuation being available, and then it applies <br />to EL11 property including valuation created by <br />activities of the Redevelopment Commission. <br />So there is no special levy. This property <br />pay the same amount of taxes that it would if <br />there weren't any tax increment district. <br />That valuation is captured and, therefore, the <br />ME <br />