3.1 EDSR 06-19-2017Request for Action
ToItem Number
Economic DevelopmentAuthority3.1
Agenda Section Meeting DatePrepared by
Special MeetingJune 19, 2017Amanda Othoudt, EDD
Item Description
Reviewed by
TIF PolicyDiscussionTina Allard, City Clerk
Reviewedby
Action Requested
ReviewtheTax Increment Financing Policyand scoring worksheetand identify goals as it relates to the
citys housing needs.
Background/Discussion
The Tax Increment Financing policy was approved on February 18, 2014, based on the direction from
twojoint workshopsheld November 4, 2013,and December 2, 2013.
In 2014, the HRA and the City Council established a separate Hou
assist in the development of housing projects that satisfy city goals and require assistance. The Housing
TIF policy is a separate policy to theTIF policy employed for economic development, where factorssuch
as job growth and wages are a vital consideration. The HRA approved the Housing TIF Policy and
worksheet on April 6, 2015, with the goal of attracting affordable senior housing to Elk River.
Staff initiated an EDA Finance Committee review of all financial policies in March of 2016. The TIF
policy is the final policy underreview.The HRA discussed changes to the policy at their June 5, 2017,
meeting. Staff is also looking for direction from the EDA and City Council to identify the goals as it
relates to the citys development priorities.
1.Remove the scoring worksheets
2.Update policies and goals for the use of TIF
3.Identify all eligible TIF districts
4.Update Tax Increment Financing Act and corresponding Minnesota S
5.Update application process
Following the recommendations provided by the EDA tonight, the policy will be reviewed by the City
Councilat their July 3 meeting,inclusive of all the recommendations provided by the HRA and EDA.
Financial Impact
N/A
Attachments
Draft 2017 TIF Policy
Pre-session Questions
Tax Increment Financing
Policy & Application
Amended: March2017
February 2014
May 2006
March 2000
August 1991
City of Elk River
Economic Development Division
13065 Orono Parkway
Elk River, MN 55330
763.635.1040
498942v2 JSB EL185-13
TABLE OF CONTENTS
Policy Purpose 3
Objectives of Tax Increment Financing 3
Policies for the Use of TIF 3
Statutory TIF Districts 4
Project Requirements 5
Project Qualifications 6
Subsidy Agreement and Reporting Requirements 7
Public Information Notice 7
Application Process for TIF 8
Signature Page 9
Application 10
But-For
Sample Analysis 17
Application Review Worksheet: 18
Non-Housing Projects
Application Review Worksheet: 20
Housing Projects
City of Elk River Tax Increment Financing Policy & Application
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I.
POLICY PURPOSE
For the purposes of this document, the term city shall include
Economic Development Authority, and Housing and Redevelopment Au
The purpose of this policy is to establish the city of Elk Rivers position r
the use of Tax Increment Financing (TIF) for private development
beyond the requirements and limitations set forth by State Law.
used as a guide in the processing and review of applications requesting tax increment
assistance. The fundamental purpose of tax increment financing i
encourage desirable development or redevelopment that would not
but for the assistance provided through TIF.
The city of Elk River is granted the power to utilize TIF by the
Increment Financing Act, as amended. It is the intent of the ci
minimum amount of TIF, at the shortest term required for the prod.
The city reserves the right to approve or reject projects on a c
taking into consideration established policies, project criteria
services in relation to the potential benefits from the project.eria
does not guarantee the award of TIF to the project. Approval or
project is not intended to set precedent for approval or denial
II.
OBJECTIVES OF TAX INCREMENT FINANCING
As a matter of adopted policy, the city will consider using TIF to assist private
development projects to achieve one or more of the following obj
To retain local jobs and/or increase the number and diversity of
stable employment and/or attractive wages and benefits as definethe citys
Business Subsidy Policy.
To encourage additional unsubsidized private development in the
directly or indirectly through spin off development.
To facilitate the development process and to achieve development
which would not be developed without TIF assistance.
To remove blight and/or encourage redevelopment of commercial an
industrial areas in the city that result in high quality redevel
reinvestment.
To offset increased costs of redevelopment (e.g. contaminated site cleanup)
over and above the costs normally incurred in development.
To create opportunities for affordable housing.
To enhance and diversify the city of Elk Rivers economic base.
