7.1. SR 09-03-2013 - Laserfiche WebLink

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City of Elk River, Minnesota indicated that the development would not occur without the financial assistance provided by the City, as it would not be economically feasible. The developer's lender has indicated approval of financing for the project is contingent on City financial assistance for financing of a portion of the extraordinary site improvement and acquisition costs. Therefore it has been determined the project is not feasible and would be unlikely to occur, but-for the use of tax increment to finance a portion of the extraordinary costs related to site improvements and infrastructure costs. The City finds the use of tax increment necessary to finance these site improvement and infrastructure costs which currently do not allow development on the property. The City anticipates providing financial assistance through the use of an interfund loan, which will be repaid through the collection of tax increment. No Higher market value expected., The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future, and the increased market value of the site that could reasonably be expected to occur without the use of tax increment would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan; The desired development project shall consist of an approximately 100,224 square foot manufacturing facility. The proposed development will require substantial costs including site improvements and infrastructure costs, due to wetlands and a gas line running through the property, and additional costs compared to other development sites the company has considered. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan. Without improvements the City has no reason to expect that significant development would occur without assistance similar to that provided in this plan. For the same reasons that the desired development described above is not feasible without tax increment assistance, the City believes that no alternative development is likely to occur without similar assistance. Almost any other development of the site would require the same substantial site improvements and infrastructure costs. Finally, the City believes that the desired project represents the maximum development density available to the project site. Therefore, the City concludes as follows: The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. To summarize the basis for the City's findings regarding alternative market value, in accordance with Minnesota Statutes, Section 469.175, Subd. 3(d), the City makes the following determinations: a. The City's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is $0 (for the reasons described above), except some unknown amount of appreciation. b. If the proposed development to be assisted with tax increment occurs in the District, the total increase in market value would be approximately $5,101,056 including the value of the building (See Exhibit V). C. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be$1,071,403(See Exhibit V). d. Even if some development other than the proposed development were to occur, the City finds that no alternative would occur that would produce a market value increase greater than $4,029,653 (the amount in clause b less the amount in clause c)without tax increment assistance. (3) The TIF Plan would afford maximum opportunity, consistent with the sound needs of the City as a whole,for development of the Project Area by private enterprise. SPRINGSTED Page 5