RMI2 seeking financing

Coloradoan
DAVID YOUNG
http://www.coloradoan.com/article/20090505/BUSINESS/905050308/1046/rss03


After several months' delay to get details in place, the Rocky Mountain Innovation Initiative, or RMI2, will bring plans to support a new 31,000-square-foot, four-story building with tax increment financing to City Council tonight.
RMI2, a regional non-profit organization designed to accelerate the success of scientific and technology startup companies in Northern Colorado, will ask the city for $2.8 million in tax-increment financing, or TIF, for its new office building for startup companies.
The new RMI2 facility, to be located on Vine Drive north of Old Town in an urban-renewal authority area, which makes it eligible for TIF, will consolidate its nine technology companies into one location. State law allows an urban-renewal authority to retain property taxes generated within a specific area above a base amount. The funding tool, known as tax-increment financing, must be used for public improvements in the urban-renewal area.

RMI2 has helped draw such startup companies as Symbios Technologies, Ger-many-based Wirsol Solar AG and Sprig Toys to Fort Collins.
Mike Freeman, the city's chief financial officer, said the building will provide RMI2 room to expand and help contribute to the synergy between companies.

"There is no question council supports RMII, no question there," said Free-man, speaking of the pending council meeting. "I think that supporting the building and the proposal is something different. That's the URA and board's decision."
The $7.1 million project will be funded by two components: a $5.3 million city loan to the URA for construction and development, and $1.8 million in new market tax credits and equity offered through the stimulus package.

Freeman said the federally authorized new market tax credits and equity funds were obtained about six weeks ago after an extensive qualifying process.

Once the building is constructed, the $2.8 million in TIF goes back to the city. After seven years, the $1.8 million in new market tax credits and equity will be utilized, and the $2.5 million in debt remaining could be restructured, Freeman said. Then, based on a 2.5 percent interest rate over a 20-year term - the loan will be repaid through tenant leases.