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5.1. HRSR 09-07-2004 ITEM # 5.1. • •/ City of Elk -�-� River MEMORANDUM TO: Housing & Redevelopment Authority FROM: Catherine Mehelich, Director of Economic Development DATE: September 7, 2004 SUBJECT: Consider Resolution Recommending to the City Council for the Establishment of a Downtown Phase I Tax Increment Financing District No. 22 and Adopting a Tax Increment Financing Plan Attachments • Tax Increment Financing District Overview • Tax Increment Financing Plan for the establishment of Downtown Phase I Tax Increment Financing District No. 22 (a redevelopment district) • • HRA Resolution Issue In June and July 2004 the HRA and City Council authorized staff and fiscal consultants to prepare a Tax Increment Financing (TIF) Plan for the establishment of a TIF District for the proposed MetroPlains Downtown Revitalization Project. The District will be a redevelopment tax increment Project. P financing district. Tax increments collected from the District will enable the City of Elk River to facilitate the redevelopment of the area,which includes a four story building with approximately 10,000 square feet of commercial space and 52 for-sale residential units on the Bluff Block. The Jackson Block includes a three story building with approximately 10,000 square feet of commercial space and 32 rental housing units. The proposed location of the District is indicated on the map within the attached Tax Increment Financing Plan. The Planning Commission has recently reviewed and determined that the tax increment financing plan conforms to the general plan for the development or redevelopment of the city as a whole. The City Council has scheduled a public hearing on the Tax Increment Financing Plan and business subsidy for September 20,2004, at approximately 6:30 P.M. It should be noted that the City's goals for this project are primarily redevelopment and the construction of housing. Job creation is not a goal of this project consequently after the public hearing it is recommended that the City set the wage and job goals in the business subsidy agreement at zero. Sid Inman of Ehlers &Associates will be at the HRA meeting to present the TIF Plan and answer • any questions. Ron Seymour of S.E.H., the firm that completed the redevelopment assessment report,will present the analysis of redevelopment qualifications for the area. Consider Recommendation for TIF District No.22 HRA Meeting September 7,2004 Page 2 of 2 • Recommendation The HRA is requested to provide a recommendation of the TIF Plan to the City Council for consideration. Staff recommends that the HRA consider adoption of the attached Resolution Recommending a Modification to the Development Program for Development District No. 1, Establishing Downtown Phase I Tax Increment Financing District No. 22 Therein and Adopting a Tax Increment Financing Plan Therefor. • H:\SHRDOC\Downtown Revitalization\TIF\hra recommendation.doc ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY CITY OF ELK RIVER • SHERBURNE COUNTY STATE OF MINNESOTA RESOLUTION NO. RESOLUTION RECOMMENDING A MODIFICATION TO THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 1, ESTABLISHING DOWNTOWN PHASE I TAX INCREMENT FINANCING DISTRICT NO.22 THEREIN AND ADOPTING A TAX INCREMENT FINANCING PLAN THEREFOR. WHEREAS,it has been recommended by the Board of Commissioners(the"Board")of the Elk River Housing and Redevelopment Authority (the "HRA") that the City adopt a Modification to the Development Program for Development District No. 1 (the"Development Program Modification")and establish Downtown Phase I Tax Increment Financing District No. 22 and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the Development Program Modification and the TIF Plan are referred to collectively herein as the"Program and Plan"),all pursuant to and in conformity with applicable law,including Minnesota Statutes,Sections 469.124 to 469.134,and Sections 469.174 to 469.1799, inclusive, as amended (the "Act"), all as reflected in the Program and Plan and presented for the Board's consideration; and WHEREAS,the City has investigated the facts relating to the Program and Plan and has caused the Program and Plan to be prepared; and WHEREAS, the City has performed all actions required by law to be performed prior to the adoption of the Program and Plan. The City has also requested the City Planning Commission to provide for review of and written comment on the Program and Plan and that the Council schedule a public hearing on the Program and Plan upon • published notice as required by law. NOW,THEREFORE,BE IT RESOLVED by the Board as follows: 1. The HRA hereby finds that Downtown Phase I Tax Increment Financing District No.22 is in the public interest and is a "redevelopment district" under Minnesota Statutes, Section 469.174, Subd. 10 (a), and finds that the adoption of the proposed Program and Plan conforms in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State of Minnesota which is already built up and that the adoption of the proposed Program and Plan will help provide employment opportunities,improve the tax base and improve the general economy of the State and thereby serves a public purpose. 2. The HRA further finds that the Program and Plan will afford maximum opportunity,consistent with the sound needs for the City as a whole,for the development or redevelopment of the project area by private enterprise in that the intent is to rovide only that public assistance necessary to make the private developments financially feasible. p Y P ry 3. The Program and Plan,as presented to the HRA on this date,are hereby approved and recommended to be established and adopted by the City Council. Approved by the Board of Commissioners of the Elk River Housing and Redevelopment Authority this day of , 2004. Chair, Stewart Wilson ATTEST: • Executive Director, Catherine Mehelich H:\SHRDOC\Downtown Revitalization\TIF\TIF Plan Docs\HRA recommending Res.doc • Ehlers and Associates Tax Increment Financing District Overview City of Elk River Downtown Phase I Tax Increment Financing District No. 22 Proposed action: Establishment of Downtown Phase I Tax Increment Financing District No. 22 and the adoption of the Tax Increment Financing Plan. Type of TIF District: A Redevelopment District Parcel Numbers: 75-405-0450 75-405-0470 75-405-0460 75-404-0141 75-404-0140 75-405-0310 Location: See the attached map Proposed The District is being created to facilitate the redevelopment of the area,which development: includes a four story building with approximately 10,000 square feet of commercial space and 52 for-sale residential units and a three story building with approximately 10,000 square feet of commercial space and 32 rental housing units in the City of Elk River. Estimated annual tax $198,606 • increment: Proposed uses: The TIF Plan contains the following budget: Land/Building Acquisition-Relocation and Demolition 2,590,000 Public Utilities(pooling, amount to Sac Wac) 690,000 Interest 3,820,000 Administrative Costs(up to 5%) 250,000 TOTAL $7,350,000 See Subsection 2-10, page 2-6 of the Plan for the full budget authorization. Additional uses of funds are authorized which include inter-fund loans and transfers and bonded indebtedness. Form of financing: A pay-as-you-go note and interfund loans are the primary form of financing. Maximum duration: The duration of the District will be 25 years after receipt of the first increment by the HRA or City(a total of 26 years of tax increment). The date of receipt by the City of the first tax increment is expected to be 2006. Thus, it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes,would terminate after 2031,or when the TIF Plan is satisfied. Administrative fee: Up to 10%of annual increment for eligible costs. TIF District Overview 3 Year Activity Rule At least one of the following activities must take place in the District within 3 0469.176 Subd la) years from the date of certification: bonds have been issued the authority has acquired property within the district the authority has constructed or caused to be constructed public improvements within the district The estimated date whereby this activity must take place is September 2007. 4 Year Activity Rule After four years from the date of certification of the District one of the (§469.176 Subd 6) following activities must have been commenced on each parcel in the District: demolition rehabilitation renovation other site preparation (not including utility services such as sewer and water) If the activity has not been started by the approximately September 2008, no additional tax increment may be taken from that parcel until the commencement of a qualifying activity 5 Year Rule Within 5 years of certification revenues derived from tax increments must be (§469.1763 Subd 3) expended or obligated to be expended. Tax increments are considered to have been expended on an activity within the District if one of the following occurs: the revenues are actually paid to a third party with respect to the activity bonds, the proceeds of which must be used to finance the activity, are • issued and sold to a third party,the revenues are spent to repay the bonds, and the proceeds of the bonds either are reasonably expected to be spent before the end of the later of(i)the five year period, or(ii) a reasonable temporary period within the meaning of the use of that term under §. 148(c)(1)of the Internal Revenue Code, or are deposited in a reasonably required reserve or replacement fund binding contracts with a third party are entered into for performance of the activity and the revenues are spent under the contractual obligation costs with respect to the activity are paid and the revenues are spent to reimburse a pay for payment of the costs, including interest on pY pY � g unreimbursed costs. Any obligations in the Tax Increment District made after approximately September 2009,will not be eligible for repayment from tax increments. The previous summary contains an overview of the basic elements of the proposed Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22. More detailed information on each of these topics can be found in the complete TIF Plan. Page 2 • TIF District Overview The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22,as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows: 1 Finding that Downtown Phase I Tax Increment Financing District No. 22 is a redevelopment district as defined in M.S., Section 469.174, Subd. 10(a). The District consists of 6 parcel(s),with plans to redevelop the area for commercial/residential purposes. At least 70 percent of the area in the District are occupied by buildings, streets,utilities,paved or gravel parking lots or other similar structures and more than 50 percent of the buildings in the District, not including outbuildings,are structurally substandard to a degree requiring substantial renovation or clearance (See Appendix D of the TIF plan). 2 Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of Downtown Phase I Tax Increment Financing District No. 22 permitted by the Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future:This finding is supported by the fact • that the redevelopment proposed in this plan meets the City s objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings,the limited amount of commercial/industrial property for expansion adjacent to the existing project,the incompatible land uses at close proximity, and the cost of financing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward without tax increment assistance(see attachment in Appendix H). The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the Plan: This finding is justified on the grounds that the cost of site acquisition, site and public improvements and utilities add to the total redevelopment cost. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance. Therefore, the City reasonably determines that no other redevelopment of similar scope is anticipated on this site without substantially similar assistance being provided to the development. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in the District,the total increase in market value would be up to$13,710,100. The present value of tax increments from the District is estimated to be$2,891,674. It is the Council's finding that no development with a market value of greater than$11,318,426 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition and public improvements in the general area of the District(see Cashflow in Appendix G of the TIF Plan). 4110 Page 3 • TIF District Overview 3. Finding that the Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No. 22 conforms to the general plan for the development or redevelopment of the municipality as a whole. The Planning Commission reviewed the Plan and found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No. 22 will afford maximum opportunity, consistent with the sound needs of the City as a whole,for the development or redevelopment of Development District No. 1 by private enterprise. The project to be assisted by the District will result in increased employment in the City and the State of Minnesota,the renovation of substandard properties,increased tax base of the State and add a high quality development to the City. The implementation of the Plan will also increase the availability of safe and decent life-cycle housing in the City. • • Page 4 • TIF District Overview MAP(S)OF THE PROJECT AND DISTRICT • 41 Page 5 H1,1 ,1t 1 .,i 1 i i 1 it ii i i, k/11J 1 i i,10 1 h f iii/ Jd i i --j; 'ti ill J ii 1 tt i I!iti "I -1 / """"7\ \ 1 414---'1„,i. .'. — It. ,, ,t - , t --/ ti , ' . ; / „... ;;-,...\,/t' • ..,,. ,,, „, __,.. I i -,..... (.....:1 __,. , -7 .._: / ,t,-,.--,---------;:. 1,1„ //i - ;,----;;-;;;,..- rre r trc;„.„,,,,,,,....- r..-- 4 -) *-- II '`-- ,.._ ..--- ..--- ' ; li ri , t _;,,,11,,..,,,,t7t,,,;;,;,.-,-;,f,-;`,.,, _..,...,.: - . i / i * P . .„.,,„ ---,.. 17" / 1 . .t r i - I ig / --ro''' ' / :2(''';',1'.'7,:--;e';''''..;'''',<;.:•-, IC'' . '..._ 1 , '''. / i._ ;11 , li* -i fic '-.",'",,L 1-.11 011 UVV1481111 RIVER V ...., , . 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Nr,. N - -- : -- . ......„.„.„*I__, -..,- ----- _„..4i, . - ''' \\.,IVNI'" '''\- . 11" "ii11111/MUIVAlit'll' l — Vlikk‘k '''',\ k J--! ---- ---- i-41 - -Ft- -I- 111111iiil , . ! ''. ' • — ' ' ' . 11 --- ,-.---:\ '• - ' k \ r— ■ '1... IIIIIIIIIIIIIIIIIIIIIIIrn - ,.. 1 .‘`;''- ; r 1 ..J TIF DISTRICT A ----.. I 1t .....i 166 0 1 (SEE INSET) ..... VA '-'''i,...! '''-‘• \ ',--- ! i -.. ,.., k \ t-•k. , -II'• I 1 The Boundaries of the Development District No. 1 -..,.. _ are Coterminous with the City Limits "\ , ,,, -.... ,,,,,,,,,.? _ : 1'1 _ ,,,. ,,,,_". .. , *44/., vitt . .,.-----;------',-;„` ::----,..„\ : ---,,,A,„ - - i 1 ---, , 1 '7 — River :,, , k — ;A: ` i '. Al& 1 I 1„ —----17:--- ''- . • 11 '''- „„, .._. ,,,.,.../ I- ! , ,:11)111:1W • ;EL ,--------- ; ! 11111 SHEET DATE: TIF DISTRICT 22 7/29/2004 ORAWN 8Y.: CA of (A REDEVELOPMENT DISTRICT) CML goal: ........, River ver NOT TO SCALE DEVELOPMENT DISTRICT NO. I • As of September 2, 2004 Draft for HRA and City Council Review MODIFICATION TO THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 1 and the TAX INCREMENT FINANCING PLAN for the establishment of DOWNTOWN PHASE I TAX INCREMENT FINANCING DISTRICT NO. 22 (a redevelopment district) • within DEVELOPMENT DISTRICT NO. 1 CITY OF ELK RIVER SHERBURNE COUNTY STATE OF MINNESOTA Public Hearing: September 20,2004 Adopted: EHLERS Prepared by: EHLERS&ASSOCIATES, INC. 0 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105 & ASSOCIATES INC 651-697-8500 fax: 651-697-8555 www.ehlers-inc.com • • TABLE OF CONTENTS (for reference purposes only) SECTION I - MODIFICATION TO THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 1 1-1 Foreword 1-1 SECTION II -TAX INCREMENT FINANCING PLAN FOR DOWNTOWN PHASE I TAX INCREMENT FINANCING DISTRICT NO. 22 2-1 Subsection 2-1. Foreword 2-1 Subsection 2-2. Statutory Authority 2-1 Subsection 2-3. Statement of Objectives 2-1 Subsection 2-4. Development Program Overview 2-1 Subsection 2-5. Description of Property in the District and Property To Be Acquired 2-2 Subsection 2-6. Classification of the District 2-2 Subsection 2-7. Duration of the District 2-4 Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements 2-4 Subsection 2-9. Sources of Revenue/Bonded Indebtedness 2-5 Subsection 2-10. Uses of Funds 2-6 Subsection 2-11. Business Subsidies 2-6 Subsection 2-12. County Road Costs 2-7 Subsection 2-13. Estimated Impact on Other Taxing Jurisdictions 2-8 Subsection 2-14. Supporting Documentation 2-8 • Subsection 2-15. Definition of Tax Increment Revenues 2-9 Subsection 2-16. Modifications to the District 2-9 Subsection 2-17. Administrative Expenses 2-10 Subsection 2-18. Limitation of Increment 2-10 Subsection 2-19. Use of Tax Increment 2-11 Subsection 2-20. Excess Increments 2-12 Subsection 2-21. Requirements for Agreements with the Developer 2-12 Subsection 2-22. Assessment Agreements 2-12 Subsection 2-23. Administration of the District 2-13 Subsection 2-24. Annual Disclosure Requirements 2-13 Subsection 2-25. Reasonable Expectations 2-13 Subsection 2-26. Other Limitations on the Use of Tax Increment 2-13 Subsection 2-27. Summary 2-14 APPENDIX A PROJECT DESCRIPTION A-1 APPENDIX B MAP(S) OF DEVELOPMENT DISTRICT NO. 1 AND THE DISTRICT B-1 APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT C-1 APPENDIX D REDEVELOPMENT QUALIFICATIONS FOR THE DISTRICT D-1 • APPENDIX E PRIOR PLANNED IMPROVEMENTS E-1 • APPENDIX F MINNESOTA BUSINESS ASSISTANCE FORM F-1 APPENDIX G ESTIMATED CASH FLOW FOR THE DISTRICT G-1 APPENDIX H BUT/FOR QUALIFICATIONS H-1 • S • SECTION I-MODIFICATION TO THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO. 1 Foreword The following text represents a Modification to the Development Program for Development District No. 1. This modification represents a continuation of the goals and objectives set forth in the Development Program for Development District No. 1. Generally,the substantive changes include the establishment of Downtown Phase I Tax Increment Financing District No.22. For further information, a review of the Development Program for Development District No. 1 is recommended. It is available from the City Administrator at the City of Elk River. