bolton green pro forma project summary oct 10, 2011

8/3/2019 Bolton Green Pro Forma Project Summary Oct 10, 2011

1/9

DATE: October 10, 2011

SUBJECT: Bolton Green Project Summary, Seventh Revision October 10, 2011

Partners for Planning, a citizens task group that is exploring solutions for the contaminated Smith garageproperty in the center of town (715-723 Main Street), proposes that the town purchase the 8.3-acre site, cleanup the contamination, and implement a redevelopment plan. Purchase of this site is a unique opportunity to

control what is built at this keystone location and to leverage many benefits only available to municipalities forredevelopment projects such as this.

The proposal features the creation of a Town Green and the building of market rate and affordable housingon the currently blighted site. The proposal requires an investment by the town that, unlike many townexpenditures, has a direct economic benefit with few ongoing operational expenses. Because the plan involveshousing that will generate property and excise taxes, the project will produce a positive cash flow by year 7and a complete payback by year 13. Over 20 years, the project will generate a significant positive cashcontribution to the town, while permanently enhancing the beauty, character, and use of the town center.


2/9

The result is an attractive and functional solution that will have a positive impact on property values,contribute to tax revenue, clean up a contaminated site, and create a vibrant new center in the heart of the

town. What more perfect place is there for a long-desired Town Green than in the very heart of the town?To implement this project, we propose that a Bolton Town GreenDevelopment Commission be established by the Board of Selectmen. ThisCommission will manage the project, including approving the design of thesite, applying for grants, selecting developers and contractors, and approvingexpenditures in a manner similar to that of the construction of other Townprojects.

The total project cost to the Town is expected to be $565,000. A sum of

$125,000 will be transferred from the Affordable Housing Trust, whichresults in the request to authorize borrowing up to $440,000 to fund theproject. Grants will total an expected $232,400 to fund the clean up. Thegrant assumptions have been rigorously vetted and funding agencies couldprovide additional grants of over $800,000, if necessary. Even with theaddition of $440,000 of borrowing for Bolton Town Green, town debt willstill decrease every year from $16.7 million in 2012 to $10.9 million in 2016.Free cash has been certified for 2012 and is $400,000 greater than the budgetof $500,000 indicating the Towns financial condition is stable.

Tax revenues (property and excise taxes) received from the housing are projected to be $81,000 at occupancyand will exceed the present property taxes of $14,000. Over 20 years, this project will generate a positive cashflow of $411,000 at a NPV of 3%. Tax receipts will exceed costs and the investment will have an IRRprojected to be 16%. An average single family home assessed at $455,800 with taxes of $8,852 will experiencea increased taxes of $71 for the first five years, $14 per year average tax increase for 5 years. The same singlefamily home will experience a contribution to tax revenue of $370 over 20 years or $18 per year over 20 years.Breakeven occurs in year 2014. Due to the financing strategy suggested by Bond Counsel, the FY2012 townbudget will increase by less than $1,000 and the FY2013 budget will increase by less than $3,000.

Town of Bolton Federal State and Local

Bolton Green Project Summary10-Oct-11


3/9

GRANT AND LOAN PROGRAMS FOR BOLTON GREEN

MASS DEVELOPMENTBrownfields Site Assessment Program provides grants and unsecured, interest-free financing up to $100,000 forassessment. Bolton will submit an application for this program in Q4 of 2011 to cover the cost of the Phase II review of thesite. An applicant must have site control (P&S Agreement) to submit an application.

Brownfields Remediation Loan Program provides grants and flexible loans up to $500,000 for environmental clean-up.Bolton would submit an application for this program in Q3 of 2012 to cover the cost of the clean up of the site.MassDevelopment has indicated this project is eligible for the site assessment program and the remediation program.

US EPA Brownfields Cleanup Grants

Cleanup grants provide funding for a grant recipient to carry out cleanup activities at brownfield sites. An eligible entity mayapply for up to $200,000 per site ($400,000 for the two sites on the Smith property). Funds may be used to address sitescontaminated by petroleum and hazardous substances, pollutants, or contaminants. Cleanup grants require a 20 percent costshare for eligible and allowable costs and cannot include administrative costs. An applicant must own the site for which it isrequesting funding at time of application. This is a complimentary program to MassDevelopment and Bolton could apply toboth programs.

Parkland Acquisitions and Renovations for Communities (PARC) Program

The FY12 PARC Grant Round to assist cities and towns in acquiring and developing land for park and outdoor recreationpurposes. Communities that do not meet the population criteria (35,000) may still qualify under the "small town," "regional," or

"statewide" project provisions of the program. Only projects that are to be developed for suitable outdoor recreation purposes,whether active or passive in nature, shall be considered for funding. Grants are available for the acquisition of land and theconstruction, or renovation of park and outdoor recreation facilities. Access by the general public is required.

