7.1 SR 10-05-2020 - Laserfiche WebLink

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City of Elk River, Minnesota See Section E of this document for the reasons and facts supporting this finding. (2) The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the TIF Plan. Factual basis: Proposed development not expected to occur: The proposed development consists of the construction of an approximate 20,000 square foot new warehousing facility. The new facility will be used primarily for warehousing to allow for further business growth and development. The business has requested financial assistance to write down a portion of the acquisition and site improvement costs associated with development of the site. The provided supplemental financial information demonstrates that the development of this site would not occur without the assistance provided in this TIF Plan. Therefore, the City has determined that the proposed development would not occur but for the financial assistance provided in this TIF Plan because of the increased costs related to development within the TIF District. The property requires additional expenditures related to development of the site, including acquisition, site improvements, storm water ponding and winter construction, which currently do not allow development on the property. No higher market value expected: The land located within TIF District No. 26 requires site improvements including site preparation, grading, and landscaping, as well as storm water ponding. To commence construction of the new business facility, assistance with financing a portion of those costs will be necessary. The financial assistance provided under this TIF Plan will help offset the costs of these improvements. Given the nature of this property, there is no reasonable expectation of any development occurring that would generate as much market value increase as is estimated to be generated by the proposed development by the new business. Therefore, the City has concluded that substantial development at this particular site --and hence any significant increase in market value --is not reasonably expected to occur unless the City provides tax increment assistance as described in this Tax Increment Plan. To summarize the basis for the City's findings regarding alternative market value, in accordance with Minnesota Statutes, Section 469.175, Subd. 3(d), the City makes the following determinations: a. The City's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is $0 (for the reasons described above), except some unknown amount of appreciation. b. If the proposed development to be assisted with tax increment occurs in the District, the total increase in market value would be approximately $1,330,900, including the value of the building (See Exhibit II). C. The present value of tax increments from the District for the maximum duration of the district permitted by the TIF Plan is estimated to be $214,321 (See Exhibit V). SPRINGSTED Page 4