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City of Elk River, Minnesota <br /> But For Analysis of Jackson Hills Residential Suites TIF Project <br /> March 24,2017 <br /> Page 2 <br /> submitted information provides that the request for assistance would be pay-as-you-financing as reimbursement for <br /> extraordinary development costs. Following review of the developer's application and in accordance with existing City <br /> policy regarding TIF Housing Districts, it has been determined the developer may be eligible to receive up to 65% of <br /> the requested amount of assistance. This equates to a revised amount of assistance of up to$325,000. <br /> The developer has indicated the receipt of City financial assistance is necessary for the project to proceed to finance <br /> a portion of the project costs. The developer's initial request for assistance ($500,000) is equal to approximately <br /> 8.3% of total project costs. The estimated revised amount based on City policy is equal to $325,000 and is <br /> approximately 5.4% of total project costs. See complete sources and uses below from the developer's supporting <br /> financial materials submitted to Springsted. These figures are slightly different from the original application with <br /> some adjustments made to the debt and equity amounts, as well as the revised TIF amount. <br /> Sources Amount Uses Amount <br /> Equity $1,018,197 Land Acquisition 400,000 <br /> Debt $4,656,803 Site Work 300,000 <br /> TIF $325,000 Construction 4,855,000 <br /> Architectural &Engineering 75,000 <br /> Legal Fees 10,000 <br /> Interest during Construction 130,000 <br /> Contingencies 230,000 <br /> Total $6,000,000 Total $6,000,000 <br /> Tax Increment Assumptions <br /> In order to estimate the amount of TIF revenues generated by the proposed project, certain assumptions were made <br /> based on the value of the project, construction schedule, and anticipated financing terms. <br /> • Total project area(2 parcel) <br /> 0 75-134-2303 (EMV of$61,100) <br /> 0 75-134-2305 (EMV of$233,700) <br /> o Base value of TIF District <br /> o Estimated original net tax capacity of$3,685 <br /> ■ Classified as residential rental class rate <br /> • Estimated total market value upon completion <br /> 0 40 units at$82,800/unit <br /> o Total estimated completed value: $3,310,000 <br /> o Based on Assessor review <br /> • Maximum term of housing district(26 total years) <br /> • Increment based on difference between existing land value and new land/building value <br /> • Construction commences in 2017 and is completed in 2018 <br />