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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(a,springsted.com and ibradshaw(a,springsted.com with any questions or to discuss. <br />