7.0. EDSR 04-10-2006ITEM # 7.
ver
MEMORANDUM
TO: Economic Development Authority
FROM: Catherine Mehelich, Director of Economic Development//~%/
DATE: March 13, 2006 t~ ~
SUBJECT: Discuss Draft Amendments to the City's Tax Increment
Financing Policy and Application
Attachments
• Tax Increment Financing Policy and Application, 1" Draft Amended Apxi12006
Background
Staff has been working on a review of the city's various economic development fmancing
programs and policies for amendments. The City of Elk River adopted its original Tax
Increment Financing Policy in August 1991. The policy was amended in March of 2000 to
include the provisions of the MN Business Subsidy Law and the City's Business Subsidy
Policy.
Issue
Since the many of the amendments were minor (but significantly affected the document
reformatting) staff has provided the attached clean copy of the revised policy and application
for the EDA's review. Please contact staff if you wish to receive a copy of the word-by-
woxd tracking of revised policy amendments. Below is a summary of the significant staff
amendments:
• Added the following objectives to the use of TIF (Section II)
*To significantly increase the City's tax base
* To enhance and diversify the City's economic base
• Reduced the owner cash equity requirement from 20% to 10% (Section III)
• Added provision that all TIF proposals optimize the private development potential
of a site (Section III)
• Increased the following project qualifications (Section I~
o Minimum increase of $37,500 per year in property taxes (originally $25,000)
o Result in a minimum market value of $1,250,000 (originally $1,000,000)
• Deleted the summary of the City's Business Subsidy Policy and state statute. Rather
the City's Business Subsidy Policy will be fully referenced within all financing policies
and applications (Section V)
• Increased the $5,000 application fee to a $10,000 non-refundable deposit (to cover
costs associated with establishing the TIF district) with the provision that
professional services in excess of the deposit shall be paid by the applicant, in
addition to professional cost associated with eminent domain and redevelopment
substandard tests (Section VI)
• Added provision that redevelopment and housing projects will be evaluated on a
case-by-case basis rather than using the scoring worksheet which is primarily
designed to evaluate industrial developments (Section VI)
• Added "Market Value/Tax Base Generation" to the application scoring worksheet
(Section I~
Recommendation
Staff recommends that the EDA review the draft revised policy and provide feedback on any
additional revisions. Following the EDA's feedback staff will make the final revisions and
prepare the document for EDA and City Council adoption, along with the final Micro Loan
and Tax Abatement Policies, in May.
CtY f
Elk
River
Tax Increment Financing
Policy & Application
1s` Draft Modified: Apri12006
Revised: March 2000
Adopted: August 1991
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
(763) 635-1040
Table of Contents
I. Policy Purpose
3
II. Objectives of Tax Increment Financing 3
III. City of Elk River Policies for the Use of TIF 4
IV. Project Qualifications
5
V. City of Elk River Business Subsidy Policy 6
VI. Application Process for TIF
VII. Application for TIF
10
Applicant Information 11
Project Infounation 12
Public Purpose 12
Sources & Uses 13
Checklist & Additional Information 14
VIII. Sample But-For Analysis
15
IX. Application Review Worksheet 16
City of Elk River
Tax Increment Policy & Application
1" Draft Modified Apri12006
Page2of14
I. POLICY PURPOSE
For the purposes of this document, the term `Wily"shall include the Elk Ktver City Counczl, Economic
Development Authority, and Housing and AedevelopmentAuthority.
The purpose of this policy is to establish the City of Elk River's position relating to the
use of Tax Increment Financing (TIF) fox private development above and beyond the
xequuements and limitations set forth by State Law. This policy shall be used as a guide
in the processing and review of applications requesting tax increment assistance. The
fundamental purpose of tax increment fmancing in Elk River is to encourage desirable
development or redevelopment that would not otherwise occur but for the assistance
provided through TIF.
