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City of Elk River, Minnesota
<br />Preferred Powder Coating request for Tax Abatement
<br />June 20, 2013
<br />Page 4
<br />Tax Abatement Revenue Estimates
<br />Preferred Powder Coating
<br />City! 'ounty Participation
<br />Sources of Funds
<br />Total Sources
<br />Anticipated Term
<br />20 years
<br />(Statutory Maximum)
<br />Private Equity
<br />$191,817
<br />City Share of Revenues
<br />$776,752
<br />County Share of Revenues
<br />$839,156
<br />School District Share of Revenues
<br />$0
<br />Estimated Net Revenue
<br />$1,615,908
<br />Machinery & Equipment
<br />1,000,000
<br />Total Estimated Present Value of Revenues
<br />(4% discount rate and 8/1113 date)
<br />$1,048,925
<br />Total Estimated Present Value of Revenues
<br />(3 % discount rate and 8/1/13 date)
<br />$1,161,286
<br />Total Estimated Present Value of Revenues
<br />(2% discount rate and 8/1/13 date)
<br />$1,290,949
<br />`These are estimates and subject to verification
<br />The maximum abatement, based on the assumptions outlined above would generate $1,615,908 with City and
<br />County participation over 20 years. Participation by any taxing entity is subject to policy and approval,
<br />Sources of Funds and Project Cost Scenarios
<br />The Developer's submittal includes a preliminary total project budget of $6,192,695 that includes land acquisition, site
<br />development, building construction, equipment, working capital, wetland mitigation and soft costs as shown in the
<br />following table.
<br />Scenario 1: All Costs and Secured Financing
<br />Project Costs
<br />Total Cost
<br />Sources of Funds
<br />Total Sources
<br />Land Acquisition
<br />$680,895
<br />Private Equity
<br />$191,817
<br />Site Development (site prep, wetland
<br />mitigation, grading, gas line, etc,)
<br />630,000
<br />Private Financing
<br />4,547,000
<br />Building Construction
<br />3,470,000
<br />EDA Forgivable Loan
<br />200,000
<br />Machinery & Equipment
<br />1,000,000
<br />EDA Micro Loan
<br />100,000
<br />Working Capital
<br />200,000
<br />Wetland Mitigation
<br />11,800
<br />Contingencies
<br />200,000
<br />Total Costs
<br />$6,192,695
<br />Total Sources
<br />$5,038,817
<br />Funding Gap = $1,153,878
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