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Springsted Incorporated <br /> 380 Jackson Street, Suite 300 <br /> - - Saint Paul,MN 55101-2887 <br /> Springsted <br /> Tel: 651-223-3000 <br /> Fax: 651-223-3002 <br /> www.springsted.com <br /> MEMORANDUM <br /> TO: Amanda Othoudt, City of Elk River <br /> FROM: Mikaela Huot,Vice President/Consultant <br /> DATE: March 24, 2017 <br /> SUBJECT: Financial Feasibility/But for Analysis for Jackson Hill Residential Suites Housing Project <br /> The City of Elk River received an application for financial assistance through Tax Increment Financing (TIF)to assist <br /> with financing a portion of the development costs related to the construction of a 40-unit residential rental multi-family <br /> affordable housing project located in the City of Elk River. The developer, Jackson Hills Residential Suites, LLC, has <br /> requested tax increment assistance to finance a portion of the costs associated with development of the project and <br /> providing a portion of the units as affordable. The purpose of this memorandum is to provide a summary of <br /> Springsted's review of the development project costs and operating pro forma as provided by the developer in order <br /> to assist the City with making a determination if the project as proposed would be unlikely to proceed "but-for' the <br /> requested Tax Increment Financing (TIF) assistance, and also to determine the appropriate amount, if any, of public <br /> assistance. <br /> Background <br /> The developer submitted a request for TIF assistance with the purpose of using tax increment to finance costs <br /> associated with construction of the project. The developer has proposed construction of an approximate 40 unit <br /> multi-family housing project in which a portion of the units would be affordable. The Sherburne County Assessor has <br /> provided a new assessed value of the building to be approximately$3,310,000 upon completion which equates to a <br /> value per unit of $82,800 (land and building). The actual value may be subject to further review and final building <br /> details. <br /> Developer Request for Assistance <br /> Assistance has been requested for financing a portion of the costs associated with construction of the project. The <br /> developer has proposed the $6 million project will be funded by an estimated $700,000 of equity and $4.8 million of <br /> private financing with a financial gap of $500,000 as requested to be financed through TIF funds. The developer's <br /> Public Sector Advisors <br />