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City of Elk River, Minnesota <br />SBH Properties, LLC Tax Abatement Project <br />September 23, 2016 <br />Page 3 <br /> <br /> <br />SBH Properties, LLC Proposed Tax Abatement City County <br />Participation and Number of Years <br />City for 12 years County for 10 years <br />(based on application – subject to review and approval) <br /> <br />Estimated Annual Abatement Revenue <br />$7,097 $7,759 <br />(upon full buildout for taxes payable 2019) <br /> <br />Total Estimated Abatement Revenues $85,167 $77,595 <br /> <br />Total Estimated Combined Abatement Revenues $162,762 <br /> <br />The above table illustrates the projected net revenues that the tax abatement project could generate based on the <br />applicant’s request. The application for abatement assistance includes a proposed term of 12 years from the City <br />and 10 years from the County. Total abatement revenue amount as requested from the City is approximately <br />$85,167 and $77,595 from the County from a total of $162,762. The maximum abatement term for the City is up to <br />20 years if only 1 or 2 entities participate in the abatement or the City receives written denial of participation from one <br />of the other taxing entities (County or School District). Revenues captured through tax abatement and provided as <br />reimbursement to the property owner for certain costs must be used only for those properties that benefit from the tax <br />abatement. <br /> <br />Applicant Request for Tax Abatement Assistance <br />The applicant submitted a request for tax abatement assistance to the City of Elk River to assist with financing the <br />proposed $1.75 million project for the construction of a new building located within the City. The applicant has <br />requested approximately $162,762 in abatement assistance over 12 years from the City and 10 years from the <br />County, respectively, which equates to approximately 9.29% of the total project costs. The applicant’s submittal <br />includes a preliminary total project budget of $1,750,968 as shown in the table below. <br /> <br />Project Costs Total Cost Sources of Funds Total Sources <br />Land Acquisition $121,968 Bank Loan $1,049,774 <br />Site Development 154,000 Equipment Loan 351,000 <br />Building Construction 1,064,000 Equity 150,194 <br />Machinery & Equipment 321,000 EDA Forgivable Loan 200,000 <br />Architectural & Engineering & Legal 10,000 <br />Moving Expenses 30,000 <br />Closing Costs 35,000 <br />Contingency 15,000 <br /> <br />Total $1,750,968 Total $1,750,968 <br />