Laserfiche WebLink
City of Elk River, Minnesota <br />Baker Tilly Municipal Advisors, LLC Page 4 <br /> <br /> <br />Section J Findings and Need for Tax Increment Financing <br /> <br />In establishing the TIF District, the City makes the following findings: <br /> <br /> (1) The TIF District qualifies as an economic development district; <br /> <br />See Section E of this document for the reasons and facts supporting this finding. <br /> <br /> (2) The proposed development, in the opinion of the City, would not reasonably be expected <br />to occur solely through private investment within the reasonably foreseeable future and <br />the increased market value of the site that could reasonably be expected to occur without <br />the use of tax increment financing would be less than the increase in the market value <br />estimated to result from the proposed development after subtracting the present value of <br />the projected tax increments for the maximum duration of the district permitted by the TIF <br />Plan. <br /> <br />Factual basis: <br /> <br />Proposed development not expected to occur: <br /> <br />The proposed development consists of the construction of an approximately 113,000 square foot <br />industrial facility with a possibility of an additional 40,000 square foot expansion. The Developer <br />has requested financial assistance to finance the land acquisition costs and portion of the site <br />development costs associated with development of the site and construction of the project. The <br />Developer has provided supplemental financial information demonstrating that the development of <br />this site would not occur without the assistance provided in this TIF Plan. <br /> <br />Therefore, the City has determined that the proposed development would not occur but for the <br />financial assistance provided in this TIF Plan because of the increased costs related to development <br />within the TIF District and construction of the project. The cost of construction of the project and <br />availability of revenues to support repayment of debt has created a financial gap that requires a level <br />of public assistance. <br /> <br />No higher market value expected: <br /> <br />The project to be constructed within TIF District No. 29 requires significant investment. To <br />commence construction of the new industrial facility, assistance with financing a portion of those <br />costs will be necessary. The financial assistance provided under this TIF Plan will help offset the <br />upfront land acquisition costs. Given the nature of this project, there is no reasonable expectation of <br />any development occurring that would generate as much market value increase as is estimated to be <br />generated by the proposed development by the new business. Therefore, the City has concluded <br />that substantial development at this particular site--and hence any significant increase in market <br />value--is not reasonably expected to occur unless the City provides tax increment assistance as <br />described in this Tax Increment Plan. <br /> <br />To summarize the basis for the City’s findings regarding alternative market value, in accordance with <br />Minnesota Statutes, Section 469.175, Subd. 3(d), the City makes the following determinations: <br /> <br />a. The City's estimate of the amount by which the market value of the site will increase <br />without the use of tax increment financing is $0 (for the reasons described above), except <br />some unknown amount of appreciation. <br /> <br />Page 20 of 64