This project is complex and requires a financial agreement among the Town, Alberta, and the metro district on the property to make it financially feasible. Alberta estimates the total cost of the project is $180 million. Of that, the Town will contribute up to $24.48 million, or 13.6 percent of the total project, in shared sales tax and development fee reimbursements. The financial agreement was approved by Town Council on Jan. 7, 2014.
Key components of agreement
The Town will share 27.5 percent of new sales tax revenues generated from that property for up to 25 years and will fund up to $4.45 million in development fee reimbursements and an additional $750,000 fee reimbursement tied to achieving 700,000 square feet in commercial development.
The metro district on the development property intends to issue and repay $28.8 million in net bond proceeds for qualifying public improvements.
Alberta intends to acquire the land, develop the property and otherwise fund the $180 million project.
The financial agreements also include restrictions on Alberta relocating certain existing business in Castle Rock to the new development.
The Town's financial involvement is advantageous, as the Town assumes little risk. The actual amount of sales tax revenue-sharing is a function of the scope and success of the project, and the Town will only share a portion of the new sales tax revenues generated by the proposed project. The development fee reimbursement means that a developer pays the building fee to the Town and gets a portion of it back when each business opens. As such, Town cash obligations are tied to actual private building activity on the new development site, with the Town reimbursing a portion on new development fees generated and paid by the private development.