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Tax Increment Revenue Assumptions <br />The County Assessor provided a taxable value estimate for the project. To estimate the amount of available <br />TIF revenues generated by the proposed project, certain assumptions were made based on the value of the <br />project, construction schedule, and anticipated financing terms. <br /> <br /> Total existing value of $442,400 <br />o Parcel ID: 75-704-0205 <br />o Base value as of Jan. 1, 2020 <br />o Original net tax capacity (ONTC) of $5,530 <br />o Assuming reclassification to rental rates <br /> Rental classification is 1.25% <br /> Estimated total market value upon completion <br />o $21,759,300 <br />o 178 new units at $122,243/unit <br /> Classification for all units as rental <br />o Rental class rate (1.25% per unit) <br /> Incremental value based on difference between existing and new land/building value <br /> Construction commences in 2021 and is completed in 2022 <br />o Project values 100% complete for assess 2023 and taxes payable 2024 <br /> First increment collected in 2023 <br />o Election to delay first increment by up to 4 years <br /> Net present value (discount) rate of 4% <br /> 2% annual market value inflation <br /> <br />Tax Increment Revenue Estimates <br /> <br /> Revenue Estimates <br /> <br />Estimated annual available increment (first year) $346,668 <br /> <br />Total gross tax increment (26 years) $11,966,132 <br />City retainage (10%) $598,306 <br />Net amount available for development (90%) $11,367,826 <br /> <br />Estimated Maximum Revenues (15 Years) $5,520,575 <br /> <br />Total estimated present value (4%) 15 Years $3,740,228 <br /> <br />Developer Pro forma Analysis including But-For <br />Upon approval of a TIF district and project, the City must make several findings, including the “but for” test: that <br />the proposed development would not reasonably be expected to occur solely through private investment within <br />the reasonably foreseeable future. The developer has stated that but for the provision of tax increment <br />financing, the project as proposed would not occur. Based on the developer’s stated position relative to the <br />need for tax increment financing assistance, the City could make its “but for” finding and provide tax increment <br />assistance. We recommend, however, that the City review the provided assumptions to consider if the project <br />meets the but-for test and, if so, what an appropriate level and type of TIF assistance may be based on the <br />information submitted by the developer. <br /> <br />Following thorough evaluation of the project as provided allows the City to be prepared to make an informed <br />“but-for” decision based on the likelihood of the project needing assistance, as well as the appropriate level of <br />assistance. To complete this analysis, we reviewed the developer’s provided operating proforma and <br />constructed similar ten-year project proformas, showing a result if the developer received the assistance as <br />pay-as-you-go (reimbursement for TIF eligible costs) and showing a result if the developer did not receive <br />assistance. Our analysis of the proformas included a review of the development budget, projected operating <br />revenues and expenditures, and the project’s capacity to support annual debt service on outstanding debt. The <br />purpose of evaluating the operating proformas is to understand the potential cash flow performance through