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9614 12 <br /> <br />HIGHEST AND BEST USE <br /> <br />As If Vacant/And/Or) As Vacant <br /> <br />1. Strong suburban and Interstate highway markets. <br /> <br />2. Development of land intensive uses which do not <br /> generate large amounts of tax revenue. <br /> <br />3. Development of industrial uses which require outside <br /> storage or other unattractive features. <br /> <br />Industrial uses most sought after by municipalities can be characterized <br />as follows. <br /> <br />1. Uses completely enclosed in a building, preferably of <br /> masonry construction. <br /> <br />2. Light clean industrial users. <br /> <br />o <br /> <br />Users which construct high value structures create a <br />significant tax increase (increment) over the value of bare <br />land. The incremental tax increases of a new building <br />over the value of a bare site are used by most cities to <br />subsidize development. This process known as tax <br />increment financing is the tool by which cities can <br />provide the most subsidy to a prospective industrial user. <br />A small building on a large site (land intensive use) <br />creates a relatively Iow tax increment and is not attractive <br />to most municipalities. <br /> <br />4. Industrial users which will create a significant number <br /> and/or high paying manufacturing jobs. <br /> <br />Industrial land in Elk River has some appeal even without municipal <br />subsidies. <br /> <br />Elk River has very good highway access and the completion of Highway <br />101 to Rogers will increase this appeal. Additionally, Elk River offers an <br />attractive environment for workers and Sherburne County has relatively <br />Iow effective tax rates. However, the municipal subsidies offered by <br />Ramsey and Anoka virtually dictate that similar subsidies will be <br />required for light industrial development to occur in Elk River. <br /> <br />If municipal subsidies are required in order to sell and develop <br />industrial sites (lots), then it is not the highest and best use of the land <br />which drives the market. It is important to understand, when examining <br /> <br />Patchin & Associates, Inc. <br /> <br />Valuation Consultants <br /> <br /> <br />