09-22-2021 Workshop Packet - Laserfiche WebLink

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The total development costs from the developer’s financial materials is illustrated in the table below. Additional information regarding the proposed funding sources is anticipated to be provided in the near future. Sources Amount Uses Amount Debt Acquisition $380,824 Other/Soft/Due Diligence $141,500 Equity Construction $5,957,749 Total Total $6,480,073 Tax increment financing has been identified as a tool that would be provided as pay-as-you-go, meaning as reimbursement for eligible costs, and would not be an upfront funding source Estimated Total TIF Eligible Costs Phase 2 Amount Extra Subsoils $1,008,000 Extra Environmental $15,000 Total $1,023,000 Project Financing There are generally two ways in which assistance can be provided for most projects, either upfront or on a pay- as-you-go basis. With upfront financing, the City would finance a portion of the developer’s initial project costs through the issuance of bonds or as an internal loan. Future tax increment would be collected by the City and used to pay debt service on the bonds or repayment of the internal loan. With pay-as-you-go financing, the developer would finance all project costs upfront and would be reimbursed over time for a portion of those costs as revenues are available. Pay-as-you-go-financing is generally more acceptable than upfront financing for the City because it shifts the risk for repayment to the developer. If tax increment revenues are less than originally projected, the developer receives less and therefore bears the risk of not being reimbursed the full amount of their financing. However, in some cases pay as you go financing may not be financially feasible. With bonds, the City would still need to make debt service payments and would have to use other sources to fill any shortfall of tax increment revenues. With internal financing, the City reimburses the loan with future revenue collections and may risk not repaying itself in full if tax increment revenues are not sufficient. The project financing as requested includes pay-as-you- go for reimbursement of eligible costs. Tax Increment Revenue Assumptions We have been provided with a range of taxable value estimates for the project. To estimate the amount of available TIF revenues generated by the proposed project, certain assumptions were made based on the value of the project, construction schedule, and anticipated financing terms. • Total existing value of $469,200 o Parcel ID: 062922210040 o Base value as of Jan. 1, 2021 o Original net tax capacity (ONTC) of $9,384 o Assuming classification as commercial-industrial ▪ 1.5% first $150,000 and 2% value above $150,000 • Estimated total market value upon completion o Range of $80-$90 per square foot • Incremental value based on difference between existing and new land/building value • Construction commences in 2021 and is completed in 2022 o Project values 100% complete for assess 2023 and taxes payable 2024 • Net present value (discount) rate of 4% • 3% annual market value inflation