Council Action Requested:
K2 Lancaster and Cooley intend to effectuate a sale leaseback transaction with FIP Master Funding VIII, LP regarding the real property at the project. They will be assigning the Fee in Lieu of Tax (FILOT) and Special Source Revenue Credit (SSRC) agreement over to the new buyer with respect to the real property.
Points to Consider:
The County and Cooley entered into an economic development agreement on December 14, 2020. The agreement for their property on Quality Drive includes:
The Agreement provided for a minimum investment of $2,500,000 over a Twenty (20) year period with a 6% Assessment ratio applicable for each year of the Agreement and a Millage rate applicable for each year of 338.15 mills, except as otherwise provided in the Agreement.
Special Source Revenue Credits shall be provided for the Economic Development Property in amounts equal to fifty-eight percent (58%) of Negotiated FILOT Payments for seven (7) consecutive years beginning not later than with the Negotiated FILOT Payment due without penalty by January 15, 2022 and ending not later than with the Negotiated FILOT Payment due without penalty by January 15, 2028;
Payment will not be modified using a net present value calculation; and Replacement property provisions will apply.
Funding and Liability Factors:
Their is no funding impact, as the FILOT and SSRC remain the same, only the company name is changing.
Recommendation:
Recommend Council approve assignment of FILOT and SSRC agreement to the new buyer.