To significantly increase the city of Elk Rivers tax base.
III.
POLICIES FOR THE USE OF TIF
a.
When possible, TIF shall be used to finance public improvements
with the project. The priority for the use of TIF funds is:
1.
Public improvements, legal, administrative, and engineering cost
2.
Site preparation, site improvement, land purchase, and demolition.
3.
Capitalized Interest and Bonding Costs.
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498942v2 JSB EL185-13
b.
Housing TIF Districts will primarily be utilized to assist housi
following priorities:
1.
Senior Housing: Rental housing in which at least 80% of the unit
are occupied by at least one resident who is 55 years of age or
older;
2.
Workforce Housing: Rental housing in which (i) at least 20% of t
units are occupied by residents whose family income does not
exceed 50% of the area median income and at least [60%] of the
units are occupied by residents whose family income does not
exceed [110%] of the area median income, or (ii) at least 40% of
the units are occupied by residents whose family income does not
exceed 60% of the area median income and at least [40%] of the
units are occupied by residents whose family income does not
exceed [110%] of the area median income;
3.
High Density Housing: (i) At least ___ rental housing units [wit
retail or commercial on the ground floor not to exceed 20% of
square footage of building] [located in the downtown area] or (ii) at
least ___ owner occupied housing units per acre
4.
Owner Occupied housing;
5.
Redevelopment: Housing developed on a site where significant
blighting conditions will be removed as a result of development;
6.
Priority Locations: Housing located in ______________ areas of
the City.
c.
Redevelopment and Renewal and Renovation TIF Districts will prim
utilized to assist development meeting the following priorities:
1.
Priority Locations: Development located in ______________ areas
of the City.
2.
Housing which meets one of the priority conditions listed in (b)
above.
3.
Commercial/industrial development which meets one of the
priority conditions listed in (d) below.
d.
Economic Development TIF Districts will primarily be utilized to
development meeting the following priorities:
1.
Priority Locations: Development located in ______________ areas
of the City.
2.
Quality Jobs: Development which creates (i) at least [2] jobs at
wage of $18+/hour per $1,000 of public assistance; (ii) at least[5]
jobs at a wage of $14+/hour per $1,000 of public assistance; or
at least [10] jobs at a wage of $11+/hour per $1,000 of public
assistance.
3.
Additional Tax Base: Development which creates an increase in
taxable market value of the property of at least ___%.
4.
Purpose: (i) Manufacturing, [(ii) research and development
combined with manufacturing, warehouse or distribution] or (iii)
development which creates at least __ jobs per square foot of
building area.
e.
When possible, TIF shall be used to prioritize projects that contribute to the
goals of Energy City by (i) promoting sensible use of energy, OR
City of Elk River Tax Increment Financing Policy & Application
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498942v2 JSB EL185-13
significant energy efficient design &/or materials in constructi
IV.
STATUTORY TIF DISTRICTS
[Minn. State Statutes 469.174, Subd.
Redevelopment District
10; 469.176, Subd. 4j]
Buildings,streets,otherimprovementsoccupy70%ofthearea,and,
more than 50% of the main buildings are substandard (substantial
renovation or clearance justified; cost of attaining State building code
exceeds15%ofthecostofanewstructure).
At least 90% of the tax increment revenues must be used
to correct the conditions that allow redevelopment district
designation. Such costs include: land acquisition,
demolition, land clearance, utility installation, roads,
sidewalks, and parking facilities.
Maximum term 25 years after receipt of the first increment.
[Minn. State Statutes 469.174,
Renewal & Renovation District
Subd. 10a; 469.176, Subd. 4j]
Buildings, street, otherimprovements occupy 70% of area;
and at least 20%ofthe main buildings are substandard (as
defined under Redevelopment District); and, 30% of the other
buildings require substantial renovation or clearance to
remove conditions such as inadequate street layout,
incompatible uses, overcrowding, obsolete buildings, or
other identified hazards to community health, safety, and
general welfare. These conditions must be reasonably
distributed throughout the geographic area of the district.
At least 90% of the tax increment revenues must be used to
finance the cost of correcting the conditions (i.e. land
acquisition, demolition, land clearance, utility installation, roads,
sidewalks, and parking facilities).
