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<br />Virchow Krause, LLP
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<br />Memo
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<br />To: Michael Grochala, Community Development Director, City of Lino Lakes
<br />Sarah Cotton, Finance Director, City of Lino Lakes
<br />From: Mikaela Huot, Director
<br />Date: July 1, 2019
<br />Subject: Review of Financial Assistance through Tax Increment Financing (TIF) for
<br />Proposed Lyngblomsten Senior Care Campus Housing Project
<br />
<br />Updated Information for July 1 Work Session following June 24 City Council Work Session
<br />The purpose of this memorandum is to provide additional information for Council consideration following the
<br />June 24 City Council Work Session. There were two items the Council requested additional information for:
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<br />1) Illustration of possible ways to reduce term of the TIF District
<br />2) Construction cost audit – pre and post construction
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<br />TIF District Term
<br />The following chart provides an illustration of several scenarios that may impact the duration of the TIF District.
<br />We focused on an annual market value inflator and overall increase in starting valuation of the project.
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<br /> Scenario 1 Scenario 2 Scenario 3 Scenario 4
<br />Total Estimated Taxable Value $28,991,000 $28,991,000 $31,890,100 $34,789,200
<br /> (10% increase) (20% increase)
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<br />Annual Market Value Inflator 0% 3% 3% 3%
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<br />Total Number of Years 8.5 7.5 7 6+
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<br />Estimated Gross Annual Increment $411,237 $411,237 $453,691 $496,145
<br />Estimated Annual City Retained (5%) $20,562 $20,562 $22,685 $24,807
<br />Estimated Net Annual Increment (95%) $390,675 $390,675 $431,006 $471,338
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<br />Total Gross Tax Increment $3,701,133 $3,668,729 $3,485,203 $3,810,504
<br />City Retainage (5%) $185,058 $183,437 $174,262 $190,524
<br />Net Amount Available (95%) $3,516,075 $3,485,292 $3,310,941 $3,619,980
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<br />Maximum Amount to Developer $3,218,000 $3,218,000 $3,218,000 $3,218,000
<br />Estimated Surplus $298,075 $267,292 $92,941 $401,980
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