The City of Elk River is granted the power to utilize TIF by the Minnesota Tax
Increment Financing Act, as amended. It is the intent of the City to provide the
minimum amount of TIF, as well as other incentives, at the shortest term required fox
the project to proceed. The City reserves the right to approve or reject projects on a
case by case basis, taking into consideration established policies, project criteria, and
demand on city services in relation to the potential benefits from the project. Meeting
policy criteria does not guarantee the award of TIF to the project. Approval ox denial of
one project is not intended to set precedent fax approval ox denial of another project.
II. OBJECTIVES OF TAX INCREMENT FINANCING
As a matter of adopted policy, the City will consider using TIF to assist private
development projects to achieve one ox more of the following objectives:
• To retain local jobs and/or increase the number and diversity of jobs that offer
stable employment and/ox attractive wages and benefits as defined in the City's
Business Subsidy Policy.
• To encourage additional unsubsidized private development in the area, either
directly ox indirectly through "spin ofP' development.
• To facilitate the development process and to achieve development on sites
which would not be developed without TIF assistance.
• To remove blight and/ox encourage redevelopment of commercial and
industrial areas in the city that result in high quality redevelopment and private
reinvestment.
• To offset increased costs of redevelopment (i.e. contaminated site clean up)
over and above the costs normally incurred in development.
• To create opportunities for affordable housing.
• To contribute to the implementation of other public policies, as adopted by the
city from time to time, such as the promotion of quality urban ox architectural
design, energy conservation, and decreasing capital and/ox operating costs of
local government.
Ciry of Elk River
Tax Increment Policy & Application
1" Draft Modified Apri12006
Page3of14
• To enhance and diversify the City of Elk River's economic base.
• To significantly increase the City of Elk River's tax base.
III. POLICIES FOR THE USE OF TIF
a. When possible, TIF shall be used to fmance public improvements associated
with the project. The priority for the use of TIF funds is:
1. Public improvements, legal, administrative, and engineering costs.
2. Site preparation, site improvement, land purchase, and demolition.
3. Capitalized interest, bonding costs.
b. It is the City's policy to establish the following types of TIF districts:
1. Economic Development Districts
• It is desired that the project result in a minimum creation of
one full time job per $25,000 of TIF.
2. Redevelopment Districts
• The market value of a redeveloped site shall increase by a
minimtmr of 50% of the current market value.
Other types of TIF districts, along with specific criteria, may be considered
on a case-by-case basis.
c. TIF assistance will be provided to the developer upon receipt of the
increment by the City, otherwise referred to as the pay-aryou8o method.
Requests for up front financing will be considered on a case-by-case basis.
d. A maximum of ten percent (10%) of any tax increment received from the
district may be retained by the City to reimburse administrative costs.
e. Any developer receiving TIF assistance shall provide a m;r,;mum of ten
percent (10%) owner cash equity investment in the project.
f TIF will not be used in circumstances where land and/ox property price is in
excess of fair market value.
g. Developer shall be able to demonstrate a market demand fox a proposed
project. TIF shall not be used to support purely speculative projects.
h. TIF will not be utilized in cases where it would create an unfair and
significant competitive financial advantage over other projects in the area.
i. TIF shall not be used for projects that would place extraordinary demands
on city services or fox projects that would generate sigtficant environmental
impacts.
The developer must provide adequate financial guarantees to ensure
completion of the project, including, but not limited to: minimum assessment
agreements, letters of credit, personal guaranties, and etcetera.
City of Elk River
Tax Increment Policy & Application
1~° Draft Modified April 2006
Page4of14
k. The developer shall adequately demonstrate, to the City's sole satisfaction, an
ability to complete the proposed project based on past development
experience, general reputation, and credit history, among other factors,
including the size and scope of the proposed project.
Fox the purposes of underwriting the proposal, the developer shall provide
any requested market, financial, environmental, ox other data requested by
the City ox its consultants.
m. All TIF proposals shall optimize the private development potential of a site.
