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EVERETT CITY COUNCIL AGENDA ITEM COVER SHEET 3 <br /> PROJECT TITLE: <br /> A Resolution Concerning 12.18.13 Briefing COUNCIL BILL# <br /> Deployment of City of Everett Proposed Action Originating Dept. Public Works/Legal <br /> CDE LLC New Markets Tax Consent Contact Person R. Tarry/T.Benedict <br /> Credit Allocation 12.24.13 Action Phone Number 425-257-8922/8669 <br /> First Reading FOR AGENDA OF 12.18.13/ 12.24.13 <br /> Second Reading Initialed by: <br /> Third Reading Department Head <br /> Public Hearing CAA <br /> Budget Advisory Council President CerY1 <br /> Location Preceding Action Attachments Department(s)Approval <br /> (2.24.09)Resolution.Re:New Markets Tax Credits Resolution Public Works,Legal,Admin <br /> (11.18.09)Authorize Mayor to Sign Allocation Agreement <br /> (8.1.12)Resolution Re:Expansion <br /> (4.17.13)Resolution Re:Hampton Inn <br /> Amount Budgeted -0- <br /> Expenditure Required -0- <br /> Budget Remaining -0- <br /> Additional Required -0- <br /> DETAILED SUMMARY STATEMENT: <br /> In November 2009, the City received $25 million in New Markets Tax Credits from the U.S. Treasury to foster, <br /> private business and development. Because of the timeframes for use of the tax credits,it is advantageous to the City's <br /> eligibility for future allocations if the City can deploy the entire$25 million to projects by the end of 2013. <br /> On April 17,2013,the City Council by resolution authorized the Mayor to deploy$12,000,000 to the Hampton Inn <br /> project,which is currently under construction at the corner of Wetmore and West Marine View Drive. The hotel will <br /> be an extended-stay concept, mostly catering to Navy families. (This is in contrast to the more business oriented <br /> Marriott project to be built by Touchstone at the corner of Wall and Colby.) This deployment is moving along and <br /> should close by the end of December 2013. <br /> While the City has continued to reach out to the community in an effort to deploy the remainder of the allocation, <br /> the City has been unable to secure interest in the timely use of the remaining $13,000,000. However, the City was <br /> recently approached by Whidbey Island Bank with a proposal to use this remainder for small business loans. In <br /> essence, the funds generated from the tax credits will allow the bank to market lower-than-market rate loans to small <br /> businesses. This is a nationally well-accepted,but underutilized,method of using the tax credits. The bank marketing <br /> effort would make businesses in Everett first priority for receiving the loans,with businesses elsewhere in Snohomish <br /> County second priority. This prioritization is necessary because, under the tax credit rules, the loans will probably <br /> need to be placed in year 2014; meaning that there would be a need to look beyond Everett if it began to appear that <br /> the 2014 deadline would be missed. <br /> This resolution gives the Mayor the authority to take all actions necessary to deploy the New Markets Tax Credits <br /> to Whidbey Island Bank loan project. The resolution also states that, if the Hampton Inn project does not proceed to <br /> close on its New Market Tax Credits allocation by the end of 2013 as required,the Mayor may deploy the entire $25 <br /> million to Whidbey Island Bank loan project. <br /> RECOMMENDATION(Exact action requested of Council): <br /> Adopt a Resolution Concerning Deployment of City of Everett CDE LLC New Markets Tax Credit <br /> Allocation. <br /> 5 <br />