Maximum term 15 years after receipt of the first increment.
[Minn. State Statutes
Economic Development District
469.174, Subd. 12, 469.176, Subd. 4c]
A project found to be in the public interest because:
It will discouragea business from moving operations
to another state or municipality; or,
It will result in increased local employment; or,
It will preserve and enhance the tax base.
At least 85% of the facilities must be used for:
the manufacturing or production of tangible personal
property, including processing resulting in the change
in condition of the property;
warehousing, storage, and distribution of tangible
personal property, excluding retail sales;
research and development related to the activities
listed in clause (1) or (2) of the statutes ;
telemarketing if that activity is the exclusive use of the
property;
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tourism facilities; or
space necessary for and related to the activities listed
in clauses (1) to (5) of the statutes.
Maximum term 8 years after receipt of the first increment.
[Minn. State Statutes 469.174, Subd. 11,
Housing District
469.176, Subd. 4d, 469.1761]
Aprojectforlow&moderateincomehousing
occupancy. A project does not qualify if more than
20% of the square footage of improvements are for
commercial,retailorothernon-housinguses.
Tax increment revenue must solely finance
housing project costs, which may include
public infrastructure.
For owner-occupied housing, 95% of the units must
beinitially purchased and occupied byindividuals
qualifying as low and moderate income under current
Federal schedules. For rental housing,50(i) at least
20% of the units must be occupied by residents whose
family income does not exceed 50% of the area
median income or (ii) at least 40% of the units must
be occupied by persons whoseincome is 80% or
lessresidents whose family income does not exceed
60% of thearea mediangrossincome.
Maximum term 25 years after receipt of the first
increment.
[Minn. State Statutes 469.174,
Soils Condition District
Subd. 19, 469.176, Subd. 4b]
Aproject where presence of hazardous substances, pollution,
orcontaminantsrequires removalor remedial action for use;
and, the estimated cost of remediation exceeds the lands fair
market value, or, exceeds $2persquare foot.
Tax increment may be used only to:
Acquire parcels on which the improvements will
o
occur;
Pay for the cost of removal or remedial action;and
o
Pay for the administrative expenses of the TIF
o
Authority allocable to the district.
Maximum term is 20 years after receipt of the first
increment.
V.
PROJECT REQUIRMENTS
In addition to complying with all statutory guidelines, projects
meet the following requirements. However, it should not be presum
meeting this set of criteria will automatically be approved.
a.
TIF assistance may be provided to the developer upon receipt of
increment by the city, otherwise referred to as the pay-as-you-go method.
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498942v2 JSB EL185-13
Requests for up front financing will be considered on a case-by-case basis.
b.
A maximum of ten percent (10%) of any tax increment received fro
district will be retained by the city to reimburse administrativ
c.
Any developer receiving TIF assistance shall provide a minimum of te
percent (10%) owner cash equity investment in the project.
d.
TIF will not be used to purchase property where land and/or prop
is in excess of fair market value.
e.
Developer shall be able to demonstrate a market demand for a proposed
project. TIF shall not be used to support purely speculative pr
f.
TIF will not be utilized in cases where it would create an unfai
significant competitive financial advantage over other projects in the area.
g.
TIF shall not be used for projects that would place extraordinar
on city services or for projects that would generate significant
impacts [unless those impacts can be corrected at a cost not greater tha
tax increments generated by the project].
h.
The developer must provide adequate financial guarantees to ensu
completion of the project, including, but not limited to: minimu
agreements, letters of credit, personal guaranties, etc.
i.
The developer shall adequately demonstrate, to the citys sole satisfaction, an
ability to complete the proposed project based on past developme
experience, general reputation, and credit history, among other
including the size and scope of the proposed project.
j.
For the purposes of underwriting the proposal, the developer sha
any requested market, financial, environmental, or other data re
the city or its consultants.
k.
All TIF proposals shall optimize the private development potentisite.
VI.
PROJECT QUALIFICATIONS
All TIF projects considered by the city of Elk River must meet a
requirements:
a.
To be eligible for TIF, a project shall result in:
i.
The new construction of a minimum of 25,000 square feet;
ii.
A minimum increase of $37,500 per year in property taxes, excluding
the state portion; and
iii.
