09-06-2022 Council Work Session Packet

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City of Lino Lakes and Lino Lakes Economic Development Authority (2) 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 and 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. Factual basis: Proposed development not expected to occur. The project includes the development of new large industrial buildings comprising of approximately 451,000 square feet in an undeveloped area of the City. The proposed developer of the site has submitted information to the city demonstrating that the development of this site is not financially feasible without the assistance provided in this TIF Plan. The City has determined that the proposed development would not occur but for the financial assistance provided in this TIF Plan because of the high cost of construction at the site due to the need for significant site development, soils correction and public improvement infrastructure costs necessary for development to occur. Specifically, soils correction/lime stabilization, aggregate piers, site preparation and site fill, public utility relocation and offsite road extension. Due to the high costs of investment for the proposed project, including site improvements, public improvements, soil correction, and infrastructure costs that would be incurred by the developer in conjunction with development of the project, the developer has stated that the project as proposed would not occur without the financial assistance provided by the City, as it would not be economically feasible without financial assistance. The City finds the use of tax increment necessary to finance a portion of the site improvement, public infrastructure, soil correction and infrastructure costs to facilitate development of the project and developer investment. The City anticipates providing financial assistance on a pay-as-you-go basis. Therefore, the City has determined that the proposed development would not occur but for the financial assistance provided in this TIF Plan because of the increased costs related to development within the TIF District and construction of the project. The cost of construction of the project and availability of revenues to support repayment of debt has created a financial gap that requires a level of public assistance. No higher market value expected: The project to be constructed within TIF District No. 1-14 requires significant investment to be financially feasible. To commence construction of the new industrial project, assistance with financing a portion of those costs will be necessary. The financial assistance provided under this TIF Plan will help offset the costs of the improvements. Given the nature of this project, there is no reasonable expectation of any development occurring that would generate as much market value increase as is estimated to be generated by the proposed development by the new business. Therefore, the City has concluded that substantial development at this particular site --and hence any significant increase in market value --is not reasonably expected to occur unless the City provides tax increment assistance as described in this Tax Increment Plan. To summarize the basis for the City's findings regarding alternative market value, in accordance with Minnesota Statutes, Section 469.175, Subd. 3(d), the City makes the following determinations: a. The City's estimate of the amount by which the market value of the site will increase without the use of tax increment financing is $0 (for the reasons described above), except some unknown amount of ap ffraft tion. Baker Tilly Municipal Advisors, LLC Page 5