Business Development Corp of New EnglandBrownfields Redevelopment Access to Capital Program (BRAC)BRAC is administered by the Business DevelopmentCorporation of New England and offers low-cost, often state-subsidized, environmental insurance to help mitigate riskassociated with brownfields redevelopment. Insurance for unknowns is $100K and grants of $50k are available.
http://www.mass-business.com/site/site-massbiz/content/brownfields/http://www.mass-business.com/site/site-massbiz/content/brownfields/


4/9

Bolton Green Long Term Schedule

2012 2013 2014 2015

Apply for Grants

Phase IISupplement

Phase IIIEvaluate Alternatives

2016

Phase IVRemediation (Cleanup)

Construct Housing

Occupy Housing

2012 Bolton Green Road Map

Closing Dec 30, 2011

ASTM Phase I

2 wks, $2.5K

Supplement Phase IIRetest Contamination3-4 Months, $25K to $50K

Phase III

Evaluate Alternatives2 mo $25K

Phase IV

Remediation2 -3 yrs $200K

October 2012


5/9


6/9Biz Model for Smith Property Oct 10.xls

Bolton Town Green Cash Flow 10-Oct-11

Most Likely Scenario Cleanup Funded by State and Federal Grants Revision --Seven

Town of Bolton Federal, State and LocalBolton Project Expenses Federal, State and Local Expenses

Purchase Land from Smith 230,000$ LSP Phase I 50,000$

ASTM Phase I Evaluation 2,500$ Brownfie ld Site Clean up 175,000$

Demolition 65,000$ Partners for Planning Expenses 7,400$

Site Work 15,000$ Total Federal and State Expenses 232,400$

Brownfield Insurance 100,000$

Project Expenses to Implement Plan 97,000$ Federal, State and Local Grants

Contingency 55,500$ MassDev Site Assessment 50,000$ High Confidence, Max $100,000

Bolton Direct Project Expenses 565,000$ Mass Dev Remediation Loan/Grant 175,000$ High Confidence, Max $500,000

EPA Grant -$ Max $400,000

Sources of Bolton Funds Par tners for Planning Donat ions 7,400$ Complete

Transfer from Affordable Housing Trust 125,000$ Total Grants 232,400$

Borrowing Request from Town Meeting 440,000$

Total Sources of Bolton Funds 565,000$ Other Grants Available if Needed 870,000$

Bolton Green Cash Flow after Property Tax Receipts

Financing Cost

2012 Cost (968)$

2013 Cost (2,948)$

2014 Cost (24,290)$

Cash Flow

Payback Yr 2024

IRR 16%

NPV Cash Flow $411,000

Borrowing

Requested 440,000$

2012 2013 2014 2015 2016 2017 2018 2019

Total Cash Flow from Taxes ($13,157) ($13,486) ($13,823) ($14,169) $3,357 $70,568 $72,332 $74,140

Total Cash Flow after Financing ($14,125) ($16,433) ($38,113) ($41,913) ($27,035) ($404) $1,043 $4,436

($60,000)

($40,000)

($20,000)

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Bolton Green Cash Flow

Total Cash Flow from Taxes

Total Cash Flow after Financing


7/9Biz Model for Smith Property Oct 10.xls


Taxes per Average Single Family Home (After Property Tax Receipts)

Total Tax Payments

A verage Tax Bi ll $8,852

Average Valuation $455,800

Taxes Paid in f irst 5 yrs ($71)

Taxes Rreduced over 20 yrs $370

Breakeven in Yr 12

Average Tax Bill (After Tax Receipts)

A verage Tax Bi ll $8,852


5 year Average Tax / SFH ($14)

20 year Average Revenue/ SFH $18

2012 2013 2014 2015 2016 2017 2018 2019

Average Incremental Tax per SFH $7 $8 $20 $22 $14 $0 ($1) ($2)

Status of P&I and Town Debt

2012 2013 2014 2015 2016 2017 2018 2019

Town Princ ipal & Interest 2 ,249,545$ 2,172,790$ 2,115,580$ 2,058,403$ 1,963,894$ 1,886,206$ 1,749,525$ 1,189,319$

Bolton Green Principal & Interest 968$ 2,948$ 24,290$ 27,744$ 30,392$ 70,972$ 71,289$ 69,705$

Total P&I ( includ ing Bolton Green) 2,250,513$ 2,175,738$ 2,139,870$ 2,086,147$ 1,994,286$ 1,957,178$ 1,820,814$ 1,259,023$