IV. PROJECT QUALIFICATIONS
All TIF projects considered by the City of Elk River must meet each of the following
requirements:
a. To be eligible far TIF, a project shall result in:
i. The new construction of a minimum of 25,000 square feet;
ii. A minitntxm increase of $37,500 per year, excluding the state portion
in property taxes; and,
iii. Have a market value of at least $1,250,000 upon completion.
b. The project shall meet at least one of the objectives set forth in Section II
and satisfy all the provisions set forth in Section III of this document.
c. The developer shall demonstrate that the project is not financially feasible
but for the use of TIF.
d. The project shall comply with all provisions set forth in the Tax Increment
Financing Act, Minnesota Statutes 469.124 to 469.134, inclusive, as amended,
and Statutes 469.174 to 469.1799, inclusive, as amended.
e. The project must be consistent with the Ciry's Comprehensive Plan, Land
Use Plan, and Zoning Ordinances.
£ The project shall serve at least two of the following public purposes:
• Creation of jobs with livable wages and benefits.
• Significantly increase the City's tax base.
• Enhancement or diversification of the city's economic base.
• Industrial development that will spur additional private investment in
the area.
• Fulfillment of defined city objectives such as those identified in the
City's Comprehensive Plan and the City's Economic Development
Strategic Plan, among others.
• Removal of blight ox the rehabilitation of a high profile ox priority
site.
City of Elk River
Tax Increment Policy & Application
1" Draft Modi&ed Apri12006
Page 5 of 14
V. CITY OF ELK RIVER BUSINESS SUBSIDY POLICY
All developers/businesses receiving tax increment financing assistance from the City of
Elk River shall be subject to the provisions and requirements set forth by the City's
Business Subsidy Policy, as follows, and State Statute 116J.993.
CITY OF ELK RIVER POLICY AND PROCEDURES RELATING TO THE USE OF
BUSINESS SUBSIDIES -Adopted November 25, 2005
PURPOSE
For the purpaser of tbzr document, the term `City"rhall include the Elk Bzver City Council, Economic Development
Authority, and Houeing and RedevelopmentAutharity.
The purpose of this policy is to establish guidelines and criteria regarding the use of business
subsidies, such as tax increment financing (TI~, tax abatement, and other business subsidies
for private development projects within the City of Elk River and shall be in addition to the
requirements and limitations set forth by provisions of Minnesota State Statute 116J.993
(1~IN Business Subsidy Law), and by the City's policy and guidelines of the particular form of
subsidy.
These guidelines shall be used in processing and reviewing applications requesting business
subsidies assistance. The fundamental purpose of business subsidies in the City is to
encourage desirable development ox redevelopment that would not otherwise occur "but
fox" the assistance provided through business subsidies.
It is the intent of the City to provide business subsidies, as well as other incentives that the
City may deem appropriate, at the shortest term required fox the project to proceed. The
City reserves the right to approve ox reject projects on a case-by-case basis, taking into
account established policies, specific project criteria, and demand on city services in relation
to the potential benefits to be received from a proposed project Meeting policy guidelines
ox other criteria does not guarantee the award of business subsidies. Furthermore, the
approval ox denial of one project is not intended to set precedent fox approval ox denial of
another project.
Whenever possible it is the City's intent to coordinate the use of business subsidies with
other applicable taxing jurisdictions.
II. DEFINITION OF "BUSINESS SUBSIDY"
The following types of assistance having a value in excess of $25,000 axe defined as a
"business subsidy" within the MN Business Subsidy Law:
• State and local government agency giants;
• Contributions of personal property, real property, ox infrastructure;
• The principal amount of a loan that exceeds $75,000 at rates below those
commercially available;
• Reductions or deferrals of taxes ox fees;
• Guarantees of any payment under any loan, lease, ox other obligation; and,
• Preferential use of government facilities.
City of Elk Rivet
Tax Increment Policy & Application
1" Draft Modified Apri12006
Page 6 of 14
III. PUBLIC PURPOSE OBJECTIVES OF BUSINESS SUBSIDIES
In accordance with the MN Business Subsidy Law, the City will consider using business
subsidies to assist private development projects to achieve one or more of the following
public purpose objectives:
• To retain local jobs and/ox increase the number and diversity of jobs that offer
stable employment and/or attractive wages and benefits.