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within Development District No. 1. • 41110 City of Elk River Modification to the Development Program for Development District No.1 1-1 • SECTION II- TAX INCREMENT FINANCING PLAN FOR DOWNTOWN PHASE I TAX INCREMENT FINANCING DISTRICT NO. 22 Subsection 2-1. Foreword The City of Elk River(the"City"),staff and consultants have prepared the following information to expedite the establishment of Downtown Phase I Tax Increment Financing District No. 22 (the "District"), a redevelopment tax increment financing district, located in Development District No. 1. Subsection 2-2. Statutory Authority Within the City, there exists areas where public involvement is necessary to cause development or redevelopment to occur. To this end,the City has certain statutory powers pursuant to Minnesota Statutes ("MS.'), Sections 469.124 to 469.134, inclusive, as amended, and M.S., Sections 469.174 to 469.1799, inclusive,as amended(the"Tax Increment Financing Act"or"TIF Act"),to assist in financing public costs related to this project. This section contains the Tax Increment Financing Plan (the "TIF Plan") for Downtown Phase I Tax Increment Financing District No. 22. Other relevant information is contained in the Modification to the Development Program for Development District No. 1. Subsection 2-3. Statement of Objectives The District currently consists of 6 parcels of land and adjacent and internal abutting roadways. The District is being created to facilitate the redevelopment of the area, which includes a four story building with • approximately 10,000 square feet of commercial space and 52 for-sale residential units and a three story building with approximately 10,000 square feet of commercial space and 32 rental housing units in the City of Elk River. See the Project Description in Appendix A for more detail. Contracts for this have not been entered into at the time of preparation of this TIF Plan,but development is likely to occur in 2005. This TIF Plan is expected to achieve many of the objectives outlined in the Development Program for Development District No. 1. The activities contemplated in the Modification to the Development Program and the TIF Plan do not preclude the undertaking of other qualified development or redevelopment activities. These activities are anticipated to occur over the life of Development District No. 1 and the District. Subsection 2-4. Development Program Overview 1. Property to be Acquired-Selected property located within the District may be acquired by the City and is further described in this TIF Plan. 2. Relocation- Relocation services, to the extent required by law, are available pursuant to M.S., Chapter 117 and other relevant state and federal laws. 3. Upon approval of a developer's plan relating to the project and completion of the necessary legal requirements,the City may sell to a developer selected properties that it may acquire within the District or may lease land or facilities to a developer. 4. The City may perform or provide for some or all necessary acquisition, construction, relocation,demolition,and required utilities and public streets work within the District. el° City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-1 • Subsection 2-5. Description of Property in the District and Property To Be Acquired The District encompasses all property and abutting roadways identified by the parcels listed below. See the map in Appendix B for further information on the location of the District and Appendix C for a description of the property. Parcel Numbers 75-405-0450 75-405-0460 75-404-0140 75-405-0470 75-404-0141 75-405-0310 The City may acquire any parcel within the District including interior and adjacent street rights of way. Any properties identified for acquisition will be acquired by the City only in order to accomplish one or more of the following:storm sewer improvements;provide land for needed public streets,utilities and facilities;carry out land acquisition,site improvements,clearance and/or development to accomplish the uses and objectives set forth in this plan. The City may acquire property by gift, dedication,condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition and related costs. Subsection 2-6. Classification of the District • The City, in determining the need to create a tax increment financing district in accordance with M.S., Sections 469.174 to 469.1799, as amended, inclusive, find that the District, to be established, is a redevelopment district pursuant to M.S., Section 469.174, Subd. 10(a)(1) as defined below: (a) "Redevelopment district"means a type of tax increment financing district consisting of a project, or portions of a project, within which the authority finds by resolution that one or more of the following conditions, reasonably distributed throughout the district, exists: (1) parcels consisting of 70 percent of the area in the district are occupied by buildings,streets, utilities,paved or gravel parking lots or other similar structures and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance; (2) The property consists of vacant, unused, underused, inappropriately used, or infrequently used rail yards, rail storage facilities or excessive or vacated railroad rights-of-way; (3) tankfacilities,or property whose immediately previous use was for tank facilities,as defined in Section 115C, Subd. 15, if the tank facility: (i) have or had a capacity of more than one million gallons; (ii) are located adjacent to rail facilities; or (iii)have been removed, or are unused, underused, inappropriately used or infrequently used; or (4) a qualifying disaster area, as defined in Subd. 10b. (b) For purposes of this subdivision, "structurally substandard"shall mean containing defects in • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-2 • structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation,fire protection including adequate egress,layout and condition of interiorpartitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance. (c) A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs or other similar reliable evidence. The municipality may not make such a determination without an interior inspection of the property, but need not have an independent, expert appraisal prepared of the cost of repair and rehabilitation of the building. An interior inspection of the property is not required, if the municipality finds that(1)the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the party that owns or controls the property;and(2)the evidence otherwise supports a reasonable conclusion that the building is structurally substandard (d) A parcel is deemed to be occupied by a structurally substandard building for purposes of the finding under paragraph (a) if all of the following conditions are met: (1) the parcel was occupied by a substandard building within three years of the filing of the request for certification of the parcel as part of the district with the county auditor; • (2) the substandard building was demolished or removed by the authority or the demolition or removal was financed by the authority or was done by a developer under a development agreement with the authority; (3) the authority found by resolution before the demolition or removal that the parcel was occupied by a structurally substandard building and that after demolition and clearance the authority intended to include the parcel within a district; and (4) upon filing the request for certification of the tax capacity of the parcel as part of a district, the authority notifies the county auditor that the original tax capacity of the parcel must be adjusted as provided by§469.177, subdivision 1,paragraph (f). (e) For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities,paved or gravel parking lots or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities,paved or gravel parking lots or other similar structures. (f) For districts consisting of two or more noncontiguous areas, each area must qualify as a redevelopment district under paragraph(a)to be included in the district, and the entire area of the district must satisfy paragraph (a). In meeting the statutory criteria the City relies on the following facts and findings: • • The District is a redevelopment district consisting of 6 parcels. • • An inventory shows that parcels consisting of more than 70 percent of the area in the District are occupied by buildings, streets,utilities,paved or gravel parking lots or other similar structures. • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-3 • • • An inspection of the buildings located within the District finds that more than 50 percent of the buildings are structurally substandard as defined in the TIF Act. (See Appendix D). Pursuant to M.S., Section 469.176 Subd. 7,the District does not contain any parcel or part of a parcel that qualified under the provisions ofMS.,Section 273.111 or 273.112 or Chapter 473Hfor taxes payable in any of the five calendar years before the filing of the request for certification of the District. Subsection 2-7. Duration of the District Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1,the duration of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1 b,the duration of the District will be 25 years after receipt of the first increment by the City(a total of 26 years of tax increment). The date of receipt by the City of the first tax increment is expected to be 2006. Thus,it is estimated that the District, including any modifications of the TIF Plan for subsequent phases or other changes,would terminate after 2031,or when the TIF Plan is satisfied.The City reserves the right to decertify the District prior to the legally required date. Subsection 2-8. Original Tax Capacity,Tax Rate and Estimated Captured Net Tax Capacity Value/Increment and Notification of Prior Planned Improvements Pursuant to MS.,Section 469.174,Subd. 7 and MS.,Section 469.177,Subd.1,the Original Net Tax Capacity (ONTC)as certified for the District will be based on the market values placed on the property by the assessor in 2004 for taxes payable 2005. • Pursuant to M.S., Section 469.177,Subds. 1 and 2,the County Auditor shall certify in each year(beginning in the payment year 2005)the amount by which the original value has increased or decreased as a result of: 1. Change in tax exempt status of property; 2. Reduction or enlargement of the geographic boundaries of the district; 3. Change due to adjustments,negotiated or court-ordered abatements; 4. Change in the use of the property and classification; 5. Change in state law governing class rates;or 6. Change in previously issued building permits. In any year in which the current Net Tax Capacity(NTC)value of the District declines below the ONTC,no value will be captured and no tax increment will be payable to the City. The original local tax rate for the District will be the local tax rate for taxes payable 2005, assuming the request for certification is made before June 30,2005. The ONTC and the Original Local Tax Rate for the District appear in the table on the following page.The Original Local Tax Rate is based on actual Pay 2004 figures because the Pay 2005 rate was unavailable at the time this TIF Plan was prepared. Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated Captured Net Tax Capacity(CTC)of the District,within Development District No. 1, upon completion of the project,will annually approximate tax increment revenues as shown in the table on the following page. The City requests 100 percent of the available increase in tax capacity for repayment of its obligations and current expenditures,beginning in the tax year payable 2006. The Project Tax Capacity(PTC)listed is an estimate of values when the project is completed. • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-4 • Project Estimated Tax Capacity upon Completion(PTC) 171,150 Original Estimated Net Tax Capacity(ONTC) 9,305 Estimated Captured Tax Capacity(CTC) 161,845 Original Local Tax Rate 1.22714 Pay 2004 Estimated Annual Tax Increment(CTC x Local Tax Rate) 198,606 Percent Retained by the City 100% Pursuant to M.S., Section 469.177, Subd. 4, the City shall, after a due and diligent search, accompany its request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S., Section 469.175, Subd. 4,with a listing of all properties within the District or area of enlargement for which building permits have been issued during the eighteen(18)months immediately preceding approval of the TIF Plan by the municipality pursuant to M.S.,Section 469.175, Subd. 3. The County Auditor shall increase the original net tax capacity of the District by the net tax capacity of improvements for which a building permit was issued. The City has reviewed the area to be included in the District and found that some building permits have been issued in the past 18 months,but none that should increase the original tax capacity. Please see Appendix E for the building permits that were issued. Subsection 2-9. Sources of Revenue/Bonded Indebtedness • Public improvement costs,acquisition,relocation,utilities,parking facilities,streets and sidewalks,and site preparation costs and other costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax increments. The City reserves the right to use other sources of revenue legally applicable to the City and the TIF Plan,including,but not limited to,special assessments,general property taxes,state aid for road maintenance and construction, proceeds from the sale of land, other contributions from the developer and investment income,to pay for the estimated public costs. The City reserves the right to incur bonded indebtedness or other indebtedness as a result of the TIF Plan. As presently proposed,the project will be financed by a pay-as-you-go note and interfund loans. Based on an analysis of need,the City may provide additional assistance to the redeveloper by reducing their SAC and WAC charges and may reduce the sale price of land it is providing for the development. It is the Cities intent to pay itself back for these advances from tax increment from the district. Additional indebtedness may be required to finance other authorized activities. The total principal amount of bonded indebtedness,including a general obligation(GO)TIF bond,or other indebtedness related to the use of tax increment financing will not exceed$7,000,000 without a modification to the TIF Plan pursuant to applicable statutory requirements. It is estimated that$7,000,000 in bonded indebtedness will be financed with tax increment revenues. This provision does not obligate the City to incur debt. The City will issue bonds or incur other debt only upon the determination that such action is in the best interest of the City. The City may also finance the ac- tivities to be undertaken pursuant to the TIF Plan through loans from funds of the City or to reimburse the developer on a"pay-as-you-go"basis for eligible costs paid for by a developer. The estimated sources of funds for the District are contained in the table on the following page. • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-5 • SOURCES OF FUNDS TOTAL Tax Increment $7,350,000 PROJECT REVENUES $7,350,000 Subsection 2-10. Uses of Funds Currently under consideration for the District is a proposal to facilitate the redevelopment of the area,which includes a four story building with approximately 10,000 square feet of commercial space and 52 for-sale residential units and a three story building with approximately 10,000 square feet of commercial space and 32 rental housing units. The City has determined that it will be necessary to provide assistance to the project for certain costs. The City has studied the feasibility of the development or redevelopment of property in and around the District. To facilitate the establishment and development or redevelopment of the District,this TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is outlined in the following table. USES OF FUNDS TOTAL Land/Building Acquisition-Demolition and Relocation $2,590,000 Public Utilities(pooling,amount to Sac Wac) $690,000 Interest $3,820,000 Administrative Costs(up to 5%) $250,000 • PROJECT COSTS TOTAL $7,350,000 The above budget is organized according to the Office of State Auditor(OSA)reporting forms. It is estimated that the cost of improvements, including administrative expenses which will be paid or financed with tax increments,will equal$7,350,000 as is presented in the budget above. Estimated costs associated with the District are subject to change among categories without a modification to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed, without formal modification,the budget above pursuant to the applicable statutory requirements. Pursuant to M.S.,Section 469.1763,Subd. 2,no more than 25 percent of the tax increment paid by property within the District will be spent on activities related to development or redevelopment outside of the District but within the boundaries of Development District No. I,(including administrative costs,which are considered to be spent outside of the District)subject to the limitations as described in this TIF Plan. Subsection 2-11. Business Subsidies Pursuant to M.S. Sections 1161993, Subd. 3,the following forms of financial assistance are not considered a business subsidy: (1) A business subsidy of less than$25,000; (2) Assistance that is generally available to all businesses or to a general class of similar businesses,such as a line of business, size, location,or similar general criteria; (3) Public improvements to buildings or lands owned by the state or local government that serve a public purpose and do not principally benefit a single business or defined group of businesses at the time the improvements are made; City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-6 • (4) Redevelopment property polluted by contaminants as defined in M.S., Section 1161552, Subd. 3; (5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code and assistance provided for designated historic preservation districts,provided that the assistance is equal to or less than 50%of the total cost; (6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to provide those services; (7) Assistance for housing; (8) Assistance for pollution