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07/02/2019 EDAC Packet
CITY OF LINO LAKES ECONOMIC DEVELOPMENT ADVISORY COMMITTEE MEETING Tuesday, July 2, 2019 8:00 A.M. Community Room AGENDA 1. CALL TO ORDER AND ROLL CALL 2. APPROVAL OF MINUTES: May 2, 2019 3. DISCUSSION ITEMS A. Lyngblomsten Tax Increment Financing Request B. Project Updates 4. ADJOURN CITY OF LINO LAKES ECONOMIC DEVELOPMENT ADVISORY COMMITTEE MINUTES DATE: May 2, 2019 MEMBERS PRESENT: Jim Schueller, Thomas Colgan, Andrew Cravero, Patrick Kohler, Nathan Vojtech MEMBERS ABSENT: Julie Jeffrey -Schwartz, Don Johnson, Michael Ruhland, Chad Wagner OTHERS PRESENT: Mike Grochala, Mara Strand, Monika Mann APPROVAL OF MINUTES It was moved by Mr. Cravero to approve the minutes from April 4, 2019. The motion was seconded by Mr. Vojtech, passing unanimously. DISCUSSION ITEMS A. BRE Program Update Monika Mann, Community Development Intern, presented the staff report. Mr. Grochala, Community Development Director, explained the relationship with the Anoka County Job Training Center program. A discussion ensued regarding the issue of businesses looking for employees. Suggestions included a round table discussion with business owners, using information from the survey responses to entice other businesses to complete the survey, reaching out to high schools to make students aware of employment opportunities, Pines School and Alternative Learning Center, and making positions more valuable to employees. Mr. Cravero stated Dunwoody and St. Paul College are local technical schools with a 100% placement rate. Board members commented that some high schools are phasing out laborer skills classes. Mr. Colgan explained a Minnesota Banker's Association study that found trade unions do a better job of hiring young people because a progression plan is laid out. Staff explained the expansion results from the BRE survey. Mr. Vojtech stated that Lino Lakes is not a great area for new consumers because the area lacks affordable or rental housing for entry level workers. There is a good job market to the north with individuals that would prefer to work close to home as opposed to driving into the cities. Next steps will include sending a list of non -responsive businesses to EDAC members to identify relationships. After meeting with Anoka County's workforce program, staff will work with businesses to learn more about what is needed in the Apollo Business Park. B. Projects Updates Mr. Grochala provided an update on the following projects: • Eastside Villas was recently approved. • Model homes are under construction in the Watermark project. • Saddle Club 4th Addition is going through the approval process. • Nature's Refuge gained watershed approval, preliminary plat approval, and anticipates final plat approval. • Lyngblomsten received preliminary land use approval. Financial discussions are taking place with City Council. • Mill and overlay on Birch Street from the S-Curse to Centerville Road will take place this summer. Construction of Birch Street from Ware Road to S-Curve planned for summer of 2021. • Discussions with Ramsey and Anoka County officials regarding the County Road J interchange. • Comp Plan distribution approval is going to City Council. • MnTech Corridor is moving forward. The drone video will be revised to show the area in the summer. • Broke ground at All Seasons Rental. • Board appointments are still in process. ADJOURNMENT The meeting was adjourned at 8:58 A.M. 2 ECONOMIC DEVELOPMENT ADVISORY COMMITTEE AGENDA ITEM 3A STAFF ORIGINATOR: Michael Grochala, Community Development Director EDAC MEETING DATE: July 2, 2019 REQUEST: Lyngblomsten Request for Financial Assistance BACKGROUND At the May 6, 2019 City Council work session staff received direction to prepare the tax increment financing plan, associated contract for private development and schedule the required hearings. Based on the District Framework, discussed at the meeting, the reimbursable costs will not exceed $3,600,000. Council requested that further evaluation include methods to reduce the duration of the district to the extent possible. Staff has been working with Baker Tilly, city financial consultant, and Kennedy and Graven, city development counsel, to draft the plan and contract that stipulates the minimum improvements, developer requirements and potential reductions in increment and/or city reimbursement. Mikaela Huot of Baker Tilly has provided an updated memo regarding the proposed use of tax increment financing and key elements of the contract. Ms. Huot will be present at the meeting to review the memo and recommendations. The City Council will be holding a public hearing and considering adoption of the TIF plan on July 8, 2019. The EDA will also hold a meeting on July 8, 2019 for both the TIF Plan and the Contract for Private Development. EDAC CONSIDERATION Staff is requesting recommendation from EDAC regarding use of Tax Increment Financing for the Lyngblomsten project. ATTACHMENTS 1. BakerTilly Memo, dated June 19, 2019 2. Draft TIF Plan 3. Draft Contract for Private Development Or* bakertitty nowjoined with Springsted and Umbaugh Memo To: Michael Grochala, Community Development Director, City of Lino Lakes Sarah Cotton, Finance Director, City of Lino Lakes From: Mikaela Huot, Director Date: June 24, 2019 Application Review