• To enhance and diversify the City of Elk River's tax base.
• To encourage additional unsubsidized private development in the area, either
directly or indirectly through "spin off 'development.
• To achieve development on sites which would not be developed without
business subsidies assistance.
• To remove blight and/or encourage development of commercial and industrial
areas in the city that result in higher quality development ox redevelopment and
private investment.
• To offset increased costs of development of specific properties when the unique
physical characteristics of the site may otherwise preclude private investment.
• To create opportunities fox the construction, operation and maintenance of
affordable housing.
IV. GENERAL POLICIES FOR THE USE OF BUSINESS SUBSIDIES
A. Business subsidy assistance will be provided from the City, by a "pay-as-you-go"
note method, to the developer if the business subsidy is tax increment financing ox
tax abatement. Requests fox up front financing will be considered on a case-by-case
basis.
B. A developer requesting business subsidy assistance must demonstrate, to the
satisfaction of the City, sufficient cash equity investment in the project as required
within the Ciry's policy for the particular form of subsidy.
C. Business subsidy will not be provided in circumstances where land and /ox property
price is demonstrated by the County Assessor to be in excess of fair market value.
This would normally be where the acquisition price is more than 10% in excess of
market value.
D. A developer must be able to demonstrate to the City, ox, if applicable, to the
underwriting authority, a market-demand for a proposed project.
E. Business subsidy will not be used in cases where the subsidy would create an unfair
and significant competitive fmancial advantage over other similar projects in the area.
F. Business subsidy will not be used fox projects that would place extraordinary
demands on city infrastructure and services.
G. If requested by the City, the developer shall provide adequate fmancial guarantees to
ensure completion of the project, including, but not limited to: assessment
agreements, letters of credit, cash escrows, and personal guaranties.
City of Elk River
Tax Increment Policy & Application
1~° Draft Modified Apri12006
Page 7 of 14
H. Each developer must be able to demonstrate to the City's satisfaction, an ability to
construct, operate, and maintain the proposed project based on past experience,
general reputation, and credit history.
I. If requested by the City, or its consultants, the developer shall provide sufficient
market, fmancial, environmental, ox other data relative to the successful operation of
the project.
J. Projects receiving business subsidy approval from other affected taxing jurisdictions
will be more favorably received by the City.
V. GUIDELINES FOR COMMERCIAL/INDUSTRIAL BUSINESS SUBSIDIES
A. Business subsidies will not be used fox on-site xetaIl ox service businesses unless it is
a redevelopment project that demonstrates that it will result in a substantial increase
in tax base and a significant improvement in quality employment.
B. The project must be consistent with the City's Comprehensive Plan, Land Use Plan,
and Zoning Ordinances.
C. The project must result in the retention of existing jobs that would be lost "but fox"
the proposed development ox result an increase and diversification in local jobs.
Business retention jobs will be considered on aone-fox-one match to job creation
only in cases where job loss is specific and demonstrable in accordance with the MN
Business Subsidy Law.
D. Specific wage and job goals will be determined by the City giving consideration to
the particular form of the subsidy, nature of the development, the purpose of the
subsidy, local economic conditions and similar factors. The recipient will have up to
two years to meet the job and wage goals established by the City. The minimum
wage fox a job to be considered a new ox retained job shall be $15.00 per hour
exclusive of benefits. Deviations less than the wage floor will be considered on a
case-by-case basis and in accordance with the requirements of the MN Business
Subsidy Law.
E. Business subsidies will not be used fox commercial/industrial projects that have a
history of inconsistent compliance with applicable environmental rules and
regulations.
VI. SUBSIDY AGREEMENT AND REPORTING REQUIREMENTS
Each company receiving a business subsidy shall be subject to the subsidy agreement and
reporting provisions and requirements set forth by the MN Business Subsidy Law and
summarized below:
A. Progress Reports
The recipient shall file a report annually fox two years after the receiving the
subsidy ox until all goals set forth in the subsidy agreement have been met,
which ever is latex. Reports shall be completed using the format drafted by the
Ciry of Elk River
Tax Increment Policy & Application
1~° Draft Modified April 2006
Page 8 of 14
State of Minnesota and shall be filed with the Ciry no later than March 1 of each
year for the progress made the previous year.