control or abatement, including assistance for a tax increment financing hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23; (9) Assistance for energy conservation; (10) Tax reductions resulting from conformity with federal tax law; (11) Workers'compensation and unemployment compensation; (12) Benefits derived from regulation; (13) Indirect benefits derived from assistance to educational institutions; (14) Funds from bonds allocated under chapter 474A,bonds issued to refund outstanding bonds, and bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal Revenue Code of 1986,as amended through December 31, 1999; (15) Assistance for a collaboration between a Minnesota higher education institution and a business; (16) Assistance for a tax increment financing soils condition district as defined under M.S., Section 469.174, Subd. 19; (17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value; (18) General changes in tax increment financing law and other general tax law changes of a principally technical nature. (19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local • government agency; (20) Funds from dock and wharf bonds issued by a seaway port authority; (21) Business loans and loan guarantees of$75,000 or less;and (22) Federal loan funds provided through the United States Department of Commerce,Economic Development Administration. The City will comply with M.S., Section 1161993 to 1161994 to the extent the tax increment assistance under this TIF Plan does not fall under any of the above exemptions. See Appendix F for the Minnesota Business Assistance Form. Subsection 2-12. County Road Costs Pursuant to M.S., Section 469.175, Subd. la,the county board may require the City to pay for all or part of the cost of county road improvements if the proposed development to be assisted by tax increment will,in the judgement of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs and if the road improvements are not scheduled within the next five years under a capital improvement plan or within five years under another county plan. If the county elects to use increments to improve county roads,it must notify the City within forty-five days of receipt of this TIF Plan. The TIF Plan was forwarded to the county 45 days prior to the public hearing. The City is aware that the county could claim that tax increment should be used for county roads,even after the public hearing. City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-7 • Subsection 2-13. Estimated Impact on Other Taxing Jurisdictions The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF Plan would occur without the creation of the District. However, the City has determined that such development or redevelopment would not occur "but for" tax increment financing and that, therefore, the fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as follows if the"but for"test was not met: IMPACT ON TAX BASE 2003/2004 Estimated Captured Total Net Tax Capacity(CTC) Percent of CTC Tax Capacity Upon Completion to Entity Total Sherburne County 61,339,933 161,845 0.2638% City of Elk River 14,994,764 161,845 1.0793% ISD No. 728 21,876,035 161,845 0.7398% IMPACT ON TAX RATES 2003/2004 Percent Potential Extension Rates of Total CTC Taxes • Sherburne County 0.444050 36.19% 161,845 71,867 City of Elk River 0.437820 35.68% 161,845 70,859 ISD No. 728 0.309530 25.22% 161,845 50,096 Other 0.035740 2.91% 161.845 5,784 Total 1.227140 100.00% 198,606 The estimates listed above display the captured tax capacity when all construction is completed. The tax rate used for calculations is the actual 2003/Pay 2004 rate. The total net capacity for the entities listed above are based on actual Pay 2004 figures. The District will be certified under the actual 2004/Pay 2005 rates,which were unavailable at the time this TIF Plan was prepared. Subsection 2-14.Supporting Documentation Pursuant to M.S. Section 469.175 Subd 1, clause 7 the TIF Plan must contain identification and description of studies and analyses used to make the determination set forth in M.S. Section 469.175 Subd 3, clause(2) and the findings are required in the resolution approving the TIF district. Following is a list of reports and studies on file at the City that support the Authority's findings: • Public Comment Summary • Historic Context Study Summary • Housing Plan Summary 2001-2005 • Market Potential Analysis Summary 2000-2010 • Zoning Information for Downtown District • Downtown Revitalization Project Planning&Project History • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-8 • • Redevelopment Eligibility Assessment:Proposed"Downtown Revitalization Project"Redevelopment Area-by SEH July 14, 2003 • Traffic Counts- 1999 • TIF Application • Downtown Riverfront Revitalization Q&A Newsletters Subsection 2-15. Definition of Tax Increment Revenues Pursuant to M.S., Section 469.174,Subd. 25,tax increment revenues derived from a tax increment financing district include all of the following potential revenue sources: 1. Taxes paid by the captured net tax capacity,but excluding any excess taxes,as computed under M.S., Section 469.177; 2. The proceeds from the sale or lease of property,tangible or intangible,purchased by the Authority with tax increments; 3. Principal and interest received on loans or other advances made by the Authority with tax increments; and 4. Interest or other investment earnings on or from tax increments. Subsection 2-16. Modifications to the District In accordance with M.S., Section 469.175, Subd. 4,any: 1. Reduction or enlargement of the geographic area of Development District No. 1 or the District,if the • reduction does not meet the requirements of M.S., Section 469.175, Subd. 4(e); 2. Increase in amount of bonded indebtedness to be incurred; 3. A determination to capitalize interest on debt if that determination was not a part of the original TIF Plan,or to increase or decrease the amount of interest on the debt to be capitalized; 4. Increase in the portion of the captured net tax capacity to be retained by the City; 5. Increase in the estimate of the cost of the project,including administrative expenses,that will be paid or financed with tax increment from the District;or 6. Designation of additional property to be acquired by the City,shall be approved upon the notice and after the discussion,public hearing and findings required for approval of the original TIF Plan. Pursuant to M.S.Section 469.175 Subd. 4(f),the geographic area of the District may be reduced,but shall not be enlarged after five years following the date of certification of the original net tax capacity by the county auditor. If a redevelopment district is enlarged,the reasons and supporting facts for the determination that the addition to the district meets the criteria of M.S.,Section 469.174, Subd. 10,paragraph(a),clauses(1)to (5),must be documented in writing and retained. The requirements of this paragraph do not apply if(1)the only modification is elimination of parcel(s)from Development District No. 1 or the District and(2)(A)the current net tax capacity of the parcel(s)eliminated from the District equals or exceeds the net tax capacity of those parcel(s)in the District's original net tax capacity or(B)the City agrees that,notwithstanding M.S., Section 469.1 77, Subd. 1,the original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s)eliminated from the District. The City must notify the County Auditor of any modification that reduces or enlarges the geographic area of Development District No. 1 or the District. Modifications to the District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF Plan. • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-9 • Subsection 2-17.Administrative Expenses In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the City,other than: 1. Amounts paid for the purchase of land; 2. Amounts paid to contractors or others providing materials and services,including architectural and engineering services, directly connected with the physical development of the real property in the project; 3. Relocation benefits paid to or services provided for persons residing or businesses located in the project;or 4. Amounts used to pay principal or interest on, fund a reserve for,or sell at a discount bonds issued pursuant to M.S., Section 469.178;or 5. Amounts used to pay other financial obligations to the extent those obligations were used to finance costs described in clauses(1)to(3). For districts for which the request for certification were made before August 1, 1979,or after June 30, 1982, administrative expenses also include amounts paid for services provided by bond counsel,fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section 469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause (1), from the District, whichever is less. Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual • administrative expenses incurred in connection with the District. The county may require payment of those expenses by February 15 of the year following the year the expenses were incurred. Pursuant to M.S., Section 469. 177, Subd. 11,the County Treasurer shall deduct an amount(currently .36 percent)of any increment distributed to the City and the County Treasurer shall pay the amount deducted to the State Treasurer for deposit in the state general fund to be appropriated to the State Auditor for the cost of financial reporting of tax increment financing information and the cost of examining and auditing authorities'use of tax increment financing. This amount may be adjusted annually by the Commissioner of Revenue. Subsection 2-18. Limitation of Increment Pursuant to M.S., Section 469.176, Subd. la,no tax increment shall be paid to the City for the District after three(3)years from the date of certification of the Original Net Tax Capacity value of the taxable property in the District by the County Auditor unless within the three(3)year period: (1) Bonds have been issued in aid of the project containing the District pursuant to M.S.,Section 469.178,or any other law,except revenue bonds issued pursuant to M.S., Sections 469.152 to 469.165,or (2) The City has acquired property within the District,or (3) The City has constructed or caused to be constructed public improvements within the District. • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-10 • The bonds must be issued,or the City must acquire property or construct or cause public improvements to be constructed by approximately September,2007 and report such actions to the County Auditor. The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or redemption date. Pursuant to M.S., Section 469.176, Subd. 6: if, after four years from the date of certification of the original net tax capacity of the tax increment financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation or renovation of property or other site preparation, including qualified improvement of a street adjacent to a parcel but not installation of utility service including sewer or water systems, has been commenced on a parcel located within a tax increment financing district by the authority or by the owner of the parcel in accordance with the tax increment financing plan,no additional tax increment may be taken from that parcel and the original net tax capacity of that parcel shall be excluded from the original net tax capacity of the tax increment financing district. If the authority or the owner of the parcel subsequently commences demolition, rehabilitation or renovation or other site preparation on that parcel including qualified improvement of a street adjacent to that parcel, in accordance with the tax increment financing plan, the authority shall certify to the county auditor that the activity has commenced and the county auditor shall certify the net tax capacity thereofas most recently certified by the commissioner of revenue and add it to the original net tax capacity of the tax increment financing district. The county auditor must enforce the provisions of this subdivision. The authority must submit to the county auditor evidence that the required activity has taken place for each parcel in the district. The evidence for a parcel must be submitted by February 1 of the fifth year following the year in which the parcel was certified as included in the district.For purposes of this subdivision, qualified improvements of a street are limited to (1) construction or opening of a new street, (2) relocation of a street, and(3)substantial reconstruction or rebuilding of an existing street. The City or a property owner must improve parcels within the District by approximately September,2008 and report such actions to the County Auditor. Subsection 2-19. Use of Tax Increment The City hereby determines that it will use 100 percent of the captured net tax capacity of taxable property located in the District for the following purposes: 1. To pay the principal of and interest on bonds issued to finance a project; 2. to finance,or otherwise pay public redevelopment costs of the Development District No. 1 pursuant to the M.S., Sections 469.001 to 469.047; 3. To pay for project costs as identified in the budget set forth in the TIF Plan; 4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4; 5. To pay principal and interest on any loans,advances or other payments made to or on behalf of the City or for the benefit of Development District No. 1 by a developer; 6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to M.S., Chapter 462C. M.S., Sections 469.152 through 469.165,and/or M.S., Sections 469.178; and 7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152 • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-11 through 469.165,and/or M.S., Sections 469.178. These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other purposes prohibited by M.S., Section 469.176, Subd. 4. Tax increments generated in the District will be paid by Sherburne County to the City for the Tax Increment Fund of said District. The City will pay to the developer(s)annually an amount not to exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public improvements, demolition and relocation,site preparation,and administration. Remaining increment funds will be used for City administration and the costs of public improvement activities outside the District. Subsection 2-20. Excess Increments Excess increments,as defined in M.S., Section 469.176, Subd. 2,shall be used only to do one or more of the following: 1. Prepay any outstanding bonds; 2. Discharge the pledge of tax increment for any outstanding bonds; 3. Pay into an escrow account dedicated to the payment of any outstanding bonds;or 4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in proportion to their local tax rates. In addition,the City may,subject to the limitations set forth herein,choose to modify the TIF Plan in order to finance additional public costs in Development District No. 1 or the District. • Subsection 2-21. Requirements for Agreements with the Developer The City will review any proposal for private development to determine its conformance with the Development Program and with applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: site plan, construction, mechanical, and electrical system drawings,landscaping plan,grading and storm drainage plan,signage system plan,and any other drawings or narrative deemed necessary by the City to demonstrate the conformance ofthe development with City plans and ordinances. The City may also use the Agreements to address other issues related to the development. Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be acquired in the District as set forth in the TIF Plan shall at any time be owned by the City as a result of acquisition with the proceeds of bonds issued pursuant to M.S.,Section 469.178 to which tax increments from property acquired is pledged, unless prior to acquisition in excess of 25 percent of the acreage, the City concluded an agreement for the development or redevelopment of the property acquired and which provides recourse for the City should the development or redevelopment not be completed. Subsection 2-22.Assessment Agreements Pursuant to M.S., Section 469.177, Subd. 8, the City may enter into a written assessment agreement in recordable form with the developer of property within the District which establishes a minimum market value of the land and completed improvements for the duration of the District. The assessment agreement shall be presented to the County Assessor who shall review the plans and specifications for the improvements to be constructed,review the market value previously assigned to the land upon which the improvements are to be constructed and,so long as the minimum market value contained in the assessment agreement appears,in the • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-12 judgment of the assessor,to be a reasonable estimate,the County Assessor shall also certify the minimum market value agreement. Subsection 2-23.Administration of the District Administration of the District will be handled by the City Administrator. Subsection 2-24.Annual Disclosure Requirements Pursuant to M.S., Section 469.175, Subd. 5, 6, and 6b the City must undertake financial reporting for all tax increment financing districts to the Office of the State Auditor,County Board,County Auditor and School Board on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement shall be published in a newspaper of general circulation in the City on or before August 15. If the City fails to make a disclosure or submit a report containing the information required by M.S., Section 469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax increment from the District. Subsection 2-25. Reasonable Expectations As required by the TIF Act,in establishing the District,the determination has been made that the anticipated development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax • increments for the maximum duration of the District permitted by the TIF Plan. In making said determination,reliance has been placed upon written representation made by the developer to such effects and upon City staff awareness of the feasibility of developing the project site. A comparative analysis of estimated market values both with and without establishment of the District and the use of tax increments has been performed as described above. Such analysis is included with the cashflow in Appendix G, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions)exceeds the estimated market value of the site absent the establishment of the District and the use of tax increments. Subsection 2-26. Other Limitations on the Use of Tax Increment 1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF Plan. The revenues shall be used to finance, or otherwise pay public redevelopment costs of the Development District No. 1 pursuant to the M.S.,Sections 469.001 to 469.047.Tax increments may not be used to circumvent existing levy limit law. No tax increment may be used for the acquisition, construction,renovation,operation,or maintenance of a building to be used primarily and regularly for conducting the business of a municipality,county,school district,or any other local unit of government or the state or federal government.This provision does not prohibit the use of revenues derived from tax increments for the construction or renovation of a parking structure. 