Joint HRA & City Council Meeting 09-04-2018

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Elk River TH 10 and Lowell Redevelopment LHB Project No. 180477 Page 9 of 11 Final Report determine if the total deficiencies warranted “substantial renovation or clearance” based on the criteria we outlined above. System condition deficiencies are a measurement of defects or substantial deterioration in site elements, structure, exterior envelope, mechanical and electrical components, fire protection and emergency systems, interior partitions, ceilings, floors and doors. The evaluation of system condition deficiencies was made by reviewing all available information contained in City records, and making interior and exterior inspections of the buildings. LHB only identified system condition deficiencies that were visible upon our inspection of the building or contained in City records. We did not consider the amount of “service life” used up for a particular component unless it was an obvious part of that component’s deficiencies. After identifying the system condition deficiencies in each building, we used our professional judgment to determine if the list of defects or deficiencies is of sufficient total significance to justify “substantial renovation or clearance.” FINDING: In our professional opinion, seven (7) out of eight (8) buildings (87.5 percent) in the proposed TIF District are structurally substandard to a degree requiring substantial renovation or clearance, because of defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. This exceeds the 50 percent requirement of Subdivision 10a(1). C. DISTRIBUTION OF SUBSTANDARD STRUCTURES Much of this report has focused on the condition of individual buildings as they relate to requirements identified by Minnesota Statutes, Section 469.174, Subdivision 10. It is also important to look at the distribution of substandard buildings throughout the geographic area of the proposed TIF District (Diagram 3). FINDING: The parcels with substandard buildings are reasonably distributed compared to all parcels that contain buildings. The Northwesterly portion of the proposed TIF District does not contain a substandard building, but it has a very small sample size of one structure to evaluate. In addition, the Northwesterly portion of the proposed TIF District has significant area allocated to paved parking lots which also meets the distribution requirements under Subdivision 10.