B. Failure to Comnlv
Businesses failing to comply with the subsidy agreement will be subject to fines,
repayment requirements, and be deemed ineligible by the State to receive any
loans ox grants from public entities fox a period of five years.
C. Maintain Facility
The recipient agrees to maintain and operate its facility at the site where the
subsidy is used fox a period of five years after the date the subsidy is provided.
VII. SUBSIDY APPLICATION PROCESS AND PROCEDURE
A. Application fox business subsidies shall be made on forms fox the particular form of
assistance provided by the City of Elk River Economic Development staff.
Following a review by appropriate City Staff the application shall be referred to
either the Econoxxuc Development Authority, ox Housing and Redevelopment
Authority, fox recommendation to the City Council for further action.
B. The application for business subsidies shall request information required within the
City's policies on the particular form of subsidy including but not limited to; a
detailed description of the project; a preliminary site plan; the amount of business
subsidy requested; the public purpose of the project; the number and types of jobs to
be created; the wages and benefits to be paid new employees; and verifiable funding
sources and uses.
City of Elk River
Tax Increment Policy & Application
1" Draft Modified Apn12006
Page 9 of 14
VI. APPLICATION PROCESS FOR TIF
Applicant submits the completed application along with anon-refundable
$10,000 application deposit. The application deposit will be used toward the
cost of services provided in the evaluation of financial feasibility, establishment
or modification of the TIF district, and preparation of legal documents and
agreements. An additional deposit of $10,000 will be required for projects the
require meeting statutory eminent domain and/or redevelopment substandard
tests. Projects that demand professional services in excess of the initial deposit
shall be required to reimburse the City for the additional expenses.
2. City staff reviews the application and completes the Application Review
Worksheet The Application and Application Review Worksheet is primarily
designed to score the desirability of an industrial project. Redevelopment and
Housing projects will be evaluated on a case-by-case basis and as the projects
meet the city's desired objectives.
3. Results of the Worksheet are submitted to the appropriate governing authorities
(EDA or HRA) fox recommendation to the City Council of approval or denial
of the request.
4. If preliminary approval is granted, the Tax Increment Financing Plan, along
with all necessary notices, resolutions axe prepared by City staff and/or
consultants.
5. Notices are published and sent to the county and school board.
6. Public hearing(s) on the proposed request axe held.
7. The City Council giants final approval or denial of the request.
City of Elk River
Tax Increment Policy & Application
1i0 Draft Modified Apri12006
Page 10 of 14
VII. APPLICATION FOR TAX INCREMENT FINANCING
A. APPLICANT INFORMATION
Name of
Address
Primary Contact
Address
Phone Fax Email
Brief description of the corporation/paxmership's business, including history, principal
product ox service:
Brief description of the proposed project:
Attorney Name
Address
Phone
Accountant Name
Contractor Name
Address
Phone
Engineer Name
Email
Architect Name
Address
Phone
Email
Fax Email
City of Elk River
Tax Increment Policy & Application
1~~ Dxafr Modified April 2006 Page 11 of 14
B. PROJECT INFORMATION
1. The project will be
Industrial Greenfield: New Coastmcfion
Commercial Redevelopment: _New Construction
-Industrial Redevelopment: _New Construction
Other
2. The project will be: -Owner Occupied Leased Space
3. Project Address
Legal Description & Parcel Identification Number(s)
Expansion
Rehabilitation
Rehabilitation
4. Site Plan and Preliminary Construction Plans Attached:
5. Amount of Tax Increment Requested fox:
Land Purchase
Public Improvement',
Site Improvement
6. Current Real Estate Taxes on Project Site: $
Estimated Real Estate Taxes upon Completion:
7. Construction Start Date:
Construction Completion Date:
If Phased Project:
Year % Completed
Year % Completed
C. PUBLIC PURPOSE
It is the policy of the City of Elk River that the use of Tax Increment Financing should
result in a benefit to the public. Please indicate how this project will serve a public
purpose.