2. Pooling Limitations. At least 75 percent of tax increments from the District must be expended on activities in the District or to pay bonds,to the extent that the proceeds of the bonds were used to finance activities within said district or to pay,or secure payment of,debt service on credit enhanced bonds. Not more than 25 percent of said tax increments may be expended,through a development fund or otherwise, on activities outside of the District except to pay,or secure payment of,debt service on credit enhanced • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-13 • bonds. For purposes of applying this restriction,all administrative expenses must be treated as if they were solely for activities outside of the District. 3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall be deemed to have satisfied the 75 percent test set forth in paragraph(2)above only if the five year rule set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year following certification of the District, 75 percent of said tax increments that remain after expenditures permitted under said five year rule must be used only to pay previously committed expenditures or credit enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. 5. 4. Redevelopment District. At least 90 percent of the revenues derived from tax increment from a redevelopment district must be used to finance the cost of correcting conditions that allow designation of redevelopment and renewal and renovation districts under M.S.,Section 469.176 Subd. 4j. These costs include, but are not limited to, acquiring properties containing structurally substandard buildings or improvements or hazardous substances,pollution,or contaminants,acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of the land,the removal of hazardous substances or remediation necessary for development of the land,and installation of utilities,roads,sidewalks,and parking facilities for the site. The allocated administrative expenses of the City,including the cost of preparation of the development action response plan,may be included in the qualifying costs. Subsection 2-27. Summary The City of Elk River is establishing the District to preserve and enhance the tax base,redevelop substandard areas, and provide employment opportunities in the City. The TIF Plan for the District was prepared by • Ehlers&Associates,Inc.,3060 Centre Pointe Drive,Roseville,Minnesota 55113,telephone(651)697-8500. • City of Elk River Tax Increment Financing Plan for Downtown Phase I Tax Increment Financing District No.22 2-14 • APPENDIX A PROJECT DESCRIPTION Tax Increment Financing District No. 22 is being established to facilitate the redevelopment of the Bluff Block and Jackson Block in downtown Elk River. The project is part of the Downtown Revitalization Project,with the primary goal being to assume the long-term viability of downtown by making a connection to the rest of the community and by utilizing the riverfront location. The redevelopment will enhance downtown Elk River's role as a residential, retail and commercial area and revitalize investment in the downtown business district. The Bluff Block Development will include 10,000 square feet of commercial development on the first floor along Main Street and 52 units of for-sale housing above the commercial. The development will also include 70-80 below grade parking stalls for the housing and commercial residents. The Jackson Block Development will also include 10,000 square feet of commercial development on the first floor along Jackson Street and at the corner of Jackson and Main. Above the commercial development will be 32 units of 1-and 2-bedroom rental housing. The development will also include up to 52 below grade parking units for housing and commercial residents. • • APPENDIX A-1 • APPENDIX B MAP(S)OF DEVELOPMENT DISTRICT NO. 1 AND THE DISTRICT i • APPENDIX B-1 ; 1 i il i 4 J i Ili f i H J,...t: l! t .... , ,,...,..._ r____-...,...- i • illitieli / , .!,. ,,...'' c- , i,',/ _ -i .. --\/ ". \,.../ ii. i fsli.0. 4 • I , '',-,.... , ...... ,,_. ____, ,,7 • , ,1'..,'-'-'.;;;?'-;-----, 144'49 — ---• [ 11 I :17 ..,..,* .. I fl ii 1 - , . '41' .5'...,' /;;;•4;; ;;; .. ,,,,. -..,-- - --.5-----,,,,-----,---;.---------- , ,- ,.- • -. - ...,„. i, A. 41114,:# -,. .... MISSISSIM RATA I V xi• 1 i1 , zw4 \ -t –- ,......, „„,.._ - _ •-,, ,, „-.._,,, - _ 11, ' -..._ — i I (1,--- loll ---1-r--- II- . .. - -- .46%;t:tsitt ' 00:4: .. ..(..... :it ' '-ii' - "- - ' ------- "2._ '', .:,Vrklii„. .: ., ' j k 'r..... '-2 --'1 — _ . --140...46,..A``.\ • - 's- -0- "1,--. z/f LI _ . . - : . a . , '. , •,, • 1 ..). - ,.„. ._ • i 1...•. 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ItyopLmimenitts b District No. 1 1-:•,.•,:.,z ' 1 are T heCoterminous with t Development 1 i ,,. --s- 11' , , River ' .41k ,..../ 1 4 t I i IMI I I ' 111 ;i tit / titi 0 TIF DISTRICT omt: 7/29/2004 SHEET PRAWN B. 3 TSscut: Cir __ (A REDEVELOPMENT PI fifty, TCDI. 1 22 DISTRICT) ....NOT TO SCALE River DEVELOPMENT DISTRI CT I N O • APPENDIX C DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT The District encompasses all property and adjacent rights-of-way identified by the parcels listed below. Parcel Numbers Address Owner 75-405-0450 641 Main St. MetroPlains 75-405-0460 631 Main St. US Bank 75-404-0140 N/A US Bank 75-405-0470 621 Main St. Laura Nadeau 75-404-0141 N/A Al&Margaret Nadeau 75-405-0310 645 Main St.NW City of Elk River • 410 APPENDIX C-1 APPENDIX D REDEVELOPMENT QUALIFICATIONS FOR THE DISTRICT • SAPPENDIX D-1 0 Redevelopment Eligibility Assessment Proposed "Downtown Revitalization Project" Redevelopment Area Elk River, MN September 2,2004 Prepared by: Short Elliott Hendrickson, Inc. (SEH) 7230 East River Road NE, Suite 102 Rochester, MN 55906 SEH No. A-ELKRI0502.00 • • City of Elk River Downtown Revitalization-Redevelopment Eligibility Assessments September 2, 2004 PURPOSE Short Elliott Hendrickson, Inc. (SEH)was hired by the City of Elk River, Elk River, Minnesota,to survey and evaluate certain the properties within the proposed"Downtown Revitalization"Tax Increment Financing District, and to amend it's original report dated August,2003. The proposed district is generally located south of U.S. Highway 10 between Jackson and County Road number 42. The purpose of our work was to independently ascertain whether the qualification tests for tax increment eligibility, as required under Minnesota Statute, could be met. The findings and conclusions drawn herein are solely for the purpose of tax increment eligibility and are not intended to be used outside the scope of this assessment. SCOPE OF WORK The proposed district consists of 6 parcels comprised of the following types of improvements: 4 commercial or mixed-use structures on 3 parcels, 1 vacant parcels with parking or street improvements, 2 vacant parcels with no improvements and adjacent • Road Right of Way. Building assessment information and data was obtained from the July 2003 report. EVALUATIONS Both interior and exterior evaluations were completed for all the buildings. FINDINGS Coverage Test—Four(4) of the six(6)properties met the coverage test resulting in the finding of 97.25%area coverage. This exceeds the 70%area coverage requirement. The Right of Way (ROW) area was not included for the coverage analysis. Condition of Buildings Test—One Hundred(100%) percent of the buildings—4 of the 4 buildings—were found to be"structurally substandard"when considering code deficiencies and other deficiencies of sufficient total significance to justify substantial renovation or clearance (see definition of"structurally substandard"as follows). This exceeds the Condition of Buildings Test whereby over 50%of buildings, not including outbuildings,must be found"structurally substandard." • 2 • CONCLUSION Our surveying and evaluating of the properties within this proposed Redevelopment District render results that in our professional opinion qualify the district eligible under the statutory criteria and formulas for Tax Increment Financing District Funding. SUPPORTING DOCUMENTS ATTACHED - Site Occupied/Building Substandard Determination table - TIF Assessment maps: Building Assessments,Occupied Surfaces,Percent Occupied Surfaces - Report on Building Condition (one per building) - Individual Building Summary Report(one per building) PROCEDURAL REQUIREMENTS The properties were surveyed and evaluated in accordance with the following requirements under Minnesota Statute Section 469.174, Subdivision 10, clause (c)which states: Interior Inspection—"The municipality may not make such determination [that the building is structurally substandard] without an interior inspection of the property..." Exterior Inspection and Other Means—"An interior inspection of the property is not required, if the municipality finds that(1)the municipality or authority is unable to gain • access to the property;and after using its best efforts to obtain permission from the party that owns or controls the property; and(2)the evidence otherwise supports a reasonable conclusion that the building is structurally substandard." Documentation—"Written documentation of the building findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3,clause (1)." Refer to Exhibit A—Documentation of Contacts/Evaluations, immediately following this report. PROCEDURES FOLLOWED TO MEET REQUIREMENTS The City of Elk River sent letters to all property owners located in the district requesting that an inspection and evaluation be made of their property. SEH conducted assessments between January 7th and March 14th, 2003. Requests for evaluation appointments were made with the building owner or building tenants. An interior inspection and evaluation was completed if consented to by the building representative. An exterior inspection and evaluation was made where the owner refused interior access to their property. In all cases, an exterior evaluation was completed. For all subject buildings,the City of Elk River provided copies of all available building permits on record for review by SEH. These permits provide a basic description of type of work completed for each permit(building,electrical,or plumbing, etc.)and, in some • 3 • cases, scope of work and approximate value of work to be completed. Additional building data was collected from public taxpayer information available from Sherburne County. Building data from these public records was combined with and reviewed against information gathered in the field. QUALIFICATION REQUIREMENTS The properties were surveyed and evaluated to ascertain whether the qualification tests for tax increment eligibility for a redevelopment district, required under the following Minnesota Statutes, could be met. Minnesota Statute Section 469.174, Subdivision 10, clause (a) (1)requires two tests for occupied parcels: 1. Coverage Test—"parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, paved or gravel parking lots or similar structures . . ." Note: The coverage required by the parcel to be considered occupied is defined under Minnesota Statute Section 469.174, Subdivision 10,clause(e)which states: "For purposes of this subdivision, a parcel is not occupied by buildings, streets,utilities, paved or gravel parking lots or other similar structures unless 15%of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots or other similar structures." • 2. Condition of Buildings Test—" . . . and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance." The term `structurally substandard', as used in the preceding paragraph, is defined by a two-step test: Conditions Test: Under the tax increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 10, clause(b), a building is structurally substandard if it contains"defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors,which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." Code Test: Notwithstanding the foregoing,the tax increment law, specifically, Minnesota Statutes, Section 469.174, Subdivision 10, clause (c)also provides that a building may not be considered structurally substandard if it: ". . . is in compliance with building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site." • 4 Based on the above requirements,the substandard determination of a particular building is a two-step process;therefore,the findings of each step are independent of each other and both steps must be satisfied in order for a building to be found structurally substandard. It is not sufficient to conclude that a building is structurally substandard solely because the Code Test is satisfied. It is theoretically possible for a building to require extensive renovation in order to meet current building codes but still not meet the main test of the Conditions Test. Furthermore, deficiencies included in the Conditions Test may or may not include specific code deficiencies as listed in the Code Test. In many cases, specific building code deficiencies may well contribute to the data which supports satisfying the Conditions Test;conversely, it is certainly possible that identified hazards or other deficiencies which could be included in the Conditions Test do not necessarily constitute current building code deficiencies. By definition,the nature of the two steps is slightly different. The Conditions Test is more subjective,whereas the Code Test is an objective test. Conditions Test deficiencies are less technical and not necessarily measurable to the same extent of the code deficiencies in the Code Test. To the end that technical, measurable building code deficiencies support the satisfaction of the less technical Conditions Test,the following code requirements are defined in terms that go beyond the technical requirements of the code and demonstrate their relevance in terms of" . . . deficiencies in essential utilities and facilities, light and ventilation,etc. ..." • Uniform Building Code(UBC): The purpose of the UBC is to provide minimum standards to safeguard life or limb,health,property and public welfare by regulating and controlling the design, construction, quality of materials, use and occupancy, location and maintenance of all buildings and structures (UBC 101.2). A deficiency in the building code (insufficient number of building exits, insufficient door landing area, etc.) adversely affects one or more of the above standards to safeguard `life or limb . . .and public welfare';therefore, a deficiency in the building code is considered a deficiency in one or more"essential utilities and facilities, light and ventilation, etc." Minnesota Accessibility Code, Chapter 1341: This chapter sets the requirements for accessibility all building occupancies. The Minnesota Accessibility Code closely follows the Americans with Disabilities Act Accessibility Guidelines (ADAAG), which sets the guidelines for accessibility to places of public accommodations and commercial facilities as required by the Americans with Disabilities Act(ADA) of 1990. The ADA is a federal anti-discrimination statute designed to remove barriers that prevent qualified individuals with disabilities from enjoying the same opportunities that are available to persons without disabilities (ADA Handbook). Essentially, a deficiency in the accessibility code (lack of handrail extension at stairs or ramp, lack of clearance at a toilet fixture, etc.) results in a discrimination against disabled individuals;therefore, a deficiency in the accessibility code is considered a deficiency in"essential utilities and facilities." • 5 • Minnesota Food Code, Chapter 4626: This chapter is enforced by the Minnesota Department of Health and is similar to the UBC in that it provides minimum standards to safeguard public health in areas of public/commercial food preparation. A deficiency in the food code(lack of non-absorbent wall or ceiling finishes, lack of hand sink, etc.) causes a condition for potential contamination of food;therefore, a deficiency in the food code is considered a deficiency in "essential utilities and facilities." National Electric Code(NEC): The purpose of the NEC is the practical safeguarding of persons and property from hazards arising from the use of electricity. The NEC contains provisions that are considered necessary for safety (NEC 90-1 (a)and(b)). A deficiency in the electric code(insufficient electrical service capacity, improper wiring,etc.)causes a hazard from the use of electricity;therefore,a deficiency in the electric code is considered a deficiency in "essential utilities and facilities." Uniform Mechanical Code (UMC): The purpose of the UMC is to provide minimum standards to safeguard life or limb, health, property and public welfare by regulating and controlling the design, construction, installation, quality of materials, location, operation, and maintenance or use of heating, ventilating, cooling, and other appliances(UMC 102). The UMC sets specific requirements for building ventilation, exhaust, intake and relief. These requirements translate • into a specified number of complete clean air exchanges for a building based on its occupancy type and occupant load. A deficiency in the mechanical code adversely a f f e c t s the `health . . . and public welfare' of a building's occupants; therefore, a deficiency in the mechanical