Have a market value of at least $1,250,000 upon completion.
b.
one
The project shall (i) meet at least or more of the objectives set forth in
City of Elk River Tax Increment Financing Policy & Application
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Section IIand, (ii) meet at least one or more of the priorities set forth in
all
Section III b-d for the applicable type of TIF District and (iii) satisfy the
provisions set forth in Section IIIVof this document.
c.
The developer shall demonstrate that the project is not financia
but-for the use of TIF.
d.
The project shall comply with all provisions set forth in the Ta
Financing Act, Minnesota Statutes 469.124469.174to 469.134,469.1794,
inclusive, as amended, and, as applicable either Minnesota Statutes 469.174 to
469.1794, inclusive,469.001 to 469.047, inclusive, or Minnesota Statutes
469.090 to 469.1082, inclusive, or Minnesota Statutes 469.124 to
inclusive, allas amended.
e.
The project must be consistent with the citys Comprehensive Pla
Use Plan, and Zoning Ordinances.
of the following public
f. A Non-Housing project shall serve at least two
purposes:
Creation of jobs with livable wages and benefits.
Significantly increase the citys tax base.
Enhancement or diversification of the citys economic base.
Industrial development that will spur additional private investm
the area.
Fulfillment of defined city objectives such as those identified
citys Comprehensive Plan and the citys Economic Development
Strategic Plan, among others.
Removal of blight or the rehabilitation of a high profile or priority
site
two
g. A Housing Project shall serve at least of the following public purposes:
Enhancement or diversification of the citys housing stock.
Development that will spur additional private investment in the area.
Fulfillment of defined city objectives such as those identified
citys Comprehensive Plan and the citys Housing and
Redevelopment Strategic Plan, among others.
Removal of blight or the rehabilitation of a high profile or priority
site.
VII.
SUBSIDY AGREEMENT & REPORTING REQUIRMENTS
All developers/businesses receiving Tax Increment Financing assi
city of Elk River shall be subject to the provisions and require
citys Business Subsidy Policy as amended and Minnesota Statutes Sections 116J.993
to 116J.995 (the Minnesota Business Subsidy Law ), if applicabl
VIII.
PUBLIC INFORMATION NOTICE
Generally, correspondence to and from Staff is considered public
Specific data related to a financial assistance request is deemed not public: (e.g.)
City of Elk River Tax Increment Financing Policy & Application
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498942v2 JSB EL185-13
Financial Information, Financial Statements, Net worth Calculati
Income and Expense projections, Balance Sheets, Customer Lists,
returns. When public financial assistance is received, only the following remains not
public: Business Plans, Income and Expense projections, Custome
returns, design, market, and feasibility studies not paid for wi
city allows an applicant to submit sensitive financial information directly to the citys
financial consultant, for additional security.
IX.
APPLICATION PROCESS FOR TIF
1.
Meet with appropriate EDA and City Staff to discuss the scope ofproject, public
participation being requested, and other information as may be n
2.
Applicant submits the completed application along with a $10,000
deposit. The application deposit will be used toward the cost of
the evaluation of financial feasibility, establishment or modific
district, and preparation of legal documents and agreements. An
of $10,000 will be required for projects that require meeting st
domain and/or redevelopment substandard tests. Projects that require profes
services in excess of the initial deposit shall reimburse the ci
expenses.
3.
Staff reviews the application and completes the Commercial-Industrial and/or
Housing Worksheets. The Application and Commercial-Industrial and/or Housing
Worksheets are primarily designed to score the desirability of t.
4. The EDA Finance Committee reviews the request
4.
5. Results of the Commercial-Industrial and/or Housing Application and
Worksheetsstaff review are submitted to the EDA Finance Committee for
recommendation to the appropriate governing authorities (EDA or
City Council for approval or denial of the request.
5.
6. If preliminary approval is granted, the Tax Increment Financing Plan, along with
all necessary notices and, resolutions are prepared by city staf
6.
7. If Planning Commission action is required, it will be necessary
make application to the Commission for Concept Review.
7.
8. A development agreement based upon the terms will be prepared in
economic development plan or redevelopment plan and tax incremen
if required.
8.
9. Notices are published and sent to the county and school board.
9.
