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annual taxes generated from the expansion payable in 2018 is estimated at$20,638 assuming that only the <br /> partial value will be collected for the first year after completion of the project, and$27,517 for years 2019- <br /> 2032 representing the full market value. The applicant is requesting abatement of 100% of the city <br /> portion of the taxes in the amount of$6,815 in year one (2018) reflecting the partial value and 9,087 for <br /> years 2-14 reflecting the full estimated market value of the project for a total property tax abatement <br /> request of$134,037 over 15 years. <br /> Tax Abatement <br /> The attached memo from Springsted summarizes the analysis completed to date. The project scored 30 <br /> out of 45 total possible points,indicating a moderate project desirability rating. <br /> The property tax abatement policy indicates that the developer shall demonstrate that the project is not <br /> financially feasible but-for the use of Tax Abatement.The policy indicates that the city will consider the use <br /> of Tax Abatement assistance for projects that may not meet the hu/-forand job creation criteria, but rather <br /> would be considered a location incentive. These projects may result in other public benefits such as <br /> significant tax base increase, the creation of higher paying jobs (at least twice the minimum hourly rate <br /> stated in the City's Business Subsidy Policy), and is likely to assist in the marketing and attraction of <br /> additional desired developments. This project does not need a location incentive and shows no evidence <br /> of attracting additional desired developments. Springsted's but-for analysis indicates the project has other <br /> means in which to reduce a potential financing gap and could proceed without public assistance. <br /> Based on past workshop discussions, staff has highlighted the recent use of financing tools such as <br /> property tax abatement and tax increment financing,and discussed reserving this type of assistance <br /> strictly for project gap financing or to assist in extraordinary site mitigation costs associated with project <br /> development. <br /> Financial Impact <br /> The property tax abatement request would result in the abatement of$134,037 in city property taxes over <br /> the next 15 years. <br /> Attachments <br /> • Property Tax Abatement Application <br /> • Tax Abatement Score Sheet <br /> • Springsted Analysis (February 19, 2016) <br /> • Cornerstone Auto, 1.1 C Project Plans <br />