2007-10-10 Appropriation Committee Report

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APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM b) The tax revenue equals that in (a) + 20 %. This illustrates the impact of higher tax revenues; c) The tax revenue equals that in (a) - 20 %. This illustrates the impact of lower tax revenues; d) The tax revenue equals that in (a) - 40 %. This illustrates the impact of even lower tax revenues. 2) TIF is turned down, but Shire follows projected build -out anyway. Four scenarios, as described above, but the tax revenues to be received by the Town are not diminished by a TIF, and there are no mitigation payments. 3) TIF is turned down; after a one -year delay another tenant comes forward without a TIF and executes a build -out plan similar to Shire's full build -out plan. Four scenarios present the impact of a one -year delay on the build -out schedule and thereby on tax revenues, assume that no mitigation payments would be received, but otherwise follow the assumptions described under (1). 4) TIF is turned down; after a two -year delay another tenant comes forward without a TIF and executes a build -out plan similar to Shire's full build -out plan. The four scenarios are like those in (3) except that a two -year delay is assumed. 5) TIF is turned down; after a four -year delay another tenant comes forward without a TIF and executes a build -out plan similar to Shire's full build -out plan. The four scenarios are like those in (3) except that a four -year delay is assumed. 6) TIF is turned down; no other tenant comes forward to build out parcels 200 and 400. The four scenarios adopt the assumptions in (1) above regarding the building at 300 Patriot Way, but do NOT include any new tax revenue from buildings at 200 and 400 Patriot Way. No mitigation payments are assumed. The bottom lines of these scenarios are summarized in the matrix below, where we show FY 2009 net present values (computed using a 5% deflator) of the totals of property tax and mitigation revenues (in millions of dollars) the Town might receive during the 20 -year period FY09 — FY28 for the 200, 300, and 400 parcels at Lexington Technology Park. We emphasize that these figures are intended to show the relative impacts of the various scenarios on Town revenues using reasonable assumptions in regard to tax rates and property values. Given that actual property values and their changes over a 20 -year period are highly uncertain, one should NOT regard these numbers as projections. Scenarios for NPV @ 5 %, in million $$ development of parcels 200, 300 & 400 a) 100% b) 120% c) 80 d) 60% 1 Now, w /TIF $30.79 $36.40 $25.17 $19.55 2 Now, no TIF $33.65 $40.38 $26.92 $20.19 3 1 yr delay, no TIF $32.45 $38.94 $25.96 $19.47 4 2 yr delay, no TIF $30.92 $37.11 $24.74 $18.55 5 4 yr delay, no TIF $28.11 $33.73 $22.49 $17.03 6 300 only, no TIF $16.10 $19.32 $12.88 $9.66 The numbers in row (1) represent the scenarios that might follow if the TIF is approved under Article 2 while the numbers in the other rows represent other possible outcomes. The numbers in row (2) are higher Page 6 of 18