2012 2013 2014 2015 2016 2017 2018 2019

Town Debt 16,688,514$ 15,132,949$ 13,582,384$ 12,036,819$ 10,533,000$ 9,055,000$ 7,660,000$ 6,770,000$

Bolton Green Debt 193,500$ 294,750$ 347,000$ 382,150$ 402,549$ 380,207$ 316,839$ 253,471$

Total Debt (including Bolton Green) 16,882,014$ 15,427,699$ 13,929,384$ 12,418,969$ 10,935,549$ 9,435,207$ 7,976,839$ 7,023,471$

$-

$100,000

$200,000

$300,000

$400,000

$500,000

2012 2014 2016 2018

Average Bolton Green Debt

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

2012 2014 2016 2018

Bolton Green Debt

Town Debt

Total Town Debt

$-

$20,000

$40,000

$60,000

$80,000

2012 2014 2016 2018

Bolton Green Principal & Interest Payments

$1,000,000

$1,500,000

$2,000,000

$2,500,000

2012 2014 2016 2018

Bolton Green

Principal &

Interest

Town Principal

& Interest

Total Town Principal & Interest Payments

($60)

($50)

($40)

($30)

($20)

($10)

$0

$10

$20

$30

2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Bolton Green Taxes per Average Single Family Home

Reduction in Taxes

Increase in Taxes


8/9

Biz Model for Smith Property Oct 10.xls


Purchase Apply Grants Build out Occupancy

Federal, State and Local Cash Flow Summary Total Note 2012 2013 2014 2015 2016 2017 Total

Federal, State and Local ExpensesLSP Phase I (50,000)$ (50,000)$ -$ -$ -$ -$ -$ (50,000)$

Brownfield Site Clean up (175,000)$ -$ (157,500)$ (17,500)$ -$ -$ -$ (175,000)$Partners for P lanning Expenses (7,400)$ (7,358)$ -$ -$ -$ -$ -$ (7,400)$

Total Federal and State Expenses (232,400)$ (57,358)$ (157,500)$ (17,500)$ -$ -$ -$ (232,400)$

Federal, State and Local GrantsMassDev Site Assessment 100,000$ 50,000$ -$ -$ -$ -$ -$ 50,000$

Mass Dev Remediation Loan/Grant 500,000$ -$ 157,500$ 17,500$ -$ -$ -$ 175,000$EPA Grant 400,000$ -$

Parkland and Renovation (PARC) 25,000$ -$ -$ -$ -$ 25,000$ -$ 25,000$Brownfield Insurance (BRAC) 50,000$ -$ 50,000$ -$ -$ -$ -$ 50,000$

Partners for Planning Donations 7,400$ 7,358$ -$ -$ -$ -$ -$ 7,400$

Private Donations 20,000$ -$ 20,000$ -$ -$ -$ -$ 20,000$Total Federal and State Grants Available 1,102,400$ 57,358$ 227,500$ 17,500$ -$ 25,000$ -$ 327,400$

Bolton Cash Flow SummaryPurchase Land from Smith (230,000)$ (230,000)$ -$ -$ -$ -$ (230,000)$ASTM Phase I Evaluation (2,500)$ (2,500)$ -$ -$ -$ -$ (2,500)$

Demolition (65,000)$ -$ -$ (65,000)$ -$ -$ -$ (65,000)$Site Work (15,000)$ -$ (15,000)$ -$ -$ -$ (15,000)$

Brownfield Insurance (100,000)$ -$ (100,000)$ -$ -$ -$ (100,000)$

Project Expenses to Implement Plan (97,000)$ (27,000)$ (11,000)$ (20,500)$ (29,000)$ (9,500)$ (97,000)$Contingency (55,500)$ 2,000$ 4,000$ 5,000$ 5,000$ (71,500)$ -$ (55,500)$

Bolton Direct Project Expenses (565,000)$ ($257,500) ($122,000) ($80,500) ($24,000) ($81,000) $0 (565,000)$

Transfer from Affordable Housing Trust 125,000$ 125,000$ -$ -$ -$ -$ -$ 125,000$Net Cash Flow to Town (440,000)$ (132,500)$ (122,000)$ (80,500)$ (24,000)$ (81,000)$ -$ (440,000)$

Borrowing Request from Town Meeting (440,000)$

Cash Flow from Taxes and Permits Total Note 2012 2013 2014 2015 2016 2017 TotalTime Frame (yrs occupancy) 20

Excise Tax 2.50% 9,180$ 403,000$RE Taxes for Condo units 2.50% 76,274$ 3,348,600$

Building Permits 2.50% 17,880$ 17,900$Loss of Tax Payments from Smith 2.50% (13,157)$ (13,486)$ (13,823)$ (14,169)$ (14,523)$ (14,886)$ (722,700)$

