7.2. EDSR 02-16-2021 - Laserfiche WebLink

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• Estimated total market value upon completion o 91,050 square foot facility  $31 per square foot (approximate)  $2,825,000 • Incremental value based on difference between existing and new land/building value • Construction commences and is completed in 2021 o Project values 100% complete for assess 2022 and taxes payable 2023 • First abatement collection in 2023 • Final year collection in 2036 • Original term of abatement o Approved term from 2015 was 15 years (2017-2031) • Maximum term of abatement o 15 years if all three taxing entities participate or o 20 years if one taxing entity declines participation or 90 days pass from initial participation request o Total revised abatement term would be 2017-2036  To include both original and updated abatements and  With written denial of participation from the School District • 0% annual market value inflator Tax Abatement Revenue Estimates Tax Abatement Revenue Projections Annual Market Value Inflator 0% City Share Total Estimated Annual Revenue Full Buildout $25,920 County Share Total Estimated Annual Revenue Full Buildout $26,584 School Share Total Estimated Annual Revenue Full Buildout $0 Total Gross Revenues $52,504 Estimated City Share (14 Years) $362,880 Estimated County Share (12 Years) $312,300 Estimated School District Share Total over Remaining Number of Years $675,180 The City and County approved a tax abatement for the original building construction for Sportech in 2015. The City approved a 15-year term and the County approved a 12-year term. Due to location of the building expansion on the same property and within the existing tax abatement, the maximum level of assistance that could be provided must fit within the remaining term of tax abatement (up to 20 years total). The first year of abatement was 2017 and the final year with a full 2-year term would be 2036. Based on current assumptions for construction of the expansion, the maximum number of years for the City share of tax abatement assistance would be 14 years (2023-2036). Applicant Pro forma Analysis including But-For In approving an abatement project, the Elk River EDA and City Council have requested that a finding be made that the proposed project would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. The City’s tax abatement policy outlines the considerations for which tax abatement may be considered as a financing tool. The policy also includes a provision for which the but-for test need not be met if the assistance for a project is considered more as a “location incentive”. Public benefits may include significant tax base increase, the creation of higher paying jobs (at least twice the minimum hourly rate stated in the city’s Business Subsidy Policy), and is likely to assist in the marketing and attraction of additional desired developments.