10. A public hearing may be set, if required by statutes, at which t
will consider a final recommendation related to the formal appli
necessary financial analysis and preparation of the detailed platy Council
City of Elk River Tax Increment Financing Policy & Application
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498942v2 JSB EL185-13
shall take action on the project as required under the Tax Incre
statutes
10.
11. The City Council grants final approval or denial of the request.
X.
SIGNATURE
I certify that __________________________(legal business name)is defined as a Small
Business, For-Profit and is not a religious, Political, Casino, Sports Facilit
Enterprise. I further certify that all information provided in t
correct to the best of my knowledge. I authorize the city of Elk River and the Finance
Committee to check credit references and verify financial and ot
agree, if approved, to the loan security and guarantees required
agree to provide any additional information as may be requested by the city.
Agreement to Pay Costs of Review
It is the policy of the city of Elk River to require applicants
in reviewing and acting upon applications, so that these costsare not borne by the taxpayers
of the city. These costs include all of the citys out-of-pocket costs for expenses, including
the citys costs for review of the application by the citys Fin
Attorney, or other consultants, recording fees, and necessary publication costs.
The application deposit covers anticipated costs; costs incurred
deposit will be invoiced as incurred, and payment will be due wi
Application deposit is not refundable, though any unused portion is returned to the
applicant. If payment is not received as required by this agreem
application review process and may deny the application for fail
requirements for processing the application. Payment for costs will be required whether
application is granted or denied.
The undersigned has received the citys policy regarding the pay
understands that reimbursement to the city of costs incurred in reviewing the application will
be required, agrees to reimburse the city as required in the pol
billed by the city, and agrees that the application may be denie
city for costs as provided in the policy.
Note:All owners with ownership interests greater than 20% will be req
personal guarantees and a minimum assessment agreement if up fro
project is required.
APPLICANT SIGNATURE:
TITLE: DATE:
City of Elk River Tax Increment Financing Policy & Application
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498942v2 JSB EL185-13
ELK RIVER ECONOMIC DEVELOPMENT
TAX INCREMENT APPLICATION
CONTACT INFORMATION
Legal Name of Business:
Project Site Address:
City / State / Zip
Contact Person(s)
Business PhoneFax
Home PhoneEmail
Check One:Proprietor CorporationPartnership
Federal ID #State ID #
PROJECT INFORMATION
Property Information (please print)
Address: ______________________________Parcel Number: 75 - _____ - _________
Legal Description:
Site Plan and Preliminary Construction Plans Attached: ____ ____ No
The project will be:
Redevelopment District
Renewal & Renovation District
Economic Development
Housing District
Soils Condition District
Amount Requested: $Total Project Cost: $
The project will be: ____Owner Occupied ____Leased Spac
If Leased Space ____ Percent Occupied 6 months after Certificate
City of Elk River Tax Increment Financing Policy & Application
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498942v2 JSB EL185-13
Total Amount of Tax Increment Requested: $ over years.
City Portion: Annual $ Total $
County Portion:Annual $Total $
ISD 728 Portion:Annual $Total $
Amount of Tax Increment Requested for:
Land Purchase $
Public Improvement $
Site Improvement $
Current Real Estate Taxes on Project Site: $
Estimated Real Estate Taxes upon Completion: Phase I $
Phase II $
Construction Start Date________ Construction Completion Date_
If Phased Project: Year % Completed
Year % Completed
Percent of project complete on December 31, current year. ______
Brief description of the business entities, business, including
service:
Brief description of the proposed project:
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498942v2 JSB EL185-13
PUBLIC PURPOSE
It is the policy of the city of Elk River that the use of Tax Increment Financing should result
in a benefit to the public.
A Non-Housing project shall serve at least two of the following public purposes:
Creation of jobs with livable wages and benefits.
Significantly increase the citys tax base.
Enhancement or diversification of the citys economic base.
Industrial development that will spur additional private investm
Fulfillment of defined city objectives such as those identified
Comprehensive Plan and the citys Economic Development Strategic Plan,
among others.
Removal of blight or the rehabilitation of a high profile or pri
A Housing Project shall serve at least two
of the following public purposes:
Enhancement or diversification of the citys housing stock.
Development that will spur additional private investment in the area.
Fulfillment of defined city objectives such as those identified
Comprehensive Plan and the citys Housing and Redevelopment Stra
among others.
