6.3 EDSR 10-17-2016 - Laserfiche WebLink

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