1	"A Successful Development Project" A Successful Development Project in cooperation with the Town of Derry, NH
2	Starting Point On March 30, 2003, John and Ed Cooper sell property to the Town of Derry. Current Zoning – Medium High Density Residential (MHDR)
3	Project Goals To develop the property on Ash Street to its Highest and best use for Commercial & Industrial development Minimize impact of development on taxpayers Have property contribute toward the tax base Create Jobs
4	What was the current plan for this property? Residential Development Planned Apartment Complex (207 – 2 bedroom Apt’s)
5	What would this mean to the town? Residential Development Increased property value & tax revenue Additional Students for school system Possibly meaning building and maintaining a new school Increased impact on community services A net loss in tax revenue for the town, costing taxpayers
6	What was the alternative? Business/Commercial Development Increased property value & tax revenue No additional burden for the town An actual net gain for the town in tax revenue, benefitting taxpayers Increase in jobs
7	The Business Plan Town of Derry purchases the property from the Coopers. Rezone the property to General Industrial II Subdivide into 4 or 5 lots Make each lot “Pad ready” Derry Economic Development Corp will market the property to businesses
8	How did the finances work?? The Town purchased the property for $1 Million The town paid $100,000 for Engineering and Legal Fees The property was divided into 4 parcels and improved to it’s highest and best use for business development at an additional cost of $2 Million This included Water/Sewer, Electric, Cable and Natural Gas.
9	How was all this paid for?? The Funds were available to purchase the property from unfunded balance and did not impact the tax rate The $100,000 was also paid from unfunded balance and did not impact the tax rate A low interest (TIF) Bond for $2 Million was used to pay for the improvements The town will pay the “interest only” required of the bond during the first 60 months until increase in tax revenue covers this interest cost
10	How did the town recoup its investment The Derry Economic Development Corp guaranteed that when the 4 lots were sold within a 5 year period (for more than $1.1 Million) the town will recoup its $1.1 Million investment If the lots are not sold, the Derry Economic Development Corp would be responsible to make up the difference, guaranteeing the town is reimbursed it’s $1.1 Million. The $100,000 was repaid to the town from the $2 Million bond for improvements if the lots were not sold within the first 5 yrs.
11	Who coordinated the effort? Derry Economic Development Corp served as Project Managers Responsibilities include: Marketing and Sale of Properties Overseeing Improvements Coordinate engineering Coordinating Bonding with Town Coordinate and present plan to Town Council The Derry Economic Development Corp. received payment of the amount of the sale exceeding $1.1 Million, when and only if the 4 lots sold for more than $1.1 Million
12	How was the $2 Million in improvements funded? Borrow the $2 Million (In the form of a low interest 20 Year Bond) Pay it back using a special state program known as Tax Increment Financing (TIF) A TIF uses the increase in tax revenue resulting from the property improvements to pay back the loan used to make those improvements. Note: A special feature of a TIF project is that you do not start paying back the principal (Bond) until 5 years after you borrow the money
13	The TIF Numbers Property was in “Current Use” generating less than $1000 in annual tax revenue Anticipated Tax revenue as of 4/1/2008 = $196,000 Revenue available for TIF = $195,000/year After the first 60 months, $128,000/year will be used to make payments on the $2 million dollar bond
14	The Ash Street Facts Property was purchased by the Town of Derry Property sales were completed in the 33rd month of the project. This is ahead of schedule in repaying the town its original $1.1 Million investment and compensating the Derry Economic Development Corp Tax Revenue exceeded expectations Bond will be able to be paid within 16 or 17 years In year 16 or 17 the additional Tax revenue (approx. $200,000+) will directly benefit the town’s bottom line Additional 250+ Jobs were created Additional tax burden expected from original planned usage was avoided
15	Net to Derry Taxpayer No additional Tax Burden during the process An actual anticipated contribution to Derry’s budget beginning in 2017 of $200,000+ each year!
16	The new Derry businesses Nel Tech Seven Hills Development Mutual Sales Derry Business Center (4 business condos) Etc…