for Financial Assistance through Tax Increment Subject: Financing (TIF) for Proposed Lyngblomsten Senior Care Campus Housing Project and Recommendation for District Framework Background The City of Lino Lakes received an application for financial assistance through tax increment financing (TIF) to assist with financing a portion of the extraordinary development costs related to the construction of a senior care building with approximately 143 independent and assisted living units and approximately 56 skilled care units with 20 detached rental town homes. The project also includes acquisition of several properties on the corner of County Road J and CSAH 49 for demolition and installation of new infrastructure, and where the senior housing development will not occur but will present future development opportunities following redevelopment. The creation of a tax increment financing (housing) district would facilitate the development with the requirement that at least 20% of the units would be occupied by individuals at 50% of the area median income. We have reviewed the application and performed financial analysis for the project, including numerous discussions with the City Council at work sessions to review the financing components of this project and to understand the developer's request and need for financial assistance. The purpose of this memorandum is to provide an overview of the anticipated financing package to the developer following those discussions, as well as a summary of the draft Tax Increment Financing (TIF) plan or the proposed Tax Increment Financing (Housing) District No. 1-13. Proposed Financial Assistance to Developer The application for financial assistance as submitted by the developer included $5.3 million over 15 years for acquisition and development of the project site, followed by subsequent construction of a senior care campus. Through submission of the tax increment financing application and supporting financial information, the developer indicated that the project as proposed would not occur on the current site without financial assistance from the City due to extraordinary costs associated with acquisition of the additional properties and site development/infrastructure improvements. Following thorough review of the project financing components, we have determined that tax increment financing assistance is necessary for the project to proceed as proposed. The developer is not able to obtain the maximum financing amount without the additional revenue stream provided through tax increment necessary to finance the entire project cost and the projected returns are not anticipated to be feasible. The work sessions provided framework to us and City staff that the goal of the City Council was to reduce the duration of assistance to as short of a term as possible. We have been working with City staff following those The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly Virchow Krause, LLP meetings to diligently meet that request. The following table provides a summary of the proposed financing package to the developer. Type of TIF Eligible Cost Financial Assistance Package Initial request $5,300,000 Reduction of request based on financial review $ 1,400,000 Reduction based on fee credits $ 300,000 Net Assistance through TIF est. 9.5 ears $3,600,000 Pooled TIF from Housing District 1-5 $382,000 Proposed TIF Assistance to Developer from TIF 1-13 New Housing TIF District over 8.5 years $3,218,000 We were able to reduce the original request of assistance from 15 years to lesser term by lowering the total reimbursable amount of eligible costs. We further reduced the term through the provision of City fee credits, as standard practice. And lastly, by including the value of the town homes (additional $6.OM) and utilizing pooled TIF dollars already on -hand resulted in a further reduced term estimated to be 8.5 years. In summary the following steps were followed to meet the Council directives: 1. Review and application of fee credits through City policy 2. Including town homes in boundaries of TIF District 3. Use of pooled TIF from existing Housing District 1-5 1. Review and application of fee credits • Using information submitted by the developer in the development application, City staff was able to determine the estimated fee credit amount that is consistent with City policy. The City will provide credit in the amount of approximately $300,000 to the developer for park dedication and trunk utility fees for work on public trail and trunk utility oversizing improvements. This number is an estimate and may change based on actual improvements and contract costs. 