5. HRSR 06-26-2006 - Laserfiche WebLink

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Downtown North of Highway 10 Redevelopment Plan Update June 2G, 2006 HRA Meeting Page 2 of 3 Project Background Below is a summary of the HRA's redevelopment planning activities for the area: • Project purpose was defined and the attached work plan was developed • Several previously prepared analyses, plans and other documents were collected including the Interregional Trunk Highway (TH) 10 Corridor Management Plan, a Market Analysis, a Historical Significance Analysis, a Building Condition Analysis, the Elk Rive Comprehensive Plan, the Elk River Transportation Plan Update • HRA developed a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis for the area • Policy goals and strategies were drafted as part of the redevelopment plan • The attached financial modeling template was developed to begin testing the financial feasibility of sample land uses in Sub-Planning Area 4. Financial Modeling What is financial modeling? Financial modeling is a method to test the financial feasibility of sample land use concepts. This is a starting point for testing the financial feasibility of a redevelopment project. A financial modeling template is meant to test the first in a series of land use concepts for redevelopment. What is the purpose of financial modeling? Financial modeling assists city planners to develop land use concepts based on the financial feasibility of a project. Land use concepts are meant to be refined as financial modeling concepts are refined. How will financial modeling be used for this project? Financial modeling will be used to help determine the following: Cost estimates for a redevelopment concept Estimated Tax Increment Financing (TIF) for redevelopment Estimate of the financial gap between costs and TIF Preliminary Redevelopment Gap Analysis Summary The attached preliminary gap analysis indicates the different ranges of financial gaps that would need to be filled, whether it be through TIF, grants, low-interest loans, etc., in order to make the sample land use concepts feasible in Sub-Planning Area 4. For instance, the financial gap for the current Downtown Revitalization Project was filled by the usage of Tax Increment Financing TIF, reducing the sale price of the land and deferral of SAC and WAC. Redevelopment is a complex and expensive process in which property is most often purchased at above market value prices even though the buildings will be removed. S:\Downtown North of Hwy 10\Memos\2006\G-2G-OG.doc