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City of Elk River, Minnesota
<br />Preferred Powder Coating request for Tax Abatement
<br />June 20, 2013
<br />Page 5
<br />Scenario 2: All Project Costs with Reduced Land Acquisition to $1
<br />Project Costs
<br />Total host
<br />Sources of 'f=unds
<br />Total Sources
<br />Land Acquisition
<br />* *$1
<br />Private Equity
<br />$191,817
<br />Site Development (site prep, wetland
<br />mitigation, grading, gasoline, 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 />$5,511,801
<br />Total Sources
<br />$5,038,817
<br />* *includes assumption of land write down
<br />Funding Gap = $472,984
<br />Scenario 3: All Project Costs with Reduced Land Acquisition to $1 and Reduced Site Development costs
<br />Project Costs
<br />Total Cost
<br />Sources of Funds
<br />Total Sources
<br />Land Acquisition
<br />* *$1
<br />Private Equity
<br />$191,817
<br />Site Development (site prep, wetland
<br />mitigation, grading, gasoline, etc.
<br />* *157,016
<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 />$5,038,817
<br />Total Sources
<br />$5,038,817
<br />* *includes assumption of land write down and reduction in site development costs
<br />Funding Gap = $0
<br />The purpose of providing the multiple financing scenarios outlined above is to show that the funding gap is created
<br />from a combination of acquisition and site development costs that are not supported by the operating revenues of the
<br />project — thus limiting the amount of debt that could be obtained.
<br />Developer Proforma "But For" Anal
<br />In approving an abatement project the Elk River EDA has requested that a finding be made that the proposed
<br />development would not reasonably be expected to occur solely through private investment within the reasonably
<br />foreseeable future, The three scenarios outlined above illustrate that a funding gap exists between estimated costs
<br />of the project and the available sources of funds, The funding gap would have to be filled through an increase in
<br />debt obtained, equity contribution, a reduction in site costs, financial (abatement) assistance, or some combination
<br />of all, or the project would not proceed, Based on this analysis, the EDA could be justified in determining that the
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