2) Including town homes in boundaries of TIF District At the May 6 City Council work session, there was a request to include the town home development within the boundaries of the TIF district to increase the projected revenues and ultimately result in a reduced term of assistance. The total estimated value of the taxable portion as provided by the County for the senior care building is approximately $22.9M. The preliminary value estimates for the town homes is about $300,000/unit resulting in an additional $6.OM of value. This provides more revenues in the TIF District as it captures all incremental taxes of the taxing entities, as opposed to the City's share only should the town homes not be included in the TIF District and go on the general tax rolls. The inclusion results in one less year of needed tax increment assistance reducing the term from an original 10.5 years to 9.5 years to meet the recommended total of $3.6M. Use of pooled TIF from existing Housing District 1-5 • We did additional due diligence to understand potential alternate funding sources that may be available to reduce the term of the TIF District and determined the City has existing funds from its' Housing TIF District No. 1-5 (Willow Ponds). The available amount is approximately $382,000. The funds from TIF 1-5 may only be used on other eligible affordable housing projects within the City. If the funds are not used, they will be redistributed to the County and the city could expect to receive only its share of the total (approximately 1/3). By using these funds for the proposed project, the amount of TIF from the The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly Virchow Krause, LLP new housing district is further reduced to $3.218M and the term of assistance is projected to be a maximum of 8.5 years. Tax Increment Financing Plan Included with the packet is the draft Tax Increment Financing Plan for the proposed Tax Increment Financing (Housing) District No. 1-13. Adoption of the TIF Plan for the TIF District will provide the City with the authority to use tax increment revenues for specific eligible projects related to the housing project. The main components of the TIF Plan include the following: • Public purpose o Implementation of approximately 200 senior housing units o Mix of independent and assisted living with memory care and detached town homes o All rental units • Qualification as housing TIF District o At least 20% of the units will be occupied by individuals/persons at 50% of area median income o Required for term of assistance • Term of district o Estimated maximum 8.5 years o May be less with future value growth • Boundaries of proposed district 0 1 parcel with parcel id 31-31-22-43-0018 o Will be split and portion in district (removal of future commercial site) • Budget of projected revenues and expenditures o Total estimated increment of $3,701,133 o Finance TIF note of $3,218,000 (subject to approval of pooling) o City withholding (admin or other) of $185,058 o May be surplus that would be returned to County o Based on 9 years (only collect full years) • Estimated Impact to other taxing entities o County share of revenues: $1,089,103 o School share of revenues: $1,136,840 o City share of revenues: $1,321,21 • Estimated total decrease in combined tax rate upon district decertification 0 (1.110%) The projected tax increment revenues that may be generated from the TIF District are shown in the chart below. Scenario 1 Total Number of Years 8.5 Total Estimated Taxable Value $28,991,000 Estimated Gross Annual Increment $411,237 Estimated Annual City Retained 5% $20,562 Estimated Net Annual Increment 95% $390,675 Total Gross Tax Increment $3,701,133 City Retaina a 5% $185,058 Net Amount Available 95% $3,516,075 Maximum Amount to Developer $3,218,000 Estimated Surplus $298,075 The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly Virchow Krause, LLP The boundaries of the TIF District only include the residential properties (senior building and detached townhomes) following a split of the existing property. The future restaurant and commercial pad sites are not within the boundaries of the TIF District. Therefore, the estimated new taxable values and projected tax increment revenues included in this analysis do not account for any taxes or increment from the future restaurant and commercial properties. Contract for Private Development As stated, adoption of the TIF Plan for the TIF District provides the City with the authority to use tax increment revenues for implementation of the proposed project but does not obligate the City to use tax increment. The Contract for Private Development provides the conditions both the City and developer must adhere to in order for the developer to receive tax increment financing as reimbursement for certain projects. A brief summary of the terms of the Contract are stated below: 1. Purchase of Land • Developer to purchase 17 acres of property required for the Minimum Improvements (which includes future restaurant location. • Purchase of two existing businesses Liquor store and Insurance, 49 Club property • Developer shall also purchase house on County Road J west of the proposed development site. 2. Minimum Improvements • Developer to build senior housing building with approximately 93 units of independent living, 50 units of assisted living, and 56 units of skilled nursing units. • Developer to build 20 detached town homes adjacent to the senior housing building. • Developer to build club house (TIF assistance will not be provided for club house). • The skilled nursing units must consist of no more than 20% of the senior housing building. • The assisted living units must have kitchen facilities and bathrooms. • The assisted living units must not have 24-hour nursing care. • Entry monument sign at SE quadrant of site with Provision for City of Lino Lakes entrance sign. 3. Public Improvements • Developer to dedicate all required County Road right-of-way to public at no cost (to be dedicated on plat). • Developer to construct County Road turn lane improvements, as shown on approved PUD development stage plan, subject to review and modification by City/County. • Developer to arrange for relocation of Xcel power lines - relocated lines will be relocated underground. • Developer to provide public utility easement for sanitary sewer, lift station, water main. • Developer to provide County and City right of way over Parcel 5 as necessary for realignment of public road. • Developer must construct public road (as shown on preliminary plat) to County Road J and put in all utilities and complete grading. 