3.1. EDSR 01-31-2017 - Laserfiche WebLink

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this project would be equal to approximately what the abatement revenues will be, combined city and county. If that rate is not achievable, then the abatement would be necessary. Mr. Vitzthum stated that at$5 per square foot it shows that the gap financing is necessary,if we sensitize it to $6 per square foot,it shows that gap financing wouldn't be necessary,based on the same assumptions and if the forgivable loan was not in the picture, the gap would be necessary. Ms. Huot stated that without the forgivable loan, the abatement revenues alone wouldn't be sufficient enough to support the increased mortgage. Mr. Vitzthum stated that the forgivable loan is an important factor in the viability of the project. Ms. Huot illustrated another way they look at sources and uses is to determine if the applicant increased the amount of equity,how would it impact the return to them. Ms. Huot stated that looking at the upfront sources and uses of the financing, specifically the debt and equity put into the project, can the applicant increase the amount of equity of the project, through other revenues and how would that impact the return to them. Mr. Vitzthum indicated that it really comes down to the lease rate that the current market can support. Mr. Tviete highlighted the lease revenues that at$6 the but for test isn't met, at $5 it probably is. Members reviewed local lease rates in the area based on comps in the area. Ms. Huot also stated that she looked at how else could they leverage funds, and additional equity and if they have it and if it,would it provide a reasonable return on that equity. Ms. Huot What is that threshold and is it achievable Ms. Wagner asked whether the county would support the project. Dan Weber spoke on behalf of Sherburne County,who is in support of the abatement request. Dan Weber, calculated the blended rate valued the warehouse space at$4.50 - $4.75. Office at$8.00 per foot. Come up with a blended rate of$5.25 -$5.50 a square foot. At least one of these abatements will need to be utilized to make this project work. Mr. Vitzthum asked Ms. Huot to put$5.50 into her spreadsheet to determine what happens to the viability of the project. Mr. Tviete and Ms. Wagner indicated their support the project. Ms. Wagner asked Ms. Othoudt why we scored the project"moderate" for spin off development. Ms. Othoudt stated that the moderate rating was because there are no current projects in the pipeline for that area.