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The total development costs from the developer’s financial materials is illustrated in the table below. Additional <br />information regarding the proposed funding sources is anticipated to be provided in the near future. <br /> <br />Sources Amount Uses Amount <br />Debt (est. 75%) $4,860,055 Acquisition $380,824 <br /> Other/Soft/Due Diligence $141,500 <br />Equity (est. 25%) $1,620,018 Construction $5,957,749 <br /> <br />Total $6,480,073 Total $6,480,073 <br /> <br />Tax increment financing has been identified as a tool that would be provided as pay-as-you-go, meaning as <br />reimbursement for eligible costs, and would not be an upfront funding source. The developer will use private <br />funding sources including equity and debt to finance initial project costs <br /> <br />Estimated Total TIF Eligible Costs <br /> <br />Estimated Project Costs Amount <br />Extra Subsoils $1,008,000 <br />Extra Environmental $15,000 <br /> <br />Total $1,023,000 <br /> <br />Project Financing <br />There are generally two ways in which assistance can be provided for most projects, either upfront or on a pay- <br />as-you-go basis. With upfront financing, the City would finance a portion of the developer’s initial project costs <br />through the issuance of bonds or as an internal loan. Future tax increment would be collected by the City and <br />used to pay debt service on the bonds or repayment of the internal loan. With pay-as-you-go financing, the <br />developer would finance all project costs upfront and would be reimbursed over time for a portion of those costs <br />as revenues are available. <br /> <br />Pay-as-you-go-financing is generally more acceptable than upfront financing for the City because it shifts the <br />risk for repayment to the developer. If tax increment revenues are less than originally projected, the developer <br />receives less and therefore bears the risk of not being reimbursed the full amount of their financing. However, <br />in some cases pay as you go financing may not be financially feasible. With bonds, the City would still need to <br />make debt service payments and would have to use other sources to fill any shortfall of tax increment revenues. <br />With internal financing, the City reimburses the loan with future revenue collections and may risk not repaying <br />itself in full if tax increment revenues are not sufficient. The project financing as requested includes pay-as-you- <br />go for reimbursement of eligible costs. <br /> <br />Tax Increment Revenue Assumptions <br />We have been provided with a range of taxable value estimates for the project. The available TIF revenues <br />generated by the proposed project are based on certain assumptions relative to the project outlined below. <br />• Total existing value of $469,200 <br />o Parcel ID: 062922210040 <br />o Base value as of Jan. 1, 2021 <br />o Original net tax capacity (ONTC) of $9,384 <br />o Assuming classification as commercial-industrial <br /> 1.5% first $150,000 and 2% value above $150,000 <br />• Estimated total market value upon completion <br />o $80 per square foot <br />o $6,429,200 total taxable value <br />• Incremental value based on difference between existing and new land/building value <br />• Construction commences in 2021 and is completed in 2022 <br />o Project values 100% complete for assess 2023 and taxes payable 2024 <br />• Net present value (discount) rate of 4% <br />• 3% annual market value inflation <br />