Job Creation/Retention: Number of existing jobs
Number of jobs created by project
Average hourly wage of jobs created/retained
_New industrial development, which will result in additional private
investment in the area.
-Enhancement or diversification of the city's economic base.
-The project contributes to the fulfillment of the City's Economic Development
Strategic Plan.
-Removal of blight ox the rehabilitation of a high profile ox priority site.
_Sigrtificantly increase the City's tax base.
Other:
City of Elk River
Tax Increment Policy & Application
1`~ Draft Modified Apri12006
Yes No
Phase I $
Phase II $
Page 12 of 14
D. SOURCES & USES
SOURCES NAME
Bank Loan
Other Private Funds
Owner Cash Equity
Fed Grant/Loan
State Grant/Loan
EDA Micro Loan
Tax Increment
ID Bonds
TOTAL
USES
Land Acquisition
Site Development
Construction
Machinery & Equipment
Architectural & Engineering Fees
Legal Fees
Interest During Construction
Debt Service Reserve
Contingencies
TOTAL
City of Elk River
Tax Increment Policy & Application
1« Draft :Modified Apri12006
AMOUNT
AMOUNT
Page 13 of 14
E. ADDITIONAL DOCUMENTATION AND CHECKLIST
Applicants will also be required to provide the following documentation.
A) Written business plan, including a description of the business,
ownership/management, date established, products and services, and
future plans
B) Financial Statements fox Past Two Years
Profit & Loss Statement
Balance Sheet
C) Cuxxent Financial Statements
Profit & Loss Statement to Date
Balance Sheet to Date
D) Two Year Financial Projections
E) Personal Financial Statements of all Major Shareholders
Profit & Loss
Current Tax Return
F) Letter of Commitment from Applicant Pledging to Complete
During the Proposed Project Duration
G) Letter of Commitment from the Other Sources of Financing,
Stating Terms and Conditions of their Participation in
Project
H) Non-refundable application deposit of $10,000
I) Construction Plans and Itemized Project Construction Statement
J) Attach the followi
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
ng documentation as Exhibits
- Corporation/Partnership Description
-Description of Project
- List of Shareholders/Farmers
- But-For Analysis
- List of Prospective Lessees
- Legal Description and PID Numbex(s;
Note: All Major shareholders will be required to sign personal guarantees if up front
financing of the project is required.
The undersigned certifies that all information provided in this application is true and correct to the best of the
undersigned's knowledge. The undersigned authorizes the City of Elk River to check credit references and
verify fmancial and other information. The undersigned also agrees [o provide any additional information as
may be requested by the City after the filing of this application.
Applicant N
City of Elk River
Tax Increment Policy & Application
1"Draft Modified Apri12006
Page 14 of 14
VIII. SAMPLE BUT FOR ANALYSIS
WITH NO WITH
TAX INCREMENT TAX INCREMENT
SOURCES AND USES SOURCES AND USES
SOURCES SOURCES
Mortgage 9,600,000 8,667,000
Equity 2,400,000 2,400,00
Tax Increment Financing 0 933,000
TOTAL SOURCES 12,000,000 12,000,000
USES USES
Land 1,500,000 1,500,000
Site Work 300,000 300,000
Soil Correction 468,000 468,000
Demolition 100,000 100,000
Relocation 65,000 65,000
Subtotal Land Costs 2,433,000 2,433,000
Construction 6,750,000 6,750,000
Finish Manufacturing 250,000 250,000
Subtotal Construction Costs 7,000,000 7,000,000
Soh Costs 350,000 350,000
Taxes 35,000 35,000
Finance Fees 850,000 850,000
Project Manager 542,000 542,000
Developer Fee 540,000 540,000
Contingency 250,000 250,000
Subtotal Soft Costs 2,567,000 2,567,000
TOTAL USES 12,000,000 12,000,000
Income Statement Income Statement
Sq. Ft. Per Sq. Ft. Sq. Ft. Per Sq. Ft.
