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August 14, 2006 (Recessed Meeting) Page 39 Medicine and NorthEast Medical Center; Laboratory Corporation of America, {LabCorp) will have a significant presence on the campus; there will be nearly one million square feet of laboratory and office space to support all sizes and types of new companies; retail and apartments on the main campus; a 120 room full-service hotel and adjacent wellness center; townhomes; parking structure(s); and a cinema. Construation Schedule Tom Sanctis, Vice President of Commercial Construction, reviewed the construction schedule. Highlights included the following: the Core Lab Building will be completed in November 2007; structural steel has been purchased for the Central Energy Plant, the UNC-Chapel Hill building and the Duke University building; structural steel will be purchased next week for N.C. State building; pad preparation for the Duke building will begin in October; construction of the parking structure in the retail and apartments area will begin next year; construction for the parking structures that will support the academic buildings will start by the end of this year; and construction on the medical office building will begin at the end of this year or the beginning of next year. Master Plan Ray Waugh of Land Design, the Architect for the NCRC project, briefly reviewed the following plans for the research campus: the Master Plan, Stream Restoration and Greenway Construction Plan, Water Re°use and Irrigation Plan, the Intersection Transportation Improvement Plan, the Parking Structure Plan, Roadway and Utility Improvements. Vertical Construction Plan Summary ~ Infrsstruaturo Plan Summary Mike Legg, Kannapolis City Manager, reviewed the Vertical Construction Plan Summary. He reported construction costs are estimated at $391 million in 2007 which includes $28 million for two major parking decks (2,500 spaces), $190 million for the Core Lab building and equipment, and $166 million for the UNC, Duke, NCSU buildings and one unnamed building. Construction costs for 2006 and 2009 were projected at $203.2 and $355 million respectively. He said the vertical construction is estimated at $1.25 billion for 2007 - 2012 and the project will contain 5.5 million square feet of office, retail and residential space, 1,100 dwelling units, 18 parking decks and almost a million square feet of office space for lease. He estimated the total infrastructure costs to be $352 million which included the following: $48.7 million for off--site improvements, $112.9 million for on-site improvements and $165.5 million for parking deck construction. He said a portion of the $352 million will constitute the City's and County's financial participation. Mr. Legg opened the floor for questions regarding infrastructure. After responding to several questions on the proposed bond issue and tax base, he reported a number of alternative funding sources have been secured including $1.7 million from the U.S. Congress and $950,000.00 from N. C. Department of Transportation. Finally, he said other alternative funding sources will be pursued including Federal, State and private grants. Tax Inarement Finanain (g TIF) After the construction plan summary, Mr. Legg turned the meeting over to Eddie Smith, Kannapolis Assistant City Manager, for an explanation of terms commonly used in Tax Increment Financing (TIF). He reviewed terms such as: base value, incremental value, base tax revenue, incremental tax revenue, etc. Mr. Smith also reviewed the Self Financing Bond District. He reported the district cannot be larger than 5 percent of the total area or 1,007 acres. He also presented the latest map of the proposed district and said a majority of the district focuses on the corridors leading into the NCRC site. Key Issues Mike Legg, Kannapolis City Manager, addressed the following key issues: {1) How much incremental tax revenue will the City and the County earn from the project? He reported the City will earn approximately $5.5 million and the County will earn. approximately $7 million in incremental tax revenues based on a two percent growth factor. He estimated the combined total projected new incremental tax revenues to be approximately $260 million over a 20-year period. (2) How large will the bond issue be and what will the annual debt service costs be? He reported the projections for property values on new buildings and equipment were provided by Castle & Cooke, Inc.;