4. Declaration of Restrictive Covenants • 20% of the town homes and 20% of the independent living and assisted living must be affordable to individuals or families earning 50% or less of area median income OR 40% of the town homes and 40% of the independent living and assisted living must be affordable to individuals or families earning 60% or less of area median income. • Declaration of restrictive covenants effective until the pay go note is paid in full. 5. Reduction of TIF Note • The principal amount of the TIF Note will be reduced by the amount of any additional trunk credits or fee reductions it receives from the City (not including credits already accounted for). • Within sixty (60) days of the completion of the construction of the Senior Building, the Developer shall provide the Authority with final construction costs of the Senior Building (including related Infrastructure Improvements). If the final construction costs are less than estimated by the Developer at the time it The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly Virchow Krause, LLP sought assistance from the Authority, the principal amount of the TIF Note shall be reduced by 5% of the difference between the initial estimated construction costs and the final construction costs. 6. Sale of Restaurant and Commercial Properties In the first eight years following the date of this Agreement, if the Developer sells the restaurant and commercial properties for more than five percent (5%) of the Developer's cost for such parcel (including purchase price and all fees related to the purchase), the Developer shall pay to the Authority 45% of the profit obtained by Developer for such parcel. The cost of each parcel sold by the Developer shall be determined by dividing the gross land price paid by the Developer by the net developable acreage of each parcel to determine a per square foot cost and multiplying the square footage cost by the number of square feet sold. Thank you for the opportunity to be of assistance to the City of Lino Lakes. Please contact me at 651.223.3036 or 651.368.2533 or mikaela.huot(d_)bakertilly.com with any questions or comments. The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2018 Baker Tilly Virchow Krause, LLP City of Lino Lakes, Minnesota Lino Lakes Economic Development Authority Tax Increment Financing Plan for Tax Increment Financing (Housing) District No. 1-13 (Lyngblomsten Senior Housing Project) Within Development District No. 1 Dated: June 24, 2019 Public Hearing Scheduled: July 8, 2019 Approval by City Council: July 8, 2019 Lino Lakes Economic Development Authority, Minnesota TABLE OF CONTENTS Section Page(s) A. Definitions B. Statutory Authorization................................................................................................... 1 C. Statement of Need and Public Purpose......................................................................... 1 D. Statement of Objectives................................................................................................. 1 E. Designation of Tax Increment Financing District as a Housing District .......................... 2 F. Duration of the TIF District............................................................................................. 3 G. Property to be Included in the TIF District...................................................................... 3 H. Property to be Acquired in the TIF District..................................................................... 3 I. Specific Development Expected to Occur Within the TIF District ................................... 3 J. Findings and Need for Tax Increment Financing........................................................... 4 K. Estimated Public Costs.................................................................................................. 4 L. Estimated Sources of Revenue..................................................................................... 5 M. Estimated Amount of Bonded Indebtedness.................................................................. 5 N. Original Net Tax Capacity.............................................................................................. 5 0. Original Tax Capacity Rate............................................................................................ 6 P. Projected Retained Captured Net Tax Capacity and Projected Tax Increment ............. 6 Q. Use of Tax Increment..................................................................................................... 7 R. Excess Tax Increment................................................................................................... 