Removal of blight or the rehabilitation of a high profile or priority site.
Please indicate how this project will serve a public purpose:
JOB CREATION/RETENTION
Number of existing jobs:
Number of jobs created by project:
Average hourly wage of jobs created/retained:
Job Creation/Retention
Average Expected
Number Hourly AnnualAre the Jobs Newly Hiring
Job Titleof Jobs WageSalary Created or Retained Date
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498942v2 JSB EL185-13
Project Consultant Contacts
Attorney Name
Address
Phone Fax Email
Accountant Name
Address
Phone Fax Email
Contractor Name
Address
Phone Fax Email
Engineer Name
Address
Phone Fax Email
Architect Name
Address
Phone Fax Email
City of Elk River Tax Increment Financing Policy & Application
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498942v2 JSB EL185-13
SOURCES & USES
SOURCESNAMEAMOUNT
Bank Loan$
Other Private Funds $
Owner Cash Equity $
Fed Grant/Loan$
State Grant/Loan$
EDA Micro Loan $
Tax Increment $
IDBonds$
TOTAL$
USES AMOUNT
Land Acquisition $
Site Development $
Construction $
Machinery & Equipment $
Architectural & Engineering Fees $
Legal Fees $
Interest During Construction $
Debt Service Reserve $
Contingencies $
TOTAL $
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498942v2 JSB EL185-13
ADDITIONAL DOCUMENTATION AND CHECKLIST
Applicant to provide the following documentation:
A) Application deposit of $10,000, application deposit is not refun
though any unused portion is returned to the applicant.
_______B) Written Narrative: Please give a brief summary of the project and
how this subsidy will impact your project. The narrative should
include a statement demonstrating how the project meets the publ
purpose.
B) Written business plan, including the following:
1. Description of Business
2. Ownership
3. Management
4. Date Established
5. Products/Services
6. Future Plans
7. Market for Business
C) Financial Statements for Past Two Years
Profit & Loss Statement
Balance Sheet
______ Tax Returns
D)Current Financial Statements
Profit & Loss Statement to Date
Balance Sheet to Date
E) Project ProForma:
1.
Operating cash flow assumptions that include:
a. Projected revenues,
b. Operating expenses,
c. Net operating income, and
d. Annual debt service and loan payments.
2.
Financial Projections for Term of abatement, up to 10 Years
F) Personal Financial Statements of all owners with ownership inter
greater than 20%.
Profit & Loss
Current Tax Return
G)Letter of Commitment from Applicant Pledging to Complete
During the Proposed Project Duration.
H) Letter of Commitment from the Other Sources of Financing,
Stating Terms and Conditions of their Participation in
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Project.
I)
Site and Construction Plans and Itemized Project Construction
Statement
J) Attach the following documentation as Exhibits
Exhibit A Corporation/Partnership Description
Exhibit B Description of Project
Exhibit C List of Shareholders/Partners
Exhibit D But-For Analysis
Exhibit E List of Prospective Lessees
Exhibit F Legal Description and PID Number(s)
Note: All owners with ownership interest greater than 20% will be required to sign p
guarantees and a minimum assessment agreement if up front financ
required.
The undersigned certifies that all information provided in this correct
to the best of the undersigneds knowledge. The undersigned aut
River to check credit references and verify financial and other
also agrees to provide any additional information as may be requsted by the city after the
filing of this application.
Applicant Name Date
City of Elk River Tax Increment Financing Policy & Application
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498942v2 JSB EL185-13
SAMPLE BUT-FOR ANALYSIS
WITH NOWITH
TAX INCREMENTTAX INCREMENT
SOURCES AND USESSOURCES AND USES
SOURCESSOURCES
Mortgage 9,600,000 8,667,000
Equity 2,400,000 2,400,00
Tax Increment Financing0933,000
TOTAL SOURCES 12,000,000 12,000,000
USESUSES
Land 1,500,000 1,500,000
Site Work300,000300,000
Soil Correction 468,000 468,000
Demolition 100,000 100,000
Relocation 65,000 65,000
Subtotal Land Costs 2,433,000 2,433,000
Construction 6,750,000 6,750,000
Finish Manufacturing 250,000 250,000
Subtotal Construction Costs 7,000,000 7,000,000
Soft Costs 350,000 350,000
Taxes 35,000 35,000
Finance Fees 850,000 850,000
Project Manager 542,000 542,000
Developer Fee 540,000 540,000
Contingency 250,000 250,000
Subtotal Soft Costs 2,567,000 2,567,000
TOTAL USES 12,000,000 12,000,000
Income Statement Income Statement
Sq. Ft. Per Sq. Ft. Sq. Ft. Per Sq. Ft.