Total Cash Flow from Taxes 1,751,400$ (13,157)$ (13,486)$ (13,823)$ (14,169)$ 3,357$ 70,568$ 1,751,400$NPV of Cash Flow after Financing (20 yr, 3%) 1,081,000$ 3%

Clean up


9/9

Biz Model for Smith Property Oct 10.xls


Interest and Principal Payments on Borrowing

Interest and Principal Payments Total Note 2012 2013 2014 2015 2016 2017 Total

Total Borrowing Requested from Town Meeting (440,000)$

Bolton Direct Project Expenses (565,000)$ (257,500)$ (122,000)$ (80,500)$ (24,000)$ (81,000)$ -$ (565,000)$

Transfer from Affordable Housing Trust 125,000$ 125,000$ -$ -$ -$ -$ -$ 125,000$

Net Cash Flow to Town (440,000)$ (132,500)$ (122,000)$ (80,500)$ (24,000)$ (81,000)$ -$ (440,000)$

Averge Cumlative Bolton Green Borrowing FY (193,500)$ (294,750)$ (347,000)$ (382,150)$ (402,549)$ (380,207)$ (2,950,700)$State House Note Interest Rate 0.5% 1% 2% 2% 2% 2.0% -$

Interest FY (968)$ (2,948)$ (6,940)$ (7,643)$ (8,051)$ (7,604)$ (57,900)$

Principal Payment % 0.00% 0.00% 5.00% 5.26% 5.55% 16.67% -$

Principal Payment Amount -$ -$ (17,350)$ (20,101)$ (22,341)$ (63,368)$ (440,000)$

Total Interest and Principal Payments (497,900)$ (968)$ (2,948)$ (24,290)$ (27,744)$ (30,392)$ (70,972)$ (497,900)$

Cash Flow After Financing Total Note 2012 2013 2014 2015 2016 2017 Total

Time Frame 11BAN Payment (968)$ (2,948)$ (24,290)$ (27,744)$ (30,392)$ (70,972)$ (497,900)$

Total Cash Flow after Financing (497,900)$ (968)$ (2,948)$ (24,290)$ (27,744)$ (30,392)$ (70,972)$ (497,900)$

NPV of Cash Flow after Financing (20 yr, 3%) (398,000)$ 3%

Impact on Average Tax Bill before Tax Receipts 2012 2013 2014 2015 2016 2017 Total

Total Cash Flow after Financing ($497,900) (968)$ ($2,948) ($24,290) ($27,744) ($30,392) ($70,972) ($497,900)Average Tax Bill $8,852


Number of SFH (per Assessors) 1,569

% Taxes allocated to SFH 81%

Average Incremental Tax per SFH ($0.50) ($1.52) ($12.54) ($14.32) ($15.69) ($36.64) ($257.04)

5 year Average Incremental Tax Cost/ SFH ($9)

11 year Average Inc remental Tax Cos t/ SFH ($23)

Cash Flow After Financing and Taxes Total Note 2012 2013 2014 2015 2016 2017 Total

Time Frame 20Total Cash Flow from Taxes (13,157)$ (13,486)$ (13,823)$ (14,169)$ 3,357$ 70,568$ 1,751,400$

Total Interest and Principal Payments (968)$ (2,948)$ (24,290)$ (27,744)$ (30,392)$ (70,972)$ (497,900)$

Total Cash Flow after Financing 716,200$ (14,125)$ (16,433)$ (38,113)$ (41,913)$ (27,035)$ (404)$ 716,200$Internal Rate of Return after Financing (IRR) 16%

NPV of Cash Flow after Financing (20 yr, 3%) 411,000$ 3%Cum Cash Flow after Taxes (14,125)$ (30,558)$ (68,671)$ (110,584)$ (137,619)$ (138,023)$ 12,691,300$

Payback after Financing and Taxes (Year) 2024

Impact on Average Tax Bill after Tax Receipts 2012 2013 2014 2015 2016 2017 Total

Total Cash Flow after Taxes and Financing $716,200 ($14,125) ($16,433) ($38,113) ($41,913) ($27,035) ($404) $716,200

Average Tax Bill $8,852Average Valuat ion $455,800

Number of SFH (per Assessors) 1,569% Taxes allocated to SFH 81%

Average Incremental Tax per SFH ($7.29) ($8.48) ($19.68) ($21.64) ($13.96) ($0.21) $369.745 year Average Incremental Tax Increase/ SFH ($14) ($71)

20 year Average Incremental Tax Decrease/ SFH $18 $370

bolton green pro forma project summary oct 10, 2011

Documents