8 S. Tax Increment Pooling and the Five -Year Rule............................................................. 8 T. Limitation on Administrative Expenses.......................................................................... 8 U. Limitation on Property Not Subject to Improvements - Four Year Rule ......................... 8 V. Estimated Impact on Other Taxing Jurisdictions............................................................ 9 W. Prior Planned Improvements......................................................................................... 9 X. Development Agreements............................................................................................. 10 Y. Assessment Agreements............................................................................................... 10 Z. Modifications of the Tax Increment Financing Plan ....................................................... 10 AA. Administration of the Tax Increment Financing Plan ...................................................... 10 AB. Filing TIF Plan, Financial Reporting and Disclosure Requirements ............................... 11 Map of the Tax Increment Financing District and Development District .............................................. EXHIBIT I TIF District Assumptions Report......................................................................................................... EXHIBIT II Projected Tax Increment Report......................................................................................................... EXHIBIT III Estimated Impact on Other Taxing Jurisdictions Report..................................................................... EXHIBIT IV Lino Lakes Economic Development Authority, Minnesota Section A Definitions The terms defined in this section have the meanings given herein, unless the context in which they are used indicates a different meaning: "Authority" means the Lino Lakes Economic Development Authority. "City„ means the City of Lino Lakes, Minnesota; also referred to as a "Municipality". "City Council" means the City Council of the City; also referred to as the "Governing BodV". "County„ means Anoka County, Minnesota. "Development District" means Development District No. 1 in the City, which is described in the corresponding Development Program. "Development Program" means the Development Program for the Development District. "Project Area" means the geographic area of the Development District. "School District" means Independent School District No. 12, Minnesota. "State" means the State of Minnesota. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, both inclusive. "TIF District" means Tax Increment Financing (Housing) District No. 1-13. "TIF Plan" means the tax increment financing plan for the TIF District (this document). Section B Statutory Authorization The Development District Act authorizes the City and Authority, upon certain public purpose findings by the City Council, to establish and designate development districts within the City and to develop and administer development programs therefore to meet the needs and accomplish the public purposes specified in Section C. In accordance with the purposes set forth in Section 469.124 of the Development District Act, the City Council and Authority have established the Development District comprising the area described in Section E and have adopted this Development Program. Section C Statement of Need and Public Purpose The City Council and Authority have determined that there is a need for the City to take certain actions they deem necessary in order to encourage, ensure and facilitate development and redevelopment by the private sector of underutilized, inappropriately used and unused land located within the corporate limits of the City. Such actions are necessary in order to provide additional employment opportunities for residents of the City and the surrounding area; to improve the tax base of the City, the County and the School District, thereby enabling them to better provide needed public services; and to improve the general economy of the City, the County and the State. Section D Statement of Objectives The Authority seeks to achieve the following objectives through the establishment of TIF District No. 1-13: BAKER TILLY Page 1 Lino Lakes Economic Development Authority, Minnesota 1. redevelop blighted areas as identified 2. provide housing opportunities within the community 3. provide employment opportunities within the community. 4. improve the tax base of Lino Lakes and the general economy of the City and State; 5. implement relevant portions of the Comprehensive Plan. The Authority's specific purpose in establishing TIF District No. 1-13 is to aid in the construction of a senior living care campus comprising of independent living, assisted living, memory care, skilled care and detached townhomes of which the intended age for occupants is 55+. The Authority intends to use increment generated by the new development to assist with financing a portion of the extraordinary onsite and offsite costs directly related to the senior care building including acquisition, underground and surface parking, streets, public utilities, and public improvements to gain access to the site. Section E Designation of Tax Increment Financing District as a Housing District Pursuant to the TIF Act, the City seeks to create Tax Increment Financing (Housing) District