On September 1, 2005, the City received a TIF petition from Emerson Partners, Inc. for the redevelopment of the Montgomery Farm Garden District area through the use of Tax Increment Financing (TIF). The overall Tax Increment Financing Reinvestment Zone encompasses approximately 113 acres at the southwest corner of Bethany Drive and US 75.

The City created the TIF Zone at the December 13, 2005 City Council meeting. In 2007, the City, Montgomery Farms Garden District Ltd., and Coventry II DDR/Trademark Montgomery Farms (Trademark) entered into an Amended and Restated Development Agreement (Agreement) that addressed issues related to the inclusion of Trademark in the TIF development.

In 2013, the City entered into a Supplemental Agreement to the Amended and Restated Development Agreement with Watters Creek Owner, LLC (WCO) successor to Trademark. In the Supplemental Agreement, the term was extended by five (5) years and the percentage of reimbursement was decreased from 50% to 45% for years 11-12 and from 45% to 40% for years 13 through the end of the term for property tax. Sales tax receipts commencing on January 1, 2016 are reduced to 45% and will be further reduced on January 1, 2018 to 40%. The FY2014 reimbursement was still at the 50% rate pursuant to the Supplemental Agreement.

In January 2015, the TIF No. 1 Board approved the Second Supplemental Agreement that was concerned with additional terms and conditions related to Watters Creek Owner's obligations with respect to the construction and payment for the Montgomery Boulevard extension and the Watters Branch bridge. The Second Supplemental Agreement indicates in Section 2.4 that upon occupancy of Building V, the percentage of reimbursement will be adjusted to 50% for both the property and sales tax. Building V received a temporary Certificate of Occupancy on March 1, 2016.

Attachment 1 reflects the current status of the TIF Fund with proposed deductions for the City's $15,000 administration cost and the proposed developer reimbursement of $895,234.51 to Watters Creek Owner, LLC.

Attachment 2 reflects the proposed developer reimbursement being appropriated between the City and County participation. The County participation is initially restricted to the priority projects such as the ramp reversal and traffic signalization. Therefore, the proposed $895,234 payment to Watters Creek Owner, LLC is allocated as $761,313 towards parking spaces and $133,921 towards the priority projects.

A proposed payment to the City in the amount of $15,000.00 is for the City's administrative costs.

The TIF Fund has adequate funds available for the payments and will result in $50,000 remaining as a fund balance pursuant to the Amended and Restated Development Agreement.

Staff recommends that the City Council approve the recommendation from the Tax Increment Financing (TIF) Reinvestment Zone Number One (Garden District) Board of Directors relating to payment to Watters Creek Owner, LLC, from the TIF Fund in the amount of $761,313.84 from the City tax increment, $133,920.67 from the County tax increment, and a payment to the City from the TIF Fund in the amount of $15,000 for administrative support.

I make a motion to approve the recommendation from the Tax Increment Financing (TIF) Reinvestment Zone Number One (Garden District) Board of Directors relating to payment to Watters Creek Owner, LLC, from the TIF Fund in the amount of $761,313.84 from the City tax increment, $133,920.67 from the County tax increment, and a payment to the City from the TIF Fund in the amount of $15,000 for administrative support.