Rent-Space 1 100,000 $8.00 800,000 100,000 $8.00 800,000
Rent-Space 2 25,000 $8.50 212,500 25,000 $8.50 212,500
Rent-Space 3 25,000 $9.00 225,000 25,000 $9.00 225,000
Other 0 $0.00 0 0 $0.00 0
1,237,500 1,237,500
Mortgage 20 Term 1,051,646 20 Term 949,439
9.00% Interest 9.00% Interest
9,600,000 Principal8,667,000 Principal
Net Income 185,854 288,061
Total Return on Equity 7.74% 12.00%
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TAX INCREMENT FINANCING APPLICATION REVIEW WORKSHEET FOR
NON-HOUSING PROJECTS
TO BE COMPLETED BY CITY STAFF
1. The project meets the criteria set forth in Section IV of the ci
Financing policy.
a) Meets minimum thresholds for size, value, and tax revenue.
b) Meets at least one of the objectives in Section II and satisfies
all of the provisions set forth in Section III.
c) Demonstrates need for TIF with the but-for analysis.
d) Consistent with all city plans and ordinances.
e) Serves at least two public purposes as defined in Section IV (f)
______ f)Meets the appropriate statutory TIF district requirements
2. Ratio of Private to All Public Investment in Project: Points:
$ Private investment 5:1 5
$ Public Investment 4:1 4
Ratio Private: Public Financing 3:1 3
2:1 2
Less than 2:1 1
3. Job Creation in the city of Elk River:Points:
Number of new jobs as a result of the project. 40+5
Number of existing/retained jobs divided by 2. 30+4
Total 20+3
10+2
Less than 10 1
4. Ratio of Public Investment to Job Creation:Points:
$ Public Investment $15,000 or less 5
Number of new jobs created/retained$20,000 or less 4
new
$ Public Investment per job $22,000 or less 3
$25,000 or less 2
Over $25,000 1
5. Wage Level of new jobs created/retained: Points:
Minimum hourly wage Over $21/ hour 5
of jobs created/retained: $18-21 / hour 4
$14-17 / hour 3
$10-13 / hour 2
Under $10 / hour 1
6. Project size: Points:
The project will result in the construction 80,000+ 5
of square feet 65,000+ 4
50,000+ 3
35,000+ 2
25,000+ 1
City of Elk River Tax Increment Financing Policy & Application
Amended March 2017
Page 19 of 22
498942v2 JSB EL185-13
7. Market Value/Tax Base Generation:Points:
The project will result in a per square foot Industrial Commercial
estimated market value (land and building) $80/sf+$110/sf+5
of $70/sf+$100/sf+4
$60/sf+$90/sf+3
$50/sf+$80/sf+2
$40/sf+$70/sf+1
8. Type of Project: Points:
100% Owner Occupied 5
Mix Owner Occupied & Investment 4
Investment Property3
9. Use: Points:
Manufacturing 5
Research & Development 4
Commercial Redevelopment 3
Warehouse/Distribution 2
Housing 1
10. Likelihood that the project will result in Points:
unsubsidized, spin-off development. High 5
Moderate 3
Low 1
Sub - Total Points: of a possible 45 points.
11. Bonus Points Bonus Points:
The project will be 100% Pay-as-you-go TIF. 3 points
The project contributes to the goals of Energy City. 2 points
Product promotes sensible use of energy, OR
Project utilizes significant energy efficient design&/or
materials in construction.