code is considered a deficiency in"light and ventilation." Note: The above list represents some of the more common potential code deficiencies considered in the assessment of the buildings in the proposed district. This list does not necessarily include every factor included in the data used to satisfy the Conditions Test for a particular building. Refer to individual building reports for specific findings. Finally,the tax increment law provides that the municipality may find that a building is not disqualified as structurally substandard under the Code Test on the basis of "reasonably available evidence, such as the size,type,and age of the building,the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. Items of evidence that support such a conclusion [that the building is structurally substandard] include recent fire or police inspections, on-site property appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence." • 6 MEASUREMENTS AGAINST TECHNICAL TEST REQUIREMENTS Coverage Test SEH utilized data in a GIS (Geographic Information Systems) database, available through Sherburne County and the City of Elk River,to obtain individual parcel information. The GIS database contains both graphic information(parcel shapes) and numerical data based on county tax records. This information was used by SEH for the purposes of this assessment. The total square foot area of each property parcel was obtained from county records (GIS) and general site verification. The total extent of site improvements on each property parcel was digitized from recent aerial photography(Spring, 2000).The total square footage of site improvements was then digitally measured and confirmed by general site verification. The total percentage of coverage of each property parcel was computed to determine if the 15%requirement was met. Refer to attached maps: Occupied Surfaces map and Percent Occupied Surfaces map. The total area of all qualifying property parcels was compared to the total area of all parcels to determine if the 70%requirement was met. The area occupied by public • rights-of-way has not been considered in the coverage test calculations. All of the public rights-of-way are improved. If all of the public rights-of-way were treated as a parcel for the purpose of coverage test calculations,the 70%requirement of the coverage test would still be met. Condition of Building Test Replacement Cost—the cost of constructing a new structure of the same size and type on site: R. S. Means Square Foot Costs(2003)was used as the industry standard for base cost calculations. R. S. Means is a nationally published reference tool for construction cost data. The book is updated yearly and establishes a"national average"for materials and labor prices for all types of building construction.The base costs derived from R. S. Means were reviewed, and modified if applicable, against our professional judgement and experience. A base cost was calculated by first establishing building type,building construction type, and construction quality level (residential construction)to obtain the appropriate Means cost per square foot. This cost was multiplied times the building square footage to obtain the total replacement cost for an individual building. Additionally,to account for regional/local pricing, a cost factor was added to the total cost according to R.S. Means tables. Using R. S. Means, consideration is made for building occupancy, building size, and construction type;therefore,the cost per square foot used to construct a new structure will vary accordingly. 7 • Building Deficiencies: Conditions Test(Condition Deficiencies)-determining the combination of defects or deficiencies of sufficient total significance to justify substantial renovation or clearance. On-Site evaluations-Evaluation of each building was made by reviewing available information from city records and making interior and/or exterior evaluations, as noted, sometimes limited to public spaces. Deficiencies in structural elements, essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors,were noted by the evaluator. Condition Deficiencies may or may not include Code Deficiencies as defined below. Energy code compliance was not considered for the purposes of determining Condition Deficiencies. Deficiencies were combined and summarized for each building in order to determine their total significance. Building Deficiencies: Code Test(Code Deficiencies)—determining technical conditions that are not in compliance with current building code applicable to new buildings and the cost to correct the deficiencies: On-Site evaluations-Evaluation of each building was made by reviewing available information from city records and making interior and/or exterior evaluations, as noted, sometimes limited to public spaces. On-site evaluations • were completed using a standard checklist format. The standard checklist was derived from several standard building code plan review checklists and was intended to address the most common, easily identifiable code deficiencies. Mechanical Engineers,Electrical Engineers, and Building Code Officials were also consulted in the development of the checklist. Deficiencies were generally grouped into the following categories(category names are followed by its applicable building code): • Building accessibility—Minnesota Accessibility Code • Building egress, building construction—Uniform Building Code • Fire protection systems—Uniform Building Code • Food service—Minnesota Food Code • HVAC (heating, ventilating, and air conditioning)—Uniform Mechanical Code • Electrical systems—National Electric Code and Minnesota Energy Code • Energy code compliance—Minnesota Energy Code For the purposes of determining the Code Test(Code Deficiencies), Energy code compliance is relevant because its criteria affect the design of integral parts of a majority of a building's systems. The intent of these criteria is to provide a means for assuring building durability, and permitting energy efficient operation (7676.0100). The energy code addresses general building construction(all forms • 8 • of energy transmission in an exterior building envelope—walls,roofs, doors and windows, etc.) and energy usage by lighting and mechanical systems. A deficiency in the energy code(inadequate insulation,non-insulated window systems, improper air infiltration protection, etc.)reduces energy efficient operation and adversely affects building system durability;therefore, a deficiency in the energy code is considered to contribute to a condition requiring substantial renovation or clearance. Office evaluations—Following the on-site evaluation, each building was then reviewed,based on on-site data, age of construction, building usage and occupancy, square footage, and known improvements(from building permit data), and an assessment was made regarding compliance with current mechanical, electrical, and energy codes. A basic code review was also completed regarding the potential need for additional egress(basement stairways, for example), sprinkler systems, or elevators. Deficiency Cost—Costs to correct identified deficiencies were determined by using R. S. Means Cost Data and our professional judgement and experience. In general,where several items of varying quality were available for selection to correct a deficiency, an item of average cost was used, as appropriate for typical commercial or residential applications. Actual construction costs are affected by many factors(bidding climate, size of project, etc.). Due to the nature of this assessment,we were only able to generalize the scope of work for each • correction; that is to say that detailed plans, quantities, and qualities of materials were not possible to be known. Our approach to this matter was to determine a preliminary cost projection suitable to the level of detail that is known. This process was similar to our typical approach for a cost projection that may be given to an owner during a schematic design stage of a project. Costs to correct deficiencies were computed for each building and compared to the building replacement cost to determine if the 15%requirement was met. The total number of buildings determined to be"structurally substandard"by satisfying both the Conditions Test and the Code Test in this manner was compared to the total number of buildings in the district to determine if the 50%requirement was met. Reports on Structurally Substandard Buildings and Individual Building Summary Reports are available for review at the offices of SEH, City of Elk River, and Briggs&Morgan, St. Paul, Minnesota. Technical Conditions Resources—the following list represents the current building codes applicable to new buildings used in the Building Deficiency review. 1998 Minnesota State Building Code 1997 Uniform Building Code 1997 Uniform Housing Code MN 1341 —Minnesota Accessibility Code, Chapter 1341 (1999) • 9 2000 Minnesota Energy Code, Chapters 7672, 7674, or 7676 1999 National Electric Code 1997 Uniform Mechanical Code PROJECT TEAM: Ron Seymour,Project Manager Jason P. Zemke, AIA, Project Architect Nancy G. Schultz,AIA, Principal • i 10 • Report on Building Condition Building IDBusiness Name/Address: Old Elk River Tradinz Co.—Office Building 56-1 Satisfies Conditions Test for Structurally Substandard Building: Y Satisfies Code Test for Structurally Substandard Building: Y Structurally Substandard Building(Y/N): Conditions Test Under the tax increment law,specifically,Minnesota Statutes,Section 469.174,Subdivision 10,a building is structurally substandard if it contains"defects in structural elements or a combination of deficiencies in essential utilities and facilities,light and ventilation,fire protection including adequate egress,layout and condition of interior partitions,or similar factors,which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." The above building,based upon actual interior and exterior inspection and review of building permit records,exhibits the following deficiencies that in our professional opinion contribute to justifying substantial renovation or clearance: Structural Elements • Defects in exterior building shell:various block settlement cracks present on south side foundation wall Essential Utilities&Facilities • Deficient in facilities for disabled:lack of designated disability parking available;lack of exterior accessible route at entrance;lack of accessible hardware at entrance;lack of accessible hardware at interior doors;lack of maneuvering clearance and accessible features in toilet room;lack of accessible features at employee break room area • Toilet fixtures lack adjacent non-absorbing floor and wall surfaces Light&Ventilation • Deficient in meeting Mechanical code: for building construction prior to 1989,mechanical systems do not provide sufficient number of air exchanges Fire Protection/Egress • Deficient exterior door:insufficient door landing area Similar Factors • Defects in exterior building shell:wood siding badly weathered on south side Code Test Notwithstanding the foregoing,the tax increment law also provides that a building may not be considered structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the current building code at a cost of less than 15%of the cost of constructing a new building of the same square footage and type on the same site. Estimated cost of new building of same size and type(Total Replacement Cost): $96,812.93 Estimated cost of correction of code deficiencies(Total Deficiency Cost): $26,079.36 Percentage of Code Deficiency to Replacement Cost: 26.94% Refer to Individual Building Summary Report for documentation of specific code deficiencies. • • Report on Building Condition Old Elk River Tradins Co.–Commercial Building ID/Business Name/Address: 56-2 — Building Satisfies Conditions Test for Structurally Substandard Building: Y Satisfies Code Test for Structurally Substandard Building: Y Structurally Substandard Building(Y/N): 1' Conditions Test Under the tax increment law,specifically,Minnesota Statutes,Section 469.174,Subdivision 10,a building is structurally substandard if it contains"defects in structural elements or a combination of deficiencies in essential utilities and facilities,light and ventilation,fire protection including adequate egress,layout and condition of interior partitions,or similar factors,which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." The above building,based upon actual interior and exterior inspection and review of building permit records,exhibits the following deficiencies that in our professional opinion contribute to justifying substantial renovation or clearance: Structural Elements • Defects in exterior building shell:stucco finish in generally poor condition–various vertical and horizontal cracks–due to building settlement Essential Utilities&Facilities • Deficient in facilities for disabled: lack of designated disability parking available;lack of accessible hardware at interior doors;lack of maneuvering clearance and accessible features at toilet room • Toilet fixture lack adjacent non-absorbent wall surface Light&Ventilation • Deficient in meeting Mechanical code: for building construction prior to 1989,mechanical systems do not provide sufficient number of air exchanges • Toilet room not provided with means of natural or mechanical ventilation Fire Protection/Egress • Additional egress stairway required from lower level due to building occupancy • Deficient exterior door: insufficient egress door clear width;deficient threshold height; insufficient door landing area • Deficient interior stairway:deficient handrail height,terminations,and extensions Similar Factors • Defects in exterior building shell:brick masonry spalling at top of chimney;wood trim at roof eave damaged or missing–no longer weather tight Code Test Notwithstanding the foregoing,the tax increment law also provides that a building may not be considered structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the current building code at a cost of less than 15%of the cost of constructing a new building of the same square footage and type on the same site. Estimated cost of new building of same size and type(Total Replacement Cost): $95,287.80 Estimated cost of correction of code deficiencies(Total Deficiency Cost): $33,139.40 Percentage of Code Deficiency to Replacement Cost: 34.78% • Refer to Individual Building Summary Report for documentation of specific code deficiencies. • Report on Building Condition Building IDBusiness Name/Address: U.S.Bank 57-1 Satisfies Conditions Test for Structurally Substandard Building: Y Satisfies Code Test for Structurally Substandard Building: Y Structurally Substandard Building(Y/N): Y Conditions Test Under the tax increment law,specifically,Minnesota Statutes,Section 469.174,Subdivision 10,a building is structurally substandard if it contains"defects in structural elements or a combination of deficiencies in essential utilities and facilities,light and ventilation,fire protection including adequate egress,layout and condition of interior partitions,or similar factors,which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." The above building,based upon actual interior and exterior inspection and review of building permit records,exhibits the following deficiencies that in our professional opinion contribute to justifying substantial renovation or clearance: Structural Elements • Retaining wall on west side of building is failing Essential Utilities&Facilities • Deficient in facilities for disabled:disability parking incorrectly designated;lack of accessible • hardware at interior doors;lack of maneuvering clearance and accessible features at toilet rooms;lack of accessible features at employee break room area;inaccessible service counter (height) • Installation of elevator required for lower level due to building occupancy Fire Protection/Egress • Deficient exterior stairway:insufficient stair clear width;deficient handrail height, terminations,and extensions;deficient guardrail construction • Deficient interior stairway:deficient rise/run;deficient handrail height,terminations,and extensions Layout/Condition of Interior Partitions • Layout of building is poor due to location of(public)toilet rooms that are in a(non-public) secure area Similar Factors • Layout of building site/parking is poor due to location of drive-through lanes that cross path of pedestrian traffic to entrance Code Test Notwithstanding the foregoing,the tax increment law also provides that a building may not be considered structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the current building code at a cost of less than 15%of the cost of constructing a new building of the same square footage and type on the same site. Estimated cost of new building of same size and type(Total Replacement Cost): $579,378.60 Estimated cost of correction of code deficiencies(Total Deficiency Cost): $125,945.00 Percentage of Code Deficiency to Replacement Cost: 21.74% Refer to Individual Building Summary Report for documentation of specific code deficiencies. • • Report on Building Condition Building IDBusiness Name/Address: Apartments/Nadeau's Dry Cleaners 58-1 Satisfies Conditions Test for Structurally Substandard Building: Y Satisfies Code Test for Structurally Substandard Building: N Structurally Substandard Building(Y/N): Conditions Test Under the tax increment law,specifically,Minnesota Statutes,Section 469.174,Subdivision 10,a building is structurally substandard if it contains"defects in structural elements or a combination of deficiencies in essential utilities and facilities,light and ventilation,fire protection including adequate egress,layout and condition of interior partitions,or similar factors,which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance." The above building,based upon actual interior and exterior inspection and review of building permit records,exhibits the following deficiencies that in our professional opinion contribute to justifying substantial renovation or clearance: Essential Utilities&Facilities • Deficient in facilities for disabled: lack of designated disability parking available;lack of maneuvering clearance at entrance;lack of maneuvering clearance and accessible hardware at interior doors;lack of maneuvering clearance and accessible features at toilet rooms • • Accessible public toilets required on accessible route(first floor) Light&Ventilation • Deficient in meeting Mechanical code: for building construction prior to 1989,mechanical systems do not provide sufficient number of air exchanges • Toilet room not provided with means of natural or mechanical ventilation Fire Protection/Egress • Fire rated floor/ceiling/wall assembly required between occupancy types • Deficient exterior stairway:deficient rise/run;deficient handrail extensions;deficient guardrail construction • Deficient emergency egress:lack of bedroom emergency egress windows • Deficient exterior door:deficient threshold height;insufficient door landing area • Deficient egress corridor construction:insufficient corridor clear width;corridors exceed maximum allowable length for dead-end • Deficient interior stairway:insufficient stair clear width;insufficient stair landing area; insufficient stair headroom clearance;additional handrails required;deficient handrail height, grip,and extensions;lack of continuous handrails • Lack of smoke detector/detection system each bedroom Layout/Condition of Interior Partitions • Majority of ceiling and walls in laundromat unfinished or in poor condition Similar Factors • Defects in exterior building shell:wood siding and trim generally in need of paint;siding not 100%secure to sheathing(bowing off of building on north and east walls;siding rotting/damaged by moisture at grade and wood fascia rotting in various locations Code Test Notwithstanding the foregoing,the tax increment law also provides that a building may not be considered structurally substandard if it is in compliance with the building code applicable to new buildings or could 410 0 be modified to satisfy the current building code at a cost of less than 15%of the cost of constructing a new building of the same square footage and type on the same site. Estimated cost of new building of same size and type(Total Replacement Cost): $984,970.01 Estimated cost of correction of code deficiencies(Total Deficiency Cost): $100,165.84 Percentage of Code Deficiency to Replacement Cost: 10.17% Refer to Individual Building Summary Report for documentation of specific code deficiencies. • • O a' . ..