6. EDSR 06-17-2013 - Laserfiche WebLink

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Memo Clay Wilfahrt—Assistant Director of Economic Development From; Mark Ruff- Ehlers l x ; June 13, 2013 Subject: Preferred Powder Coating—Tax Abatement Request Preferred Powder Coating is proposing to purchase approximately 10.36 acres of land from the City and construct a new 100,000 square foot manufacturing facility on the site. They have requested $1,153,878 in the form of a land write down ($680,895) and additional assistance ($472,983) through a City/County tax abatement. You have requested that we review the project to determine what level of assistance is appropriate for the project. We have assumed that the City and County would only abate the taxes generated from the construction of the building and not the existing land, as has been the past practice of the City. We prepared tax abatement runs for the project with the following assumptions: 1. The City and County will abate the increased taxes from the new development (new building value only, land value is not abated) for up to a 12 year term. 2. Base value of land is approximately $815,900 per the County Assessor. 3. Value of the land and building after completion is approximately $5 million ($50 per s.f. of building for assessor's market value). 4. No inflation in value assumed over the term of the abatement. Based upon these assumptions, the annual tax abatement generated is as follows: City $41,775 County $45,132 Total $86,907 Based upon this, the total abatement estimated to be generated over the twelve (12) year term is $1,042,083 which is approximately $111,000 less than what the developer has requested, without factoring in interest to the calculations. v M.ehiers-inc.ccm E H L E RS Minnesota phone 651-697-8500 3060 Centre Pointe Drive LEADERS IN PUBLIC FINANCE Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville,MN 55113-1122 toll free 800-552-1171