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City of Elk River, Minnesota <br />Preferred Powder Coating request for Tax Abatement <br />June 20, 2013 <br />Page 7 <br />Coating's 2012 financial statements it appears that "but for" a reduction in costs or a supplementary revenue stream, <br />the lenders assessment of the company's inability to produce additional equity in the amount of $1,153,878 is <br />reasonable, <br />Conclusion <br />The developer has requested assistance in the amount of $1,153,878. The developer has indicated that <br />extraordinary site development costs relating to wetlands mitigation and a gas line that runs through the center of the <br />property is the basis of their request. There are several methods to determine if a project would proceed "but for" <br />assistance. Based on the available information, in this case a gap analysis was utilized to test the viability of the <br />project. The tables in the above paragraphs indicated that a gap in available financing exists and that "but for" <br />abatement assistance, a reduction in costs, or increased equity the project would not go forward. In addition the <br />lending institution working with the developer has indicated that the developer has obtained the maximum amount of <br />new debt that they can support and without some kind of public assistance that amounts to $1,153,878 (in addition to <br />the EDA loans) the developer would not be able to proceed. <br />Thank you for the opportunity to be of assistance to the City of Elk River, Please contact us at 651 - 223 -3000 or <br />mhuot a0springsted.com and jbradshaw@springsted.com with any questions or to discuss. <br />