Rent-Space 1 100,000 $8.00 800,000 100,000 $8.00 800,000
Rent-Space 2 25,000 $8.50 212,500 25,000 $8.50 212,500
Rent-Space 3 25,000 $9.00 225,000 25,000 $9.00 225,000
Other 0 $0.00 0 0 $0.00 0
1,237,500 1,237,500
Mortgage 20 Term 1,051,646 20 Texm 949,439
9.00% Interest 9.00% Interest
9,600,000 Principal 8,667,000 Principal
Net Income 185,854 288,061
Total Remrn on Equity 7.74% 12.00%
City of Elk River
Tax Increment Policy & Application
1"Draft Modi&ed April 2006
Page 15 of 14
IX. TAX INCREMENT FINANCING APPLICATION REVIEW
WORKSHEET
TO BE COMPLETED BY CITY STAFF
1. The project meets the criteria set forth in Section IV of the City's Tax Increment
Financing policy.
a) Meets minimum thresholds fox size, value, and tax revenue.
b) Meets at least one of the objectives in Section II and satisfies
the provision set forth in Section III.
c) Demonstrates need fox TIF with the but for analysis.
e) Consistent with all city plans and ordinances.
f) Serves at least two public purposes as defined in Section IV.
2. Ratio of Private to All Public Investment in Project: Points:
$ Private investment 5:1 5
$ Public Investment 4:1 4
Ratio Private :Public Financing 3:1 3
2:1 2
Less than 2:1 1
3. Job Creation in the City of Elk River: Points:
Nutnbex of new jobs as a result of the project. 40+ 5
Number of existing/retained jobs divided by 10. 30+ 4
Total 20+ 3
10+ 2
Less than 10 1
4. Ratio of Public Investment to Job Creation: Points:
$ Public Investment $15,000 ox less 5
Number of new jobs created/retained $20,000 ox less 4
$ Public Investment per new job $22,000 ox less 3
$25,000 ox less 2
Over $25,000 1
5. Wage Level of new jobs created/retained: Points:
Mi nimum hourly wage Over $21 /hou r 5
of jobs created/retained: $18-21 /hoax 4
$14-17 /hour 3
$10-13 /hoax 2
Under $10 /hour 1
6. Project size: Points:
The project will result in the construction 80,000+ 5
of square feet 65,000+ 4
50,000+ 3
35,000+ 2
25,000+ 1
City of Elk River
Tax Increment Policy & Application
1" Draft Modified April 2006 Page 16 of 14
7. Market Value/Tax Base Generation:
The project will result in a per square foot
estimated market value (land and building)
of
8. Type of Project:
100% Owner Occupied
Mix Owner Occupied & Investment
Investment Property
8. Use:
Manufacturing
Research & Development
Commercial Redevelopment
W axehouse /Distribution
Housing
9. Likelihood that the project will result in
unsubsidized, spin-off development.
Points:
Industrial Commercial
$90/sf+ $110/sf+ 5
$80/sf+ $100/sf+ 4
$70/sf+ $90/sf+ 3
$60/sf+ $80/sf+ 2
$50/sf+ $70/sf+ 1
Points:
5
4
3
Points:
5
4
3
2
1
Points•
High 5
Moderate 3
Low 1
Sub -Total Points: of a possible 45 points.
10. Bonus Points
Bonus Points:
The project will be 100% Pay-aryougo TIF. 3 points
The project contributes to the goals of Energy City. 2 points
• Pxoduc[ promotes sensible use of energy, OR
• Project utilizes significant energy efficient design &/or
materials in construction.
Total Points:
Overall project analysis: High 45-38 points
Moderate 37-29 points
Low 28-20 points
Not Eligible 19-0 points
City of Elk River
Tax Increment Policy & tlpplication
1" Draft Modified Apri12006
Page 17 of 14