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City of Elk River, Minnesota <br />Envision Co., LLC (Sportech) request for Tax Abatement <br />June 23, 2015 <br />Page 2 <br /> <br />project would not proceed “but for” the assistance. It is important to note that tax abatement does not statutorily <br />require a “but for” analysis to determine if the project would proceed without assistance, however it must be <br />determined that the project is in the public interest and that the benefits outweigh the costs and the City’s current tax <br />abatement policy requires this finding be made. <br /> <br />Tax Abatement Assumptions <br />Springsted made certain assumptions to calculate the estimated amount of tax abatement revenue generated by the <br />proposed new project. Those assumptions include the following: <br /> <br /> City of Elk River proposed tax abatement <br />o Abate incremental land & building value <br />o PIDs: 75-828-0205 and 75-828-0210 <br />o EMV as of Jan. 2, 2014 for taxes payable 2015 is $0 <br /> Assumed to be ‘base’ value of abatement <br /> Tax exempt property owned by EDA with no taxable value <br /> Value estimate provided by County Assessor <br />o EMV as of Jan. 2, 2016 for taxes payable 2017 is $5,243,700 <br /> Land: $1,236,200 <br /> Building: $4,007,500 <br /> Total Value: $5,243,700 <br /> Value estimate provided by County Assessor <br /> Abatement term and participation <br />o Request for City assistance for 20 years <br /> Recommended City participation for 15 years <br />o Request for County assistance for 15 years <br /> Recommended County participation for 12 years <br /> First Year of Abatement <br />o Taxes payable 2017 (based on partial value) <br />o Construction commences summer/fall 2015 <br />o Construction complete by December 31, 2016 <br /> 2015 tax rates remain constant through term (Rates Provided by Sherburne County) <br />o City : 47.190% <br /> Class rates remain constant through abatement term <br /> Fiscal disparities contribution - NA <br /> 0% annual market value inflator assumed <br /> Present Value Assumptions <br />o 4% Discount Rate <br />o Dated Date of December 31, 2015 <br />