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Financing Downtown

Redevelopment Projects

WDAC/WEDA Fall ConferenceOctober 2013

Overview Review of funding sources

Usual sources Not usually identified sources Unusual sources

Assembling various methods for various projects

Examples of commercial rehab, new projects and other forms of blight elimination

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Usual Funding Sources TIF

Bonded Pay-as-you-go Uses

Downtown infrastructure Developer incentive Admin/technical

assistance Marketing

Usual funding sources (cont.) CDBG

Entitlement Variety of local programs

can be developed Commercial rehab loan

programs Façade loan programs Rental rehab loan

programs State/small cities

Public facilities Includes blight elimination

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Usual funding sources (cont.) Other federal sources

EDA New market tax credits

Low income housing tax credits Historic tax credits WI DNR Environmental funds BID funds

Not Usually Identified Funding Sources Municipal general levy funds Private sector cash and debt Foundation grants/loans CDA/RDA revenue bonds Transportation Economic

Assistance (TEA) grants Partnership with Banks

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Partner with local banks Port Washington State Bank teamed with Main

Street for downtown redevelopment Bank set aside $250K for business enhancement

projects Similar programs in Grafton and Cedarburg

Partner with local banks Loans between

$5K-$50K Interest rate 1% 15 year term Fast approval

turnaround Committee

includes Main Street representative

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Unusual Funding Sources 1031 Exchange Tax Deed – Wisconsin SS Chapter 75 Use of existing assets (municipal property, etc.) Private property donation

Assembling the deal Site control is critical

Work with property owner Acquire building through

tax deed, condemnation or donation

Work with architect for full- color, professional renderings

Obtain construction costs

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Assembling the deal Analyze proforma and

sources & uses for the project

If there is a gap, consider options: Loan, grant, forgivable

loan, tax credits, TIF Consider sources of

options All public sources, All private source

Commercial Rehab

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Project funding Owner equity: cash plus second

mortgage on property with collateral on personal property

Bank loan for construction City buy-out of construction loan with TIF

grant City façade loan

Façade Project - Waupun

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Façade Project - Waupun

Façade Project - Waupun

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Project funding CDA cleaning and tuck-pointing brick at

CDA expense Drawings at CDA expense CDA loans for rehab Some CDA grants for rehab

City is working on complete block(s) at a time.

Blight Remediation

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Project funding City acquired building on a delinquent

tax deed from county Architectural rendering approved by

RDA/City, paid for from TIF TIF funds to rehab façade Building to be sold to private-sector buyer

and returned to tax rolls at higher value.

Former hotel, now blighted apartment

Foreclosure situation, City acquired

RFP, LIHTC/historic tax credit

Options?

Blight Elimination – Larger Scale Commercial

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Consider land banking Not always popular with elected officials

Taking property off tax rolls “govt. shouldn’t deal in real estate

Sell ‘functionally obsolete’ Sell blight threat spreads and decreases

property tax values Don’t be afraid to turn a project down if

it’s not the highest and best use

Loan funds for Rehab City of Wausau

established three loan funds from CDBG then capitalized with general levy contribution Commercial rehab Façade Rental rehab

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City of Wausau Projects Shepherd & Schaller Back When Café Heinneman Building St. Claire’s Menswear Fillmore Theater/Bar/Restaurant Chatterbox Loppnows Bar Lamplighter Runkel Abstract

As a result…. Corner of Third and Jefferson (now Sartori’s) Aveda Salon/Ginny’s Antiques Sweets on Third Downtown Grocery La Prima Deli Johnson Bank Allister Deacon Mall entrance to Third Street Coldwater Creek……………..

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Customize your program Know where to find the money Set high design standards Understand all the possible programs Partner with local banks, municipalities,

state and regional ED partners Be the catalyst and the connector Dream big for your downtown

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Questions?

Kristen Fish, CEcDRedevelopment Resources

715-581-4339www.redevelopment-resources.comkfish@redevelopment-resources.com