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Honorable Mayor and Members of the City Council <br />City of Link Lakes <br />Page 3 <br />Town Center Construction Fund (Continued) <br />The following table calculates what the price on the remaining "Rehbein and Funkhouser" parcels will <br />need to be just to cover the costs incurred through the end of 1998. In addition to these costs, the sale <br />— <br />prices will need to be sufficient to cover any additional costs that will be incurred in future years, <br />including interest that will be paid in 1999 as the land is sold. Assuming that the former police station <br />land is sold for $50,000 for one acre and the remaining three acres are sold for the appraised value of <br />$82,500 per acre, the remaining parcels will need to be sold for an average of $4.68 per square foot, or <br />approximately $204,000 per acre in order to cover costs incurred through the end of 1998. <br />'- Calculation of Sales Price Needed <br />(to cover costs through 12/31/98) - <br />Current deficit to cover <br />-- Less: <br />"Former Police Station <br />IWO <br />$ 1,827,022 <br />3.0 acres at $82,500 / acre $ 247,500 <br />1.0 acre at $50,000 $ 50,000 <br />Equals Cost to be recovered in Town Center Project $ 1,529,522 <br />"hotel site" <br />"retail strip on north end <br />of rehbien parcel" <br />Remaining Acres to sell <br />4.5 acres <br />3.0 acres <br />7.5 =___ »> <br />Approximate price per acre needed (through 1998) <br />Approximate price per foot needed (through 1998) <br />7.5 <br />$ 203,936 <br />$ 4.68 <br />We recommend that the City continue to closely monitor the status of the Town Center Fund and <br />identify other revenue sources if and when they are needed. <br />— Tax Abatements Used as an Economic Development Tool <br />During the course of the audit, it was noted that the EDA and Council have given consideration to using <br />tax abatements incentives as a method to attract economic development. We recommend that the City <br />remember to keep any abatement amount in mind when the property tax levy is set for the following <br />year. The following year's general levy will need to be increased to include such abated amounts (if <br />any) and that the general levy will again be subject to levy limits in pay 2000. <br />— <br />