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City of Elk River, Minnesota <br /> Tax Increment Applications for Proposed Jackson Hill Residential Suites Housing Project and <br /> Elk River Lodge and Residential Suites, LLC <br /> January 25,2018 <br /> Page 2 <br /> information provides that the request for assistance would be pay-as-you-financing as reimbursement for <br /> extraordinary development costs. The developer has indicated the receipt of City financial assistance is necessary for <br /> the project to proceed to finance a portion of the project costs. The developer has requested 90%of the available tax <br /> increment for a 25 year term. Based on current projections, this would equate to approximately$1.2 million with an <br /> estimated present value of $677,000. See complete sources and uses below from the developer's supporting <br /> financial materials submitted to Springsted. <br /> Sources Amount Uses Amount <br /> Equity $1,179,804 Land Acquisition 400,000 <br /> Debt $4,719,804 Site Work 834,071 <br /> TIF Construction 4,316,772 <br /> Architectural &Engineering 75,825 <br /> Legal Fees 10,000 <br /> Interest during Construction 82,350 <br /> Contingencies 180,000 <br /> Total $5,899,018 Total $5,899,018 <br /> There was some discussion during the first application process at a previous EDA Finance Committee regarding the <br /> size of the proposed district (one or two properties) and related acquisition price. The acquisition price included in <br /> the project sources and uses is for the 1.76 acre parcel that will comprise the 40-unit housing project. Reducing the <br /> existing purchase price from $5.21/square foot to something less is expected to have a positive impact on the <br /> performance of the project. It could ultimately reduce the amount of assistance necessary but is not expected to <br /> eliminate the need for assistance. <br /> Tax Increment Assumptions(Jackson Hills) <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 parcels) <br /> 0 75-134-2303(EMV of$71,900) <br /> 0 75-134-2305(EMV of$233,700) <br /> o Base value of TIF District <br /> o Estimated original net tax capacity of$3,820 <br /> ■ Classified as residential rental class rate <br /> • Estimated total market value upon completion <br /> 0 40 units at$82,750/unit <br /> o Total estimated completed value: $3,310,000 <br /> o Based on Assessor review <br />