No. 1-13 and adopt a TIF Plan for the TIF District. The City will review the TIF Plan prior to City adoption. TIF District No. 1-13 is a housing district. Housing districts are a type of tax increment financing district that consist of a project intended for occupancy, in part, by persons or families of low and moderate income. Low and moderate income is defined in federal, state, and municipal legislation. A project does not qualify if more than 20% of the square footage of buildings that receive assistance from tax increments consist of commercial, retail or other nonresidential use. In addition, housing districts are subject to various income limitations and requirements for residential property. For owner occupied residential property, 95% of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 143(f) of the Internal Revenue Code. For residential rental property, the property must satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. The TIF District meets the above qualifications for these reasons: 1. The planned improvements consist of the following: a. Approximately 150 total units, for which the following will apply: o 150-unit senior housing building with at least 20% (30) of the rental units will be occupied by persons with incomes no greater than 50% of county median income 2. At least 80% of the proposed development will be used for residential purposes. 3. The City will require in the development agreement that the income limitations for the rental units in the senior building will apply for the duration of the TIF District. Tax increments derived from a housing district must be used solely to finance the cost of housing projects as defined in section 469.174, subd. II and 469.176 of the TIF Act. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the City may be included in the cost of a housing project. The City anticipates using tax increment revenues to finance a portion of the extraordinary costs associated with providing the affordable housing units. BAKER TILLY Page 2 Lino Lakes Economic Development Authority, Minnesota Section F Duration of the TIF District Housing districts may remain in existence 25 years from the date of receipt of the first tax increment. Modifications of this plan (see Section Z) shall not extend these limitations. Pursuant to Minnesota Statutes, Section 469.175, subd. 1(b), the Authority specifies 2022 as the first year in which it elects to receive tax increment from the TIF District, which is no later than four years following the year of approval of the TIF District. Thus, the Authority may collect increment from the district through December 31, 2047; however, the Authority anticipates decertifying the TIF District as early as possible with a projected maximum term of 8.5 years. All tax increments from taxes payable in the year the TIF District is decertified shall be paid to the Authority. Section G Property to be Included in the TIF District The TIF District comprises 1 parcel that contains an underutilized building that will be demolished prior to development. The total area of the TIF district also includes adjacent streets and right-of-way located within the Project Area and are described below. A map showing the location of the TIF District is shown in Exhibit I. Parcel Number Legal Description 31-31-22-43-0018 LOT 4 AUDITORS SUBDIVISION NO 107 TOG/W ELY 50 FT OF LOT 22 SD AUD SUB LYG BET WILY EXTNS OF N & S LINES OF SD LOT 4 It is anticipated the parcel listed above will be replatted prior to development and a portion of the property will be included within the boundaries of the TIF District. The area encompassed by the TIF District shall also include all street or utility right-of-ways located upon or adjacent to the property described above, as illustrated in the boundary map included in Exhibit I. Section H Property to be Acquired in the TIF District The Authority may acquire and sell any or all of the property located within the TIF District; however, the Authority does not anticipate acquiring any such property at this time. Section I Specific Development Expected to Occur Within the TIF District The proposed project includes the development of property within the City to include a senior care campus with independent living, assisted living, memory care and skilled care units in one building with an underground parking structure. The skilled care portion of the building is a non-residential use that will be less than 20% of the square footage of the entire building. In addition to the senior building will be the construction of 20 detached townhomes and community clubhouse. In order to comply with Minnesota Statutes for designation of a Housing TIF District, at least 20% of the units will be restricted for persons or families with incomes at or below 50% of area median income. The Authority has identified significant costs related to construction of the project including acquisition, site development, infrastructure and public improvements that are deemed necessary for the project to proceed. The Authority anticipates providing financial assistance for the costs associated with the provision of affordable housing, acquisition and redevelopment of the entire property site and also to finance certain public improvements directly related to the housing development project. The Authority may