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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 Total Cost fir „` tiitt � iii c
<br /> Land Acquisition **$1 Private Equity $191,817
<br /> Site Development (site prep, wetland 630,000 Private Financing 4,547,000
<br /> mitigation, grading, gasoline, etc.)
<br /> Building Construction 3,470,000 EDA Forgivable Loan 200,000
<br /> Machinery& Equipment 1,000,000 EDA Micro Loan 100,000
<br /> Working Capital 200,000
<br /> Wetland Mitigation 11,800
<br /> Contingencies 200,000
<br /> Total Costs $5,511,801 Total Sources $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 Total Cost re � Hitt � � ��Irc,I ..
<br /> Land Acquisition **$1 Private Equity $191,817
<br /> Site Development (site prep, wetland **157,016 Private Financing 4,547,000
<br /> mitigation, grading, gasoline, etc.
<br /> Building Construction 3,470,000 EDA Forgivable Loan 200,000
<br /> Machinery& Equipment 1,000,000 EDA Micro Loan 1005000
<br /> Working Capital 200,000
<br /> Wetland Mitigation 11,800
<br /> Contingencies 200,000
<br /> Total Costs $5,038,817 Total Sources $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"Analysis
<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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