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Springsted Incorporated <br /> 380 Jackson Street, Suite 300 <br /> Saint Paul,MN 55101-2887 <br /> Springsted <br /> Tel: 651-223-3000 <br /> Fax: 651-223-3002 <br /> MEMORANDUM www.springsted.com <br /> TO: Members of the EDA and City Council <br /> Brian Beeman, Economic Development Director <br /> Clay Wilfhart,Assistant Director of Economic Development <br /> FROM: Mikaela Huot,Vice President <br /> Julian Bradshaw,Analyst <br /> DATE: June 26, 2013 <br /> SUBJECT: Preferred Powder Coating-Project Analysis <br /> The City of Elk River and the Elk River Economic Development Authority(EDA) previously requested that Springsted <br /> provide preliminary Tax Abatement revenue projections and a "but for" analysis for the Preferred Powder Coating <br /> project. The EDA held a meeting on June 24, 2013 to discuss the"but for" report and the available financing options <br /> for the project. As a result of questions posed at the meeting, Springsted has prepared additional Abatement <br /> scenarios. <br /> Tax Abatement Revenue Estimates <br /> Preferred Powder Coating Scenario 1 -Abate Scenario 2-Abate <br /> Building Value Only Land and Building Value <br /> Anticipated Term 20 years 20 years <br /> City Share of Revenues $776,752 $933,593 <br /> County Share of Revenues $839,156 $1,008,599 <br /> School District Share of Revenues $0 $0 <br /> Estimated Net Revenue $1,615,908 $1,942,192 <br /> Total Estimated Present Value of Revenues <br /> (4%discount rate and 811113 date) $1,048,925 $1,260,724 <br /> Total Estimated Present Value of Revenues <br /> (3%discount rate and 811113 date) $1,161,286 $1,395,772 <br /> Total Estimated Present Value of Revenues <br /> (2%discount rate and 811113 date) $1,290,949 $1,551,615 <br /> `These are estimates and subject to verification <br /> Please note that if abating building value only(assuming a 3%discount rate)it would take approximately 20 years to fulfill the developer's request.If <br /> both land and building are abated(also assuming a 3%discount rate)it would take approximately 18 years to fulfill the developer's request <br /> Public Sector Advisors <br />