Total Points: Project Rating: Points: Max Eligibility:
Overall project analysis: High 50-38 points 100%
Moderate 37-29 points 85%
Low 28-20 points 65%
Not Eligible 19-0 points 0%
City of Elk River Tax Increment Financing Policy & Application
Amended March 2017
Page 20 of 22
498942v2 JSB EL185-13
TAX INCREMENT FINANCING APPLICATION REVIEW WORKSHEET-
HOUSING PROJECTS
TO BE COMPLETED BY CITY STAFF
The project must meet the criteria set forth in Section IV of th
Financing policy to continue.
a) Meets minimum thresholds for size, value, and tax revenue.
b) Meets at least one of the objectives in Section II and satisfies
all of the provisions set forth in Section III.
c) Demonstrates need for TIF with the but-for analysis.
d) Consistent with all city plans and ordinances.
e) Serves at least two public purposes as defined in Section IV (g)
______ f)Meets the appropriate statutory TIF district requirements
1. Ratio of Private to All Public Investment in Project: Points:
Greater than 7:1 10
$ Private investment 6:1 8
$ Public Investment 5:1 6
Ratio Private: Public Financing 4:1 4
3:1 2
Less than 3:1 1
2. Project provides housing that is restrictedPoints:
to persons 55 years and older: 10
3. Market Value/Tax Base Generation:Points:
Project will result in an estimated
market value per unit $135,000/Unit 5
(land and building) of $125,000/Unit 4
$115,000/Unit 3
$105,000/Unit2
$ 95,000/Unit1
4. Project proposes rehabilitation of existing
housing, housing stock, and maximizes
utilization of existing infrastructure: Points:
10
5. Project proposes a location near existing
jobs, transportation, recreation, retail services,
social services, and schools: Points:
5
City of Elk River Tax Increment Financing Policy & Application
Amended March 2017
Page 21 of 22
498942v2 JSB EL185-13
6. Project includes community/ neighborhood: Points:
facility (pool, community center, etc.) 5
7. Type of Housing Project: Points:
100% Owner Occupied 3
Investment Property2
8. Likelihood that the project will result in Points:
unsubsidized, spin-off development.High5
Moderate 3
Low 1
Sub - Total Points: of a possible 55 points.
9. Point Adjustments Bonus Points:
The project will be 100% Pay-as-you-go TIF. 5 points
The project does not require modification to land use plan. 2 points
The project contributes to the goals of Energy City. 2 points
Product promotes sensible use of energy, OR
Project utilizes significant energy efficient design &/or materi
Total Points: Project Rating: Points: Max Eligibility:
Overall project analysis:
High 64-50 points 100%
Moderate 37-49 points 85%
Low 30-36 points 65%
Not Eligible 0-29 points 0%
City of Elk River Tax Increment Financing Policy & Application
Amended March 2017
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498942v2 JSB EL185-13
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Document 1 IDPowerDocs://DOCSOPEN/498942/1
DescriptionDOCSOPEN-#498942-v1-Elk_River_2017_TIF_POLICY
Document 2 IDPowerDocs://DOCSOPEN/498942/2
DescriptionDOCSOPEN-#498942-v2-Elk_River_2017_TIF_POLICY
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Economic Development Policies and Procedures
Pre-Session Questions
Please limit your responses to an economic development perspective only.
I. Strengths
Identify the top three to five strengths of the City; Specifics are not needed; key phrases, ideas and
observations desired.
II.Issuesand Challenges
Identify the top three to five issues or challenges of the City; specifics are not needed; key phrases, ideas
and observations desired.
III. Short Term Outcomes (1-3 years)
Identify outcomes and results you want to achieve in the short term (1 to 3 years). In three years what
clear and distinct economic development successes do you want to achieve?
IV.Mid-Term Outcomes (3 to 10 years)
Identify outcomes and results you want to achieve in the mid-term (3 to 10 years). During this
timeframe what clear and distinct economic development successes do you want to achieve?
V. Long Term Outcomes
Identify outcomes and results youwant to achieve in the long term. Consider these legacy decisions
that you may not be directly involve d in, but your decisions in the next few yearswill create an
environment or opportunity for the City to capitalizeon them in the long term.
VI. Overall Priorities
We are interested in knowing what your overall priorities are for economic development.Please identify
the top three to five priorities you want to achieve (regardless of timeframe).
VII. Role of City in Economic Development
We are interested in knowing how active or passive you desire the City to be in Economic Development
activities. Please identify the top three to five roles and activities the City shouldundertake and those
that the City should notundertake.Explain why but limit response to bullet points or key phrases.
Thank you very much for your time and input.
Springsted Incorporated