=,.. 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IHt!= Ht pv v Q $ L C .W v a V v N C O N x ° a g 7 o W w w W W WE >.r) p E i U N 9 f0 A C O$ E c c C > `o L W L .2 W ri U E o *g o ' o o ° y o d.m ° o o v 8 v o -c v ri ri w d 1 a ° v ro A 5 R'v w v o '9 �p 9 o co W co W e o C «W o c W W >. 5.- `o ro g c `o a - X v `o a) t W W W N m O.co � C co � to.c LL N N L N r fn CO .- y m w a V1 L El S 1� LL r c y LL 7 � LL o W LL � N � Y V m LL W S w _' • • 0 go 0 / 2 - -. 2 (� ) k8 Cw ) 2 . P. a g 5f /\ � E J § ) | $ E » • iJ1(( 7E ) to § /\ E a ) ° E E ¥ k E E .9 4) vE - P. g 48 12 < B . • ce a . ( ). § % i w E . ( • k - ® (< k \ X k ( 2 ( k k $ k • APPENDIX E PRIOR PLANNED IMPROVEMENTS 0 • APPENDIX E-1 r P.O. Box 490 Elk River, MN 55330 City of 763/441-4900 PERMIT NO.: 'vim 0E25 •1 River Fax 763/441-7425 �J'1J iJ�'lGJt�lJ DATE ISSUED: Address . 641 Main St Nw PIN : 75-405-0450 Legal Des,: : Subdivision Village Lot 2 Block 4 parcel 33 Permit Type : Building Property Type : Corciercial Cons t ruct ion -ype: Remodel Activity : 327 Stores & Customer Services Permit Applicant: ,21i"KS, TAMMY BUILDING INSPECTION RECORD 24 HOUR NOTICE REQUIRED FOR ALL INSPECTIONS. OCCUPANCY AND USE NOT AUTHORIZED UNTIL FINAL INSPECTION COMPLETED. INSPECTION TYPE DATE INSPECTOR INSPECTION TYPE DATE INSPECTOR DriuctH-IIT la T: nT'NV:. X'=;Lf=H-T } ;TA,- FRAMING NON-STRUCTURAL HVAC FINAL • • PLUMBING FINAL ACCESSIBLE AND USABLE BLDG .6.1. :`i`YUL: If Lr AL FINAL INSPECTION COMMENTS: In accordance with City Ordinance, new or substantially remodeled buildings shall not be occupied until all ,rk has been approved, and a Certificate of Occupancy has been issued by the Building Department. E: THIS CARD MUST BE POSTED IN THE GARAGE OR TAPED TO AN CALL FOR INSPECTIONS WEEKDAYS: ACCESSIBLE WINDOW BEFORE CALLING FOR INSPECTIONS. Electrical: 743-3149 7:00 AM-8:30 AM MAINTAIN THIS RECORD CARD UNTIL WORK IS COMPLETE. Heating: 441-4900 8:00 AM-4:30 PM Plumbing: 441-4900 8:00 AM-4:30 PM Building: 441-4900 8:00 AM-4:30 PM ii P.O. Box 490 Elk River, MN 55330 aty ar PERMIT NO.: 763/441-4900 • _ • River Fax 763/441-7425 DATE ISSUED: 04/09/2003 Address : 541 Main St Nw PIN : 75-40E-0450 Legal Desc : Subdivision Village Lot 2 Block 4 Parcel 33 Permit Type : Building Property Type : Commercial Construction Type: Remodel Activity - 327 Stores & Customer Services Valuation : 2,000.00 NOTE: Plumbing permit 0300780 issued to Phil Olson - 3 fixtures on 4/3/03_ Mfr. Olson's Master Plumber's license is good until 12/31/2003 and he will bring a copy of his bond on 4/4/03. SR OWNER • Permit Fee Schedule $83.2E. Cairns. Lee Plan. Check Commercial $54.11 State Surcharg Building $1.50 Total $138.8: Paid with check x 2008 APPLICANT WEEKS, TAFXY IMPORTANT! PLEASE READ SEPARATE PERMITS ARE REQUIRED FOR ELECTRICAL, PLUMBLING,HEATING,VENTILATING OR AIR CONDI- TIONING. THIS PERMIT BECOMES NULL AND VOID IF WORK OR CONSTRUCTION AUTHORIZED IS NOT COMMENCED WITHIN 180 DAYS, OR IF CONSTRUCTION OR WORK IS SUSPENDED OR ABANDONED FOR A PERIOD OF 180 DAYS AT ANY TIME AFTER WORK IS COMMENCED. I HEREBY CERTIFY THAT I HAVE READ AND EXAMINED THIS APPLICATION AND KNOW THE SAME TO BE TRUE AND CORRECT. ALL PROVISIONS OF LAWS AND ORDI- NANCES GOVERNING THIS TYPE OF WORK WILL BE COMPLIED WITH WHETHER SPECIFIED HEREIN OR NOT. .GRANTING OF A PERMIT DOES NOT PRESUME TO AUTHORITY TO VIOLATE OR CANCEL THE PROVI- SIONS OF ANY OTHER STATE OR LOCAL LAW REGULAT- ING CONSTRUCTION OR THE PERFORMANCE OF Signature CONSTRUCTION. SEPARATE PERMITS REQUIRED FOR W OTHER THAN DESCRIBED ABOVE. City of y PERMIT Elk �\ RECEIVED BY V 7e DATE: CITY OF ELK RIVER BUILDING DEPARTMENT 13065 ORONO PARKWAY PO BOY 490 ELK RIVER,IvLN 55330 INSPECTION SCHEDULING(763)441-4900 MECHANICAL PERMIT APPLICATION // Site Address: � (- / 64- SuitefUnit The Applicant is: Owner❑ Contractor ❑ Other ❑ Property NAME Owner ADDRESS CITY STATE ZIP TELEPHONE 410 NAME /, d7 lr��/ �,�— • Contractor ADDRESS / 9 2-7 5 Z�'°"��`�r 7L /1/14-6,CITY eJ --„ei /ei/ STATE NV ZIP 5'S": TELEPHONE 76 'V/-`5 7 LICENSE • NAME, Engineer ADDRESS • CITY STATE ZIP TELEPHONE REG# ( USE TYPE Single Family❑ Townhouse ❑ Commercial/Industrial Multi-Family ❑ Institutional ❑ Other (0) ❑ New ❑ Addition(ADD Alter (ALT)E Repair(REP)0 Other (0)0 PLEASE COMPLETE OTHER SIDE OF APPLICATION ** SEPARATE PERMITS ARE REQUIRED FOR BUILDING, ELECTRIC, GAS, OR PLUMBING . . 0 . . /.i• Detailed description of worlc: — e 6 . 4,i-ii 9 I50 c/ei Ilepti-- 732,11 il C) di cFrest-\ t i r 1 ,...;-, C.-- Please check all boxes that apply! 0 A/C . 0 Boiler _—__ Class 1 Hood , - 0 it to Air exchanger , E Combustion Air Class II Hood _ 0 Dryer Venting • 0 Pool Heater 0 Heat Pump Appliance Xj Duct work eaoVe Olk'E. 0 Refrigeration 0 Overhead Radian Heaters 0 Furnace 0 Solar :— Unit Heater 0 Other Fill in the appropriate boxes below: . _ - Make Model# Heat Fuel • Flue Input CFM Tons Hp . Loss/Gain Diameter (BTU) III . . . All Fees are based on valuation,including cost of labor and materials. The minimum fee is $45.00÷state surcharge. ---,..,,,, 00 - TOTAL JOB VALUATION: $ ,..)(-1U. PERMIT FEE $ 403 (1 A% ' of Total Job Valuation–minimum- of$45.00) SURCHARGE $ r-:-.) ,•,, - .) Li (.0005 x Total Job Valuation–minimum $.50) TOTAL DUE $ (make checks payable to: City of Elk River) THIS IS AN APPLICATION FOR A PERMIT- IT IS NOT VALID UNTIL PROCESSED afgltrak: 17771,M!g3:775,114, ro':',,,,PEOE.K.:0,0WEETTS,T:ABEOECEVitarat:EM,Wirk:773 .--X7403,_7177eittAWlit'.qttiz§Aig,r0fliRiRiii,' .0-iteditkideatk4 .t.O.i, 7Alwii- -tt:-.-3a-' -''.14T--.,,', -- 4,,,,,,,,,.,,. .,i,,,,,,,,,....,„,„,,,,,-„,,,,,,..:4,11.:::,,;‘, *,,-. ,,,,,, :::...n,, ,a, ,,..,- ,` -:, ''# ; 4.1V4MY474a1:*Vii.:',N4,*4: 6-r'Iti;:tu ::4"'TIY.4.,- :''.'•Z,.,UV,'"-;n5' ', ' ''':r: -' . -: .' -,ATM.':.'.:,7 . ..,,;i:::,;!■: . . OttiitP*: 41:"14144:ft4''1, ;2014t0:41*-40,-***.= 7:421$7$ ,r NE3**200:it* LitEfl- ISS1ED.S ' E .P;ET,47474#0,§itYATIT4rAgr4:704A; :itO4r6485i&adiS °''''''''rt OE.It'wre.ii-jr7A4Vii, 44#13:titablStdait,O±ENtriAbDt's,,-1.,k4ittittfititiAbrOgittf!ti,... ...',.,-T.,`-f,:' Ari,:71'....i.,‘ „,---,4„..., 7--.4tw- )• 7''4,`,,,, - --Vigge!,...4.1) .,,:r.,,m, iilt -m4.4tArovwfowiocitum„4,,,e,,,,!:, .',.,i,A,PA ''''-`,4;43Pt:'''' ::1014';''.-, •%Y.7 *.,,.:'r-:go#0.2.,S.IiNtvr:T70r*$04;tt§:Aj7- Ltr:Lt*QUa'.'§tr:s-tt'i,'Citiigbitriir.fiiaiiddkqra,'gifabritiitikiitrA4-al **T-z*LE,74#' wysyy:oxik7: :, 0.#10$;d4iiti:Saftfiiialieiff4f4igilittlaikitiakartitil: tIA145,2,:" • ,---7----- NAME OF APPLICANT / III /i/ r - 6'?V rnv t G. R._ S DATE: q.//576 3 Please type or prr:nt . • . , ..., SIGNATURE OF APPLICANT ,., 0300780 • REPRINTED ON 07/15/2004 04/03/2003 Address : 641 Main St Nw PIN : 75-405-0450 Legal Desc : Subdivision Village Lot 2 Block 4 Parcel 33 Permit Type : Plumbing Property Type : Commercial Construction Type: Remodel Activity : 0/s Plumbing Fixtures 3 NOTE: State License good until 12/31/2003, Phil Olson will bring in updated bond on 4/4/03. SR Plumbing $45.00 Ilikairns, Lee State Surcharge Plumbing $0.50 Total $45.50 - Paid with check # 5281 NORTHERN PLUMBING TECHNOLOGIES 16385 230th Avenue Elk River, MN 55330 763/263-8995 • mod' ermit Number: 03_6 0 7 v'ci Planning Department atY or g p ElkSign Permit Application Form River (One Per Sign) Property Information Address: 6/// /02 i i✓/ 577" Parcel Number: 75- - Legal Description: (attach if necessary) • Ap.I' ant t. _ �� �P �/,/In p S Name: ay♦"VP ,r�� TA ( l/t/C L l� Address: G t/f• At/t,w . 10114)eV Ittit -C 3311 Street City State ZipCode Phone(w): 7f 3 j 1 Fax: Phone(H): zy/-$.373 Signature: /` Date: y/4"7/3 Owner Infor tion f� Name: I 17-1 it-/j ) Address: ! I l/ `j l a ?J • �,' 1t)-e )l 4 7/3 7 ó Street City State ZipCode Phone(w): ?47 T 3 03,1 Fax: ` Phone(H): 11111 Signature: {'�. Date: trio I hereby certify that I have furnished information on this a.p ication,`hick is to the best of my kn. I dge true and correct. I also certify that I am the owner or authorized agent for the above-mentioned property a ' that all construction will conform to all existing stare and local laws and will proceed in accordance with submitted plans. I am aware that this permit can be revoked for just cause.Furthermore,I hereby agree that the City Official or designee may enter upon the property to perform needed inspections. This permit becomes null and void if work or construction authorized is not commenced within 120 days,or if construction or work is suspended or abandoned for a period of 180 days at any after work is commenced. Submittal Requirements o Completed Application o Site Plan of Property Showing Sign Location o Building Elevations(Wall Signs) ❑ Plans and Specifications • Sign Information Sign Type: Wall —Free Standing _Temporary Ie�� Date(s)of Display: Sign Size: Width:Z:1 Height: — Square Feet Sign Message: 2/2.I- X /S 5Z.,#( ST e art S U/e ;, -/ Fee Schedule 0 to 100 Square Feet: $30.00 101 to 300 Square Feet: $90.00 Over 300 Square Feet: $150.00 Temporary Signs: $50.00 Deposit Temporary Sign Permit Deposits are returned to the applicant once the City.receives a request in writing for the d posit. 0z( .Y Planning Depar ent to Building Department Date 0300969 04/22/2003 Address : 641 Main St Nw PIN : 75-405-0450 Legal Desc : Subdivision Village : Lot 2 Block 4 Parcel 33 Permit Type : Sign Property Type : Commercial Construction Type: New Activity : 0/s NOTE: wall sign same location as previous sign 2 1/2' x 18 ' Sign $30.00 •airns, Lee Total $30.00 Paid with check # 2021 WEEKS, TAMMY APPENDIX F MINNESOTA BUSINESS ASSISTANCE FORM (MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT) APPENDIX F-1 Please fill in date agreement signed(same as question 21) Minnesota Business Assistance Form • The Minnesota Business Assistance Form(MBAF)is used to report each business subsidy and financial assistance agreement signed from August 1,1999 through December 31,2003 unless goals have been achieved and reported in a MBAF per Minn.Stat. §116J.993 to§116.1.995. • The following government agencies must submit a MBAF: 1)any local government/agency that signed a business subsidy agreement since January 1, 1999,or represents a population of more than 2,500;2)all state government agencies authorized to provide business subsidies. • If a local or state government agency that is required to report has not done so by April 1,DEED will mail a warning. If it fails to report by June 1,it may not award any business subsidies until a report has been filed. • Questions? Call(651)296-0580. Information on where to mail or fax your completed MBAF(s)is on page 4. Section 1 Grantor Information 1. Name of grantor(funding entity) 2. Name of person completing this form 3. Street address 4. City 5. ZIP code 6. County 7. Phone number 8. Fax number 9. E-mail address 10. Please indicate who in your organization should receive the MBAF if different from the person in Question 2. Name/Title Phone number Street address City ZIP code S 11. Classification of grantor(Mark one.If grantor is entity 12. Has your organization held a public hearing on and created by govt agency,please indicate affiliation. For adopted criteria for awarding business subsidies in example,a city EDA would check"City government.') compliance with Minn.Stat.§116J.994?(Mark one.) • City government • Yes,in 2004 (attach criteria) • Yes,in 2004 but have not yet adopted criteria • County government • Yes,prior to 2004 • Regional government If Yes: Hearing Date: Year Criteria Submitted: • *State government • No • •Other(Please specify) • •Other(Please attach explanation.) 13. Has your organization signed any agreements to award a business subsidy or financial assistance from August 1, 1999 through December 31,2003 unless goals have been achieved and reported in a previous filed MBAF? (Mark one.) • •Yes (Complete the remainder of the form unless goals have been achieved and • No (Stop here,go to section 5 on page 4.) reported in a previously filed MBAF per Minn.Stat.§1167.993 and§116J.994.) Section 2 Recipient Information 14. Name of business or organization 15. Address where business subsidy or financial assistance receiving subsidy or financial assistance will be used Street address City State ZIP code 16. Does the recipient have a parent corporation?(Mark one.) • Yes(Indicate name and address of parent corporation below. If more than one, indicate ultimate owner.) • No • Name of parent corporation Street address City State ZIP code Minnesota Business Assistance Form(1/14/04) Page 1 of 4 Dept.of Employment &Economic Development 17. Industry of recipient's facility(Mark one.): • Manufacturing • Services • Finance,Insurance,Real Estate • Retail Trade Wholesale Trade • • Construction • •Other(please specify) 18. Did the recipient relocate as a result of signing this agreement?(Mark one.) • Yes(Indicate city and state of previous address and reason recipient did not complete this project at that address.) • No(Go to Question 19.) City/State of previous address Reason project not completed at previous address 19. Would the recipient have remained in previous location or relocated elsewhere if not awarded this business subsidy or financial assistance?(Mark one.) • Remained at previous location • Relocated to different Minnesota location • Relocated outside Minnesota Section 3 Agreement Information 20. Total dollar value of business subsidy or financial 21. Date agreement signed(In addition to the agreement assistance(Please separate value by type in Questions 24 date, indicate any dates the agreement was amended.) and 25.) 22. Benefit date(Indicate the date the recipient will benefit from the business subsidy or financial assistance. For example, indicate the date improvements were finished,equipment was placed into service,or the recipient occupied the property, whichever is earlier.) 23. Does the agreement provide a business subsidy or one of the four types of financial assistance(see Question 25)required to be reported? (Mark one.) • *business subsidy • •financial assistance • 24.If the agreement provided a business subsidy,please 25. If the assistance was one of the four types of financial indicate the type(s)and total dollar value for each type. assistance,please indicate the type(s). • •not applicable,agreement provided financial assistance • •not applicable,agreement provided a business subsidy • *loan(only principal) $ • *assistance for property polluted $ • grant(i.e.,forgivable loan) $ by contaminants • *tax abatement $ • *assistance for renovating building $ • •TIF or other tax reduction or deferral $ stock or bringing it up to code,and • guarantee of payment $ assistance provided for designated • •contribution of property or infrastructure $ historic preservation districts,when • preferential use of governmental facilities $ 50%or less of total cost • -land contribution $ • *assistance for pollution control or $ • *other(Specify subsidy type.) $ abatement • *assistance for a TIF soils condition district $ 26. If the assistance included tax increment financing,please 27. Are any other grantors providing a business subsidy or indicate the type of TIF district?(Mark one.) financial assistance to the same project? (Mark one.) • •not applicable,assistance was not in the form of TIF • •Yes(Specify each grantor and the value of their assistance below;attach an additional sheet if necessary) • *redevelopment • •renewal and renovation • No • soils condition • economic development Grantor(s)and value of the agreement(s): • *mined underground space • *hazardous substance subdistrict Grantor Value($) • Grantor Value($) Minnesota Business Assistance Form(1/14/04) Page 2 of 4 Dept.of Employment &Economic Development Section 4 Goals and Public Purpose Identified in the Agreement 28. Minn.Stat.§116J.994 requires that business subsidy and financial assistance agreements state a public purpose. Which of the following public purposes were stated in the agreement? (Mark all that apply.) • •Enhancing economic diversity • Increasing tax base(cannot be only purpose) • 'Creating high-quality job growth • 'Other(please specify) • Job retention • *Stabilizing the community 29. Indicate whether the agreement included the following types of goals,and whether the recipient had attained those goals at the time of this report. (Fill in the boxes and attainment date(s)for each goal.) Goals Target attainment All goals established? dates(month&year) attained? A)Specific wage and job goals to be attained within 2 years • •Yes • No • •Yes • No B)Other job-creation and/or retention goals • Yes • No • •Yes • No C)Other wage goals • •Yes • No • •Yes • No D)Other goals other than wage and job goals • •Yes • No • •Yes • No (Please attach descriptions of goals and progress toward attainment if not documented in Questions 30 and 31.) 30. For each of the following wage categories,indicate the job creation and/or retention goals stated in the agreement and the average hourly value of any employer-provided health insurance goals for those jobs. (Only indicate job creation goals in full-time equivalents if you are unable to separate goals by full-and part-time positions.) Full-time Part-time/ FTE(only if goals not Hourly Wage Job Seasonal/Temp. stated as FT/PT) Job Retention Hourly Value of (excluding benefits) Creation Job Creation Job Creation Health Insurance no hourly wage-level goal - $ • less than$7.00 $ $7.00 to$8.99 $ $9.00 to$10.99 $11.00 to$12.99 $ $13.00 to$14.99 $ $15.00 and higher $ 31. For each of the following wage categories,indicate the number of actual jobs created and/or retained since the benefit date and the actual hourly value of any employer-provided health insurance for those jobs. (Only indicate job creation in full-time equivalents if you are unable to separate job creation into full-and part-time positions.) Full-time Part-time/ FTE(only if unable to Hourly Wage Job Seasonal/Temp. separate FT/PT) Job Retention Hourly Value of (excluding benefits) Creation Job Creation Job Creation Health Insurance less than$7.00 $ $7.00 to$8.99 $9.00 to$10.99 $ $11.00 to$12.99 $13.00 to$14.99 - $ $15.00 and higher $ 32. Has the recipient achieved all goals(see Questions 29,30 and 31)and fulfilled all obligations stipulated in the agreement? (Mark one.) • Yes • No S Minnesota Business Assistance Form(1/14/04) Page 3 of 4 Dept.of Employment &Economic Development Section 5 Recipients Failing to Fulfill Obligations 411 (Do not complete this section if you completed it on another MBAF submitted to DEED.) 33. During the period January 1,2003 through December 31,2003,did your organization have any recipients who failed to report as required by Minn.Stat.§116J.993 and§116J.994? (Mark one.) • Yes(Indicate the name of each recipient failing to report and the value of subsidy or financial assistance awarded to that recipient. Attach additional pages if necessary.) • No Name of recipient Type of subsidy or assistance(See Questions 24 and 25.) Value of subsidy or assistance 34. Did your organization have any recipients who failed to achieve any goals or fulfill any other obligations under an agreement signed on or after August 1, 1999,that were required to be fulfilled by the time of this report?(Mark one.) • Yes(Complete the remainder of this section.) • No(Stop here and submit form to DEED.) 35.-39. Provide the following information for each recipient failing to fulfill goals or any other terms of an agreement that were to be attained by the time of reporting. (Attach additional pages if necessary) 35. Information on recipient and agreement: Name of recipient in default Type of subsidy or assistance Initial value of subsidy or assistance Street address of recipient City/ZIP code of recipient Outstanding value of subsidy or assistance 36. Reason(s)for default(Mark all that apply.): • *recipient ceased operation • *recipient relocated to a different community • *recipient was unable to fill vacant positions • *other(Specify reason.) 37. To date,has the recipient fulfilled its repayment obligation?(Mark one.) • •Yes • No,recipient has begun to repay the assistance. • No,recipient has not begun to repay the assistance. 38. Has the agreement been amended to extend the recipient's deadline for fulfilling its obligations?(Mark one.) • Yes • No 39. Describe the steps being taken to bring recipient into compliance or recoup the subsidy: Return your completed MBAF(s)by April 1,2004,to: Minnesota Business Assistance Form Minnesota Department of Employment and Economic Development-AEO 500 Metro Square, 121 East 7th Place St.Paul,MN 55101-2146 Or fax to: (651)215-3841 • Minnesota Business Assistance Form(1/14/04) Page 4 of 4 Dept.of Employment &Economic Development APPENDIX G ESTIMATED CASH FLOW FOR THE DISTRICT S • APPENDIX G-1 9/3/2004 Metro Plains-BOTH Page 1 of 5 CITY OF ELK RIVER-RIVERFRONT REDEVELOPMENT AREA 0 ' r „I FT;FORGIspviooNCNLY;7FfEil %rr, „- n•,TAX-INCF ENT,cdti.�,a,,, ! .. i,.r, .�` r,�, ., ,;, Base Project Captured Semi-Annual State Semi-Annual Admin. Pooling Semi-Annual PAYMENT DATE PERIOD BEGINNING Tax Tax Tax Gross Tax Auditor Net Tax at at Gross Tax PERIOD ENDING Yrs. Mth. Yr. Capacity Capacity Capacity Increment 0.36% Increment 5.00% 6.00% Increment Yrs. Mth. Yr. 0.0 02-01 2003 9,305 9,305 0.0 08-01 2003 0.0 08-01 2003 9,305 9,305 0.0 02-01 2004 0.0 02-01 2004 9,305 9,305 Present Value Date 08-01-04 0.0 08-01 2004 0.0 08-01 2004 9,305 9,305 0.0 02-01 2005 0.0 02-01 2005 9,305 9,305 0.0 08-01 2005 0.0 08-01 2005 9,305 9,305 0.0 02-01 2006 0241 ..... 2006,.;. 9,305 9305 0.6 G 1, 1P,' 0.5 08-01 2006 9,305 9,305 1.0 02-01 2007 1.0 02-01 2007 9,305 171,150 161,84 99,30 (35) 98,94 (4,94) (5,93) 88,06 1.5 08-01 2007 1.5 08-01 2007 9,305 171,150 161,84 99,30 (35) 98,94 (4,94) (5,93) 88,06 2.0 02-01 2008 2.0 02-01 2008 9,305 176,285 166,97 102,45 (36) 102,08 (4,94) (6,12) 91,01 2.5 08-01 2008 2.5 08-01 2008 9,305 176,285 166,97 102,45 (36) 102,08 (4,94) (6,12) 91,01 3.0 02-01 2009 3.0 02-01 2009 9,305 181,573 172,28 105,69 (381) 105,31 (4,94) (6,31 ) 94,05 3.5 08-01 2009 3.5 08-01 2009 9,305 181,573 172,26 105,69 (381) 105,31 (4,94) (6,31 ) 94,05 4.0 02-01 2010 4.0 02-01 2010 9,305 187,020 177,71 109,041 (393) 108,64 (4,94) (6,51 ) 97,18 4.5 08-01 2010 4.5 08-01 2010 9,305 187,020 177,71 109,041 (393) 108,64 (4,94) (6,51 ) 97,18 5.0 02-01 2011 5.0 02-01 2011 9,305 192,631 183,32 112,483 (405) 112,07 (4,94) (6,72) 100,40 5.5 08-01 2011 5.5 08-01 2011 9,305 192,631 183,32 112,483 (405) 112,07 (4,94) (6,72) 100,40 6.0 02-01 2012 0 6.0 02-01 2012 9,305 198,410 189,10 116.029 (418) 115.61 (4,94) (6.93) 103,72 6.5 08-01 2012 6.5 08-01 2012 9,305 198,410 189,10 116,029 (418) 115,61 (4,94) (6,93) 103,72 7.0 02-01 2013 7.0 02-01 2013 9,305 204,362 195,05 119,681 (431) 119,25 (4,94) (7,15) 107,14 7.5 08-01 2013 7.5 08-01 2013 9,305 204,362 195,05 119,681 (431) 119,25 (4,94) (7,15) 107,14 8.0 02-01 2014 8.0 02-01 2014 9,305 210,493 201,18 123,443 (444) 122,99 (4,94) (7,38) 110,671 8.5 08-01 2014 8.5 08-01 2014 9,305 210,493 201,18 123,443 (444) 122,99 (4,94) (7,38) 110,671 9.0 02-01 2015 9.0 02-01 2015 9,305 216,808 207,50 127,317 (458) 126,85 (4,94) (7,61 ) 114,300 9.5 08-01 2015 9.5 08-01 2015 9,305 216,808 207,50 127,317 (458) 126,85 (4,94) (7,61 ) 114,300 10.0 02-01 2016 10.0 02-01 2016 9,305 223,312 214,00 131,308 (473) 130,83 (4,947) (7,85) 118,038 10.5 08-01 2016 10.5 08-01 2018 9,305 223,312 214,00 131,308 (473) 130,83 (4,947) (7,85) 118,038 11.0 02-01 2017 11.0 02-01 2017 9,305 230,011 220,706 135,419 (488) 134,93 (4,947) (8,09) 121,888 11.5 08-01 2017 11.5 08-01 2017 9,305 230,011 220,706 135,419 (488) 134,93 (4,947) (8,09) 121,888 12.0 02-01 2018 12.0 02-01 2018 9,305 236,912 227,607 139,653 (503) 139,15 (4,947) (8,34) 125,854 12.5 08-01 2018 12.5 08-01 2018 9,305 236,912 227,607 139,653 (503) 139,15 (4,947) (8,34) 125,854 13.0 02-01 2019 13.0 02-01 2019 9,305 244,019 234,714 144,013 (518) 143,49 (4,947) (8,61 ) 129,938 13.5 08-01 2019 13.5 08-01 2019 9,305 244,019 234,714 144,013 (518) 143,49 (4,947) (8,61 ) 129,938 14.0 02-01 2020 14.0 02-01 2020 9,305 251,340 242,035 148,505 (535) 147,97 (4,947) (8,87) 134,145 14.5 08-01 2020 14.5 08-01 2020 9,305 251,340 242,035 148,505 (535) 147,97 (4,947) (8,87) 134,145 15.0 02-01 2021 15.0 02-01 2021 9,305 258,880 249,575 153,132 (551) 152,58 (4,947) (9,15) 138,478 15.5 08-01 2021 15.5 08-01 2021 9,305 258,880 249,575 153,132 (551) 152,58 (4,947) (9,15) 138,478 16.0 02-01 2022 16.0 02-01 2022 9,305 266,646 257,341 157,897 (568) 157,32 (4,947) (9,44) 142,941 16.5 08-01 2022 18.5 08-01 2022 9,305 266,646 257,341 157,897 (568) 157,32 (4,947) (9,44) 142,941 17.0 02-01 2023 17.0 02-01 2023 9,305 274,646 265,340 162,805 (586) 162,21 (4,947) (9,73) 147,538 17.5 08-01 2023 17.5 08-01 2023 9,305 274,646 265,340 162,805 (586) 162,21 (4,947) (9,73) 147,538 18.0 02-01 2024 18.0 02-01 2024 9,305 282,885 273,580 167,860 (604) 167,25 (4,947) (10,03) 152,273 18.5 08-01 2024 18.5 08-01 2024 9,305 282,885 273,580 167,860 (604) 167,25 (4,947) (10,03) 152,273 19.0 02-01 2025 19.0 02-01 2025 9,305 291,371 282,066 173,067 (623) 172,44 (4,947) (10,34) 157,150 19.5 08-01 2025 19.5 08-01 2025 9,305 291,371 282,066 173,067 (623) 172,44 (4,947) (10,34) 157,150 20.0 02-01 2026 20.0 02-01 2026 9,305 300,113 290,808 178,431 (642) 177,78 (4,947) (10,66) 162,174 20.5 08-01 2026 20.5 08-01 2026 9,305 300,113 290,808 178,431 (642) 177,78 (4,947) (10,66) 162,174 21.0 02-01 2027 21.0 02-01 2027 9,305 309,116 299,811 183,955 (662) 183,29 (4,947) (10,99) 167,348 21.5 08-01 2027 21.5 08-01 2027 9,305 309,116 299,811 183,955 (662) 183,29 (4,947) (10,99) 167,348 22.0 02-01 2028 22.0 02-01 2028 9,305 318,389 309,084 189,645 (683) 188,96 (4,947) (11,33) 172,677 22.5 08-01 2028 22.5 08-01 2028 9,305 318,389 309,084 189,845 (683) 188,96 (4,947) (11,33) 172,677 23.0 02-01 2029 23.0 02-01 2029 9,305 327,941 318,636 195,506 (704) 194,80 (4,947) (11,68) 178,166 23.5 08-01 2029 23.5 08-01 2029 9,305 327,941 318,636 195,506 (704) 194,80 (4,947) (11,68) 178,166 24.0 02-01 2030 24.0 02-01 2030 9,305 337,779 328,474 201,542 (726) 200,81 (4,947) (12,04) 183,820 24.5 08-01 2030 24.5 08-01 2030 9,305 337,779 328,474 201,542 (726) 200,81 (4,947) (12,04) 183,820 25.0 02-01 2031 25.0 02-01 2031 9,305 347,913 338,608 207,760 (748) 207,01 (4,947) (12,421) 189,644 25.5 08-01 2031 25.5 08-01 2031 9,305 347,913 338,608 207,760 (748) 207,01 (4,947) (12,421) 189,644 26.0 02-01 2032 Totals 7,371,893 (26,539) 7,345,35 (247,364) (440,721) 6,657,269 Present Value Date 08-01-04 3,200,99 (117,264) (192,060) 2,891,674 le Prepared by Ehlers Cashtlow8-23-04 PLAN-2004-3 913/2004 Metro Plains-BLUFF BLOCK Page 2 of 5 CITY OF ELK RIVER-RIVERFRONT REDEVELOPMENT AREA 52 Units of For Sale Single Family and 10,000 Sq/Ft Retail • %:%qiAFTFqq:Disqusittligtg,y, l TIt "SifCt5W �.. District New Redevelopment District County District# Inflation Rate-Every_Years •I'; , Internal Loan Rate ', $' Pay-As-You-Go Interest Rate: 0.00% Note Issued Date(Present Value Date): 01-Aug-04 Local Tax Rate-Frozen 122.7140% Pay 2004 Fiscal Disparities Election(A-inside or B outside) N/A Year District was certified Pay 2004 Assumes First Tax Increment 2006 Assumes First Tax Increment For Dev 2007 Years of Tax Increment 26 Assumes Last Year of Tax Increment 2031 Fiscal Disparities Ratio N/A Fiscal Disparities Metro Wide Tax Rate N/A Local Tax Rate-Current 122.7140% Pay 2004 State Wide Property Tax Rate(Used for total taxes) 54.4470% Pay 2004 Market Value Tax Rate(used for total taxes) 0.07597% Pay 2004 Commercial Industrial Class Rate 1.5%-2 0% Pay 2004 First 150,000 1.50% Over 150,000 2.00% Rental Class Rate 1.25% Pay 2004 Property Land Building Total Class Base Date PID Owner Market Value Market Value Market Value Rate Tax Capacity Payable 754050450 ECM pubkskera 89,300 85,400 174,700 1.5%-2.0% 2,744 2004 754050460 First Bank Maple Gro 118,400 139,200 257,600 1.5%-2.0% 4,402 2004 754050470 aura Nadeau 117,200 118,200 235,400 1.5%-2.0% 3,958 2004 754040140 3,500 0 3,500 1.5%-2.0% 53 2004 7540401 200 0 200 1.5%-2.0% 3 2004 Totals Current Use 671,400 11,160 Totals For Sale Use 10,400,000 91.63% 615,204 1.00% 8,152 Totals Retail Use 950,000 8.37% 56,196 1.5%-2.0% 843 Totals NEW Use 671,400 6,995 Note: 1. Market values are pay 2004 per review of County records on 2-23-04 ..„':�, .; "•.t PROECTINFORMATI¢Pf•..`• xa:i Use Total Market Value Taxes Per Total Market Class Date Phase Sq.Ft./UnIts Sq.Ft./Units Sq.Ft./Units Taxes Value Rate Tax Capacity Payable For Sale 52 200,000.00 2,606.22 135,523 10,400,000 1.00% 104,000 2006 Retail 10,000 85.00 3.31 33,054 950,000 1.5%-2.0% 18,250 2006 Total 168,577 11,350,000 122,250 •Tax estimates are based upon market value,construction costs and taxes per sq/ft. '; �,.,. ,�:., ;•e• 7A7t';CAL�ULATfoNSi �,,..,... , Total Local Fiscal Local Fiscal State-wide Local Fiscal State-wide Market Total Use Tax Tax Disparities Tax Disparities Property Taxes Disparities Property Value Taxes Capacity Capacity Tax Capacity Rate Tax Rate Tax Rate Taxes Taxes Taxes For Sale 104,000 104,000 0 1.22714 0.00000 0.54447 127,623 0 0 7,901 135,523 Retail 18,250 18,250 0 1.22714 0.00000 0.54447 22,395 0 9,937 722 33,054 TOTAL 122,250 122,250 0 1.22714 0.00000 0.54447 150,018 0 9,937 8,623 168,577 Note: Elk River does not pay Fiscal Disparities and For Sale Homes do not pay State-wide property tax II • Prepared by Ehlers Cashflow 8-23-04 PLAN-20043 9/3/2004 Page 3 of 5 • . /ii//,r!/ •,A, /:+. ,..rte r .may. • ;<airr�ii. �..�a»�a/, 'R +1�RERf �Gl��i�C•�V ': .. ', ,,,h�a; ate,., ,,,::i.. ..,,•�...• � Base Project Captured Semi-Annual State Semi-Annual Admin. Pooling Semi-Annual PAYMENT DATE PERIOD BEGINNING Tax Tax Tax Gross Tax Auditor Net Tax at at Gross Tax PERIOD ENDING Yrs. Mth. Yr. Capacity Capacity Capacity Increment 0.36% Increment 5.00% 6.00% Increment Yrs. Mth. Yr. 0.0 02-01 2003 6,995 6,995 0.0 08-01 2003 0.0 08-01 2003 6,995 6,995 0.0 02-01 2004 0.0 02-01 2004 6,995 6,995 Present Value Date 08-01-04 0.0 08-01 2004 0.0 08-01 2004 6,995 6,995 0 0 0 0 0 0 0 0.0 02-01 2005 0.0 02-01 2005 6,995 6,995 0 0 0 0 0 0 0 0.0 08-01 2005 0.0 08-01 2005 8,995 6,995 0 0 0 0 0 0 0 0.0 02-01 2006 0.0 02-01 2006 6,995 6,995 0 0 0 0 0 0 0 0.5 08-01 2006 0.5 08-01 2006 6,995 6,995 0 0 0 0 0 0 0 1.0 02-01 2007 1.0 02-01 2007 6,995 122,250 115,255 70,717 (255) 70,462 (3,523) (4,228) 62,712 1.5 08-01 2007 1.5 08-01 2007 6,995 122,250 115,255 70,717 (255) 70,462 (3,523) (4,228) 62,712 2.0 02-01 2008 2.0 02-01 2008 6,995 125,918 118,923 72,967 (263) 72,705 (3,523) (4,362) 64,819 2.5 08-01 2008 2.5 08-01 2008 6,995 125,918 118,923 72,967 (263) 72,705 (3,523) (4,362) 64,819 3.0 02-01 2009 3.0 02-01 2009 6,995 129,895 122,700 75,285 (271) 75,014 (3,523) (4,501) 66,990 3.5 08-01 2009 3.5 08-01 2009 6,995 129,695 122,700 75,285 (271) 75,014 (3,523) (4,501) 66,990 4.0 02-01 2010 4.0 02-01 2010 6,995 133,586 126,591 77,672 (280) 77,393 (3,523) (4,644) 69,226 4.5 08-01 2010 4.5 08-01 2010 6,995 133,586 128,591 77,672 (280) 77,393 (3,523) (4,644) 69,226 5.0 02-01 2011 5.0 02-01 2011 6,995 137,593 130,598 80,131 (288) 79,843 (3,523) (4,791) 71,529 5.5 08-01 2011 5.5 08-01 2011 6,995 137,593 130,598 80,131 (288) 79,843 (3,523) (4,791) 71,529 6.0 02-01 2012 6.0 02-01 2012 6,995 141,721 134,726 82,664 (298) 82,366 (3,523) (4,942) 73,901 6.5 08-01 2012 6.5 08-01 2012 6,995 141,721 134,726 82,664 (298) 82,366 (3,523) (4,942) 73,901 7.0 02-01 2013 7.0 02-01 2013 6,995 145,973 138,978 85,273 (307) 84,966 (3,523) (5,098) 76,345 7.5 08-01 2013 7.5 08-01 2013 6,995 145,973 138,978 85,273 (307) 84,966 (3,523) (5,098) 76,345 8.0 02-01 2014 8.0 02-01 2014 6,995 150,352 143,357 87,960 (317) 87,643 (3,523) (5,259) 78,861 8.5 08-01 2014 8.5 08-01 2014 6,995 150,352 143,357 87,960 (317) 87,843 (3,523) (5,259) 78,861 9.0 02-01 2015 9.0 02-01 2015 6,995 154,863 147,868 90,727 (327) 90,401 (3,523) (5,424) 81,453 9.5 08-01 2015 9.5 08-01 2015 6,995 154,863 147,868 90,727 (327) 90,401 (3,523) (5,424) 81,453 10.0 02-01 2016 10.0 02-01 2016 6,995 159,509 152,514 93,578 (337) 93,241 (3,523) (5,594) 84,123 10.5 08-01 2016 10.5 08-01 2016 6,995 159,509 152,514 93,578 (337) 93,241 (3,523) (5,594) 84,123 11.0 02-01 2017 11.0 02-01 2017 6,995 164,294 157,299 96,514 (347) 96,166 (3,523) (5,770) 86,873 11.5 08-01 2017 11.5 08-01 2017 6,995 164,294 157,299 96,514 (347) 96,166 (3,523) (5,770) 66,873 12.0 02-01 2018 12.0 02-01 2018 6,995 169,223 162,228 99,538 (358) 99,180 (3,523) (5,951) 89,706 12.5 08-01 2018 12.5 06-01 2018 6,995 169,223 162,228 99,538 (358) 99,180 3,523 ( ) (5,951) 89,706 13.0 02-01 2019 13.0 02-01 2019 6,995 174,299 167,304 102,653 (370) 102,283 (3,523) (6,137) 92,623 13.5 08-01 2019 13.5 08-01 2019 6,995 174,299 167,304 102,653 (370) 102,283 (3,523) (6,137) 92,623 14.0 02-01 2020 14.0 02-01 2020 6,995 179,528 172,533 105,861 (381) 105,480 (3,523) (6,329) 95,628 14.5 08-01 2020 14.5 08-01 2020 6,995 179,528 172,533 105,861 (381) 105,480 (3,523) (6,329) 95,628 15.0 02-01 2021 15.0 02-01 2021 6,995 184,914 177,919 109,166 (393) 108,773 (3,523) (6,526) 98,723 15.5 08-01 2021 fla 15.5 08-01 2021 6,995 184.914 177,919 109,166 (393) 108,773 (3,523) (6,526) 98.723 16.0 02-01 2022 16.0 02-01 2022 6,995 190,462 183,467 112,570 (405) 112,164 (3,523) (6,730) 101,911 18.5 08-01 2022 16.5 08-01 2022 6,995 190,462 183,467 112,570 (405) 112,164 (3,523) (6,730) 101,911 17.0 02-01 2023 17.0 02-01 2023 6,995 196,175 189,180 116,075 (418) 115,658 (3,523) (6,939) 105,195 17.5 08-01 2023 17.5 08-01 2023 6,995 196,175 189,180 116,075 (418) 115,658 (3,523) (6,939) 105,195 18.0 02-01 2024 18.0 02-01 2024 6,995 202,061 195,066 119,686 (431) 119,256 (3,523) (7,155) 108,577 18.5 08-01 2024 18.5 08-01 2024 6,995 202,061 195,066 119,686 (431) 119,256 3,523 ( ) (7,155) 108,577 19.0 02-01 2025 19.0 02-01 2025 6,995 208,122 201,127 123,406 (444) 122,962 3,523 ( ) (7,378) 112,061 19.5 08-01 2025 19.5 08-01 2025 6,995 208,122 201,127 123,406 (444) 122,962 (3,523) (7,378) 112,061 20.0 02-01 2026 20.0 02-01 2026 6,995 214,366 207,371 127,237 (458) 126,779 (3,523) (7,607) 115,649 20.5 08-01 2026 20.5 08-01 2026 6,995 214,366 207,371 127,237 (458) 126,779 (3,523) (7,607) 115,649 21.0 02-01 2027 21.0 02-01 2027 6,995 220,797 213,802 131,183 (472) 130,710 3,523 ( ) (7,843) 119,345 21.5 08-01 2027 21.5 08-01 2027 6,995 220,797 213,802 131,183 (472) 130,710 (3,523) (7,843) 119,345 22.0 02-01 2028 22.0 02-01 2028 8,995 227,421 220,426 135,247 (487) 134,760 3,523 ( ) (8,086) 123,151 22.5 08-01 2028 22.5 08-01 2028 6,995 227,421 220,426 135,247 (487) 134,760 (3,523) (8,086) 123,151 23.0 02-01 2029 23.0 02-01 2029 6,995 234,244 227,249 139,433 (502) 138,931 (3,523) (8,336) 127,072 23.5 08-01 2029 23.5 08-01 2029 6,995 234,244 227,249 139,433 (502) 138,931 (3,523) (8,336) 127,072 24.0 02-01 2030 24.0 02-01 2030 6,995 241,271 234,276 143,745 (517) 143,227 3,523 ( ) (8,594) 131,110 24.5 08-01 2030 24.5 08-01 2030 6,995 241,271 234,276 143,745 (517) 143,227 3,523 ( ) (8,594) 131,110 25.0 02-01 2031 25.0 02-01 2031 6,995 248,509 241,514 148,186 (533) 147,652 (3,523) (8,859) 135,270 25.5 08-01 2031 25.5 08-01 2031 6,995 248,509 241,514 148,186 (533) 147,652 (3,523) (8,859) 135,270 26.0 02-01 2032 Totals 5,254,945 (18,918) 5,236,028 (176,156) (314,162) 4,745,710 Present Value Date 08.01.04 2,427,623 (88,318) (145,657) 2,193,647 NOTES: 1.State Auditor payment is based upon 1st half,pay 2004 actual and may increase over term of district 2.Assumes there is inflationary increment collected in 2006 which starts the district(shown as 0 since inflation cannot be determined at this time), &the 1st full year of increment is 2007 3.Amount of increment will vary depending upon market value,tax rates,class rates,construction schedule and inflation on Market Value. 4.Inflation on tax rates cannot be captured. 5.TIE does not capture State wide or market value Increases in taxes • Prepared by Ehlers Cashflow 8-23-04 PLAN-2004-3 91312004 Metro Plains-JACKSON BLOCK Page 4 of 5 CITY OF ELK RIVER-RIVERFRONT REDEVELOPMENT AREA 32 Units of Rental Multi-Family and 13,600 Sq/Ft Retail • vx ORAP1'.(=OR LNSCUSSt3N ONLY %(�P CASHFLOWAS�r[PNS '„� District New Redevelopment District County District 6 Inflation Rate-Every_Years 4 3.00% Internal Loan Rate ' i 5,00%'. Pay-As-You-Go Interest Rate: 6.75% Note Issued Date(Present Value Date): 01-Aug-04 Local Tax Rate-Frozen 122.7140% Pay 2004 Fiscal Disparities Election(A-inside or B outside) N/A Year District was certified pay 2004 Assumes First Tax Increment 2006 Assumes First Tax Increment For Dev 2007 Years of Tax Increment 26 Assumes Last Year of Tax Increment 2031 Fiscal Disparities Ratio N/A Fiscal Disparities Metro Wide Tax Rate N/A Local Tax Rate-Current 122.7140% Pay 2004 State Wide Property Tax Rate(Used for total taxes) 54.4470% Pay 2004 Market Value Tax Rate(used for total taxes) 0.07597% Pay 2004 Commercial Industrial Class Rate 1.5%-2.0% Pay 2004 First 150,000 1.50% Over 150,000 2.00% Rental Class Rate 1.25% Pay 2004 Property Land Building Total Class Base Date Map ID PID Owner Market Value Market Value Market Value Rate Tax Capacity Payable L21 754050310 147,600 23,500 171,100 1 5%-2.0% 2,672 2004 Totals Current Use 171,100 2,672 Totals Rental Use 1,920,000 59.95% 102,580 1.25% 1,282 Totals Retail Use 1,282,500 40.05% 68,520 1.5%-2.0% 1,028 • Totals NEW Use 171,100 2,310 Note: 1. Market values are pay 2004 per review of County records on 2-23-04 ^PROJECTINFORMATION j % y> Use Total Market Value Taxes Per Total Market Class Date Phase Sq.Ft./Units Sq.Ft./Units Sq.Ft./Units Taxes Value Rate Tax Capacity Payable Rental 32 80,000.00 $965.94 30,910 1,920,000 1.25% 24,000 2006 Retail 13,500 95.00 3.34 45,087 1,282,500 1.5%-2.0% 24,900 2006 Total 75,997 3,202,500 48,900 •Tax estimates are based upon market value,construction costs and taxes per sgih. TAX CAICUATtON,3, Total Local Fiscal Local Fiscal State-wide Local Fiscal State-wide Market Total Use Tax Tax Disparities Tax Disparities Property Taxes Disparities Properly Value Taxes Capacity Capacity Tax Capacity Rate Tax Rate Tax Rate Taxes Taxes Taxes Rental 24,000 24,000 0 1.22714 0.00000 0.54447 29,451 0 0 1,459 30,910 Retail 24,900 24,900 0 1.22714 0.00000 0.54447 30,556 0 13,557 974 45,087 TOTAL 48,900 48,900 0 1.22714 0.00000 0.54447 60,007 0 13,557 2,433 75,997 Note: Elk River does not pay Fiscal Disparities and Apartments do not pay State-wide property tax • Prepared by Ehlers Cashnow 8-23-04 PLAN-20044 9/3/2004 Page 5 of 5 III . , .i/L; ,, `,�ly/ 4/%rt,:.'3AXIldCREMENT GASH FLOW %/ ..\• ,i a %. .. .... ,,,/•�! Base Project Captured Semi-Annual State Semi-Annual Admin. Pooling Semi-Annual PAYMENT DATE PERIOD BEGINNING Tax Tax Tax Gross Tax Auditor Net Tax at at Gross Tax PERIOD ENDING Yrs. Mth. Yr. Capacity Capacity Capacity Increment 0.36% Increment 5.00% 6.00% Increment Yrs. Mth. Yr. 0.0 02-01 2003 2,310 2,310 0.0 08-01 2003 0.0 08-01 2003 2,310 2,310 0.0 02-01 2004 0.0 02-01 2004 2,310 2,310 Present Value Date 08-01-04 0.0 08-01 2004 0.0 08-01 2004 2,310 2,310 0 0 0 0 0 0 0 0.0 02-01 2005 0.0 02-01 2005 2,310 2,310 0 0 0 0 0 0 0 0.0 08-01 2005 0.0 08-01 2005 2,310 2,310 0 0 0 0 0 0 0 0.0 02-01 2006 0.0 02-01 2006 2,310 2,310 0 0 0 0 0 0 0 0.5 08-01 2006 0.5 08-01 2006 2,310 2,310 0 0 0 0 0 0 0 1.0 02-01 2007 1.0 02-01 2007 2,310 48,900 46,590 28,586 (103) 28,483 (1,424) (1,709) 25,350 1.5 08-01 2007 1.5 08-01 2007 2,310 48,900 46,590 28,586 (103) 28,483 (1,424) (1,709) 25,350 2.0 02-01 2008 2.0 02-01 2008 2,310 50,367 48,057 29,486 (106) 29,380 (1,424) (1,763) 26,193 2.5 08-01 2008 2.5 08-01 2008 2,310 50,367 48,057 29,486 (106) 29,380 (1,424) (1,763) 26,193 3.0 02-01 2009 3.0 02-01 2009 2,310 51,878 49,568 30,413 (109) 30,304 (1,424) (1,818) 27,062 3.5 08-01 2009 3.5 08-01 2009 2,310 51,878 49,568 30,413 (109) 30,304 (1,424) (1,818) 27,062 4.0 02-01 2010 4.0 02-01 2010 2,310 53,434 51,124 31,368 (113) 31,255 (1,424) (1,875) 27,956 4.5 08-01 2010 4.5 08-01 2010 2,310 53,434 51,124 31,368 (113) 31,255 (1,424) (1,875) 27,956 5.0 02-01 2011 5.0 02-01 2011 2,310 55,037 52,727 32,352 (116) 32,235 (1,424) (1,934) 28,877 5.5 08-01 2011 5.5 08-01 2011 2,310 55,037 52,727 32,352 (116) 32,235 (1,424) (1,934) 28,877 6.0 02-01 2012 6.0 02-01 2012 2,310 56,689 54,378 33,365 (120) 33,245 (1,424) (1,995) 29,826 6.5 08-01 2012 6.5 08-01 2012 2,310 56,689 54,378 33,365 (120) 33,245 (1,424) (1,995) 29,826 7.0 02-01 2013 7.0 02-01 2013 2,310 58,389 56,079 34,408 (124) 34,285 (1,424) (2,057) 30,803 7.5 08-01 2013 7.5 08-01 2013 2,310 58,389 56,079 34,408 (124) 34,285 (1,424) (2,057) 30,803 8.0 02-01 2014 8.0 02-01 2014 2,310 60,141 57,831 35,483 (128) 35,355 (1,424) (2,121) 31,810 8.5 08-01 2014 8.5 08-01 2014 2,310 60,141 57,831 35,483 (128) 35,355 (1,424) (2,121) 31,810 9.0 02-01 2015 9.0 02-01 2015 2,310 61,945 59,635 36,590 (132) 36,459 (1,424) (2,188) 32,847 9.5 08-01 2015 9.5 08-01 2015 2,310 61,945 59,635 36,590 (132) 36,459 (1,424) (2,188) 32,847 10.0 02-01 2016 10.0 02-01 2016 2,310 63,803 61,493 37,730 (136) 37,595 (1,424) (2,256) 33,915 10.5 08-01 2016 10.5 08-01 2016 2,310 63,803 61,493 37,730 (136) 37,595 (1,424) (2,256) 33,915 11.0 02-01 2017 11.0 02-01 2017 2,310 65,718 63,407 38,905 (140) 38,765 (1,424) (2,326) 35,015 11.5 08-01 2017 11.5 08-01 2017 2,310 65,718 63,407 38,905 (140) 38,765 (1,424) (2,326) 35,015 12.0 02-01 2018 12.0 02-01 2018 2,310 67,689 65,379 40,115 (144) 39,970 (1,424) (2,398) 36,148 12.5 08-01 2018 12.5 08-01 2018 2,310 67,689 65,379 40,115 (144) 39,970 (1,424) (2,398) 36,148 13.0 02-01 2019 13.0 02-01 2019 2,310 69,720 67,410 41,361 (149) 41,212 (1,424) (2,473) 37,315 13.5 08-01 2019 13.5 08-01 2019 2,310 69,720 67,410 41,361 (149) 41,212 (1,424) (2,473) 37,315 14.0 02-01 2020 14.0 02-01 2020 2,310 71,811 69,501 42,644 (154) 42,490 (1,424) (2,549) 38,517 14.5 08-01 2020 14.5 08-01 2020 2,310 71,811 69,501 42,644 (154) 42,490 (1,424) (2,549) 38,517 15.0 02-01 2021 15.0 02-01 2021 2,310 73,966 71,656 43,986 (158) 43,807 (1,424) (2,628) 39,755 15.5 08-01 2021 • 15.5 08-01 2021 2,310 73,966 71,656 43,966 (158) 43,807 (1,424) (2,628) 39.755 16.0 02-01 2022 16.0 02-01 2022 2,310 76,185 73,875 45,327 (163) 45,184 (1,424) (2,710) 41,030 16.5 08-01 2022 16.5 08-01 2022 2,310 78,185 73,875 45,327 (163) 45,164 (1,424) (2,710) 41,030 17.0 02-01 2023 17.0 02-01 2023 2,310 78,470 76,160 46,730 (168) 46,561 (1,424) (2,794) 42,343 17.5 08-01 2023 17.5 08-01 2023 2,310 78,470 76,160 46,730 (168) 46,561 (1,424) (2,794) 42,343 18.0 02-01 2024 18.0 02-01 2024 2,310 80,824 78,514 48,174 (173) 48,001 (1,424) (2,880) 43,696 18.5 08-01 2024 18.5 08-01 2024 2,310 80,824 78,514 48,174 (173) 48,001 (1,424) (2,880) 43,696 19.0 02-01 2025 19.0 02-01 2025 2,310 83,249 80,939 49,662 (179) 49,483 (1,424) (2,969) 45,090 19.5 08-01 2025 19.5 08-01 2025 2,310 83,249 80,939 49,662 (179) 49,483 (1,424) (2,969) 45,090 20.0 02-01 2026 20.0 02-01 2026 2,310 85,746 83,436 51,194 (184) 51,010 (1,424) (3,061) 46,525 20.5 08-01 2026 20.5 08-01 2026 2,310 85,746 83,436 51,194 (184) 51,010 (1,424) (3,061) 46,525 21.0 02-01 2027 21.0 02-01 2027 2,310 88,319 86,009 52,772 (190) 52,582 (1,424) (3,155) 48,003 21.5 08-01 2027 21.5 08-01 2027 2,310 88,319 86,009 52,772 (190) 52,582 (1,424) (3,155) 48,003 22.0 02-01 2028 22.0 02-01 2028 2,310 90,968 88,658 54,398 (196) 54,202 (1,424) (3,252) 49,526 22.5 08-01 2028 22.5 08-01 2028 2,310 90,968 88,658 54,398 (196) 54,202 (1,424) (3,252) 49,526 23.0 02-01 2029 23.0 02-01 2029 2,310 93,697 91,387 56,073 (202) 55,871 (1,424) (3,352) 51,094 23.5 08-01 2029 23.5 08-01 2029 2,310 93,697 91,387 56,073 (202) 55,871 (1,424) (3,352) 51,094 24.0 02-01 2030 24.0 02-01 2030 2,310 96,508 94,198 57,797 (208) 57,589 (1,424) (3,455) 52,710 24.5 08-01 2030 24.5 08-01 2030 2,310 96,508 94,198 57,797 (208) 57,589 (1,424) (3,455) 52,710 25.0 02-01 2031 25.0 02-01 2031 2,310 99,404 97,094 59,574 (214) 59,359 (1,424) (3,562) 54,374 25.5 08-01 2031 25.5 08-01 2031 2,310 99,404 97,094 59,574 (214) 59,359 (1,424) (3,562) 54,374 26.0 02-01 2032 Totals 2,116,948 (7,621) 2,109,327 (71,208) (126,560) 1,911,559 Present Value Date 08-01.04 773,375 (28,946) (46,402) 698,027 NOTES: 1,State Auditor payment Is based upon 1st half,pay 2004 actual and may increase over term of district 2.Assumes there is inflationary increment collected in 2006 which starts the district(shown as 0 since inflation cannot be determined at this time), &the 1st full year of increment is 2007 3.Amount of increment will vary depending upon market value,tax rates,class rates,construction schedule and inflation on Market Value. 4.Inflation on tax rates cannot be captured. 5.TIP does not capture State wide or market value increases in taxes 1111 Prepared by Ehlers Cashflow 8-23W PLAN-2004-3 • APPENDIX H BUT/FOR QUALIFICATIONS 10?*/, But-For AnalYsisrltfi Current Market Value-Estimate $842,400 New Market Value-Estimate $14,552,500 Difference $13,71 0,100 Present Value of Tax Increment $2,891,674 Difference $11,318,426 Value Likely to Occur Without TIF is Less Than: $11,318,426 • • APPENDIX H-1 • MEMORANDUM TO: MetroPlains FROM: City Staff Ehlers&Associates, Inc. Briggs and Morgan, P.A. DATE: April 28, 2004 RE: Proposed MetroPlains Project Two memorandums dated April 7, 2004 and April 22, 2004, to MetroPlains were prepared by the City and it's representatives. These memorandums were based on financial data provided to Ehlers&Associates by MetroPlains. Two memorandums dated April 16, 2004 and April 28, 2004 were prepared by Larry Olson of MetroPlains. This updated memorandum incorporates the comments and requests of MetroPlains that are acceptable to City Staff, Ehlers&Associates and Briggs and Morgan and is based on financial data submitted by MetroPlains. • Prior to the preparation of a Development Agreement in connection with the proposed Bluff Block project and Jackson Block project we thought it would be helpful to set forth in a memorandum certain key points to be included in the Development Agreement. These points are as follows: 1. Linkage between the Jackson project and the Bluff project. Concerning the linkage of the Jackson and Bluff projects and all of the provisions relating to linkage, it is becoming increasingly apparent that the City's requirements will not permit construction of the Jackson Block to start before the Bluff Block. Therefore, MetroPlains is willing to commit that Bluff Block construction will commence prior to or simultaneously with construction of the Jackson Block. 2. Amount of tax increment financing assistance. The Development Agreement will identify the amount of tax increment financing assistance for both the Bluff and Jackson projects. Relative to the discussion about the tax increment notes and the formation of the tax increment district(s), MetroPlains and the City agree to consider structuring the districts within the limitations of the tax increment financing law,to achieve maximum flexibility(i) in the permissible use of the tax increments between the two projects; and (ii)the pledge of tax increment to the payment of the notes. • 1643076v1 • The note(s) for the Jackson project will be issued when the construction financing for the Bluff project closes and after the building permit for Bluff project is issued. The Development Agreement will contain a"look back"method for both the Bluff and Jackson projects. With regard to the look back provision for the for-sale residential portion of the Bluff Project, MetroPlains understands that it will be allowed a specific amount of profit tied to a percentage of the total cost of acquiring and constructing the for-sale portion of the Bluff Project. If after the sale of all of the units MetroPlains' profit exceeds the allowed profit,the HRA's assistance for that portion of the project will be reduced. On the rental housing and commercial portion of the Jackson and Bluff projects MetroPlains will be allowed development fees and a return on equity based on a preliminary sources and uses statement. To the extent that final costs are less than those shown in the preliminary sources and uses statement increasing MetroPlains' return,the assistance for that portion of the project will be reduced. The amount of profit, return and fees that the amount of tax increment financing will be based on and the "look back"method will be based on is as follows: Bluff Block For-sale housing-10%of costs Commercial-5%development fee, market rate leasing commissions and a 12%cash on cash rate of return IIIJackson Block Rental Housing-12%developer fee based on costs approved by MHFA Commercial-5%development fee, market rate leasing commissions and a 12%cash on cash rate of return The Development Agreement will provide that any reduction of the assistance for one of the phases of the project will be offset by verifiable increased costs on other phases. 3. SAC/WAC/Park Dedication/Building Permit Fees. The City is willing to reduce or waive in their entirety the SAC and WAC fees, if necessary,to make the projects feasible. MetroPlains acknowledges that the City's utility commission must approve these reductions or waivers. The City will not reduce park dedication fees, building permit fees or other applicable City application and development fees that are payable in connection with the projects. MetroPlains is not in a position to bear the tax increment inflation risk. MetroPlains agrees that the City can recapture these amounts from tax increments derived from inflation. The City will recommend to the Park and Recreation Board that the park dedication fees are used for park, boardwalk, gazebo relocation and other improvements related to the downtown redevelopment. • 2 1643076v1 • 4. Cost of the Bluff Block. The Development Agreement will identify the purchase price that MetroPlains must pay to acquire the Jackson Block. In addition to being willing to reduce the SAC and WAC fees, if necessary, to make the projects feasible the City is willing to reduce the cost of the Jackson Block in its entirety if necessary. However, the City is willing to reduce the SAC and WAC fees and the cost of the Jackson Block only if construction of the Bluff Block occurs. MetroPlains agrees that the City can recapture the value of the Jackson Block from tax increments derived from inflation. 5. Issuance of City Tax Increment Bonds. The Development Agreement will state that in order to enable MetroPlains to achieve the profit, fees and rate of return contemplated by this memorandum, the City will consider issuing revenue or general obligation tax increment bonds to refinance the Bluff Block tax increment revenue notes. The City will consider issuing General Obligation Tax Increment Bonds subject to the following conditions: • • it is determined that the construction of the Bluff project will not occur without the issuance of the bonds; • the principal amount of the bonds will not exceed the amount of tax increment generated by the Bluff project; • bonds will not be issued for the Jackson project. • bonds will not be issued until the construction financing closes on the Bluff project; • personal guarantees of shortfall in tax increments will be required from principals of MetroPlains or MetroPlains' parent company,MetroPlains Properties, Inc. if determined by Ehlers and Associates to have sufficient net worth and asset liquidity; • no profit can be taken out of the Bluff project by MetroPlains until the actual market value of the completed Bluff project is determined and the actual amount tax increments generated by the Bluff project is established; • if tax increments are less than expected, developer profit will be used to pay the debt service on the bonds; • minimum sale prices established for the Bluff housing units cannot be changed without HRA consent. • 3 1643076v1 • 6. Purchase of Bluff Block properties. The City will not finance the acquisition of the Bluff Block properties. If the actual cost of acquiring and carrying the Bluff Block properties is greater than the costs contained in the financial analysis prepared by Ehlers&Associates, it is agreed that the financial analysis will be recalculated and the City is willing to consider the reduction of SAC and WAC fees and the cost of the Jackson Block in order to make the Bluff project feasible. 7. Type of Bluff Block Project. MetroPlains is willing to proceed with the Jackson and Bluff Blocks linked. If efforts to finance and market the Bluff Block show that financing and marketing thresholds cannot be achieved and if MetroPlains has by that time expended substantial amounts of money and time on design, marketing and approvals, the Development Agreement will state that the HRA and MetroPlains will explore the feasibility of other types of projects on the Bluff Block, including a combination of commercial and rental (if market rate) and/or for-sale housing. Accepted by MetroPlains this day of , 2004. METROPLAINS DEVELOPMENT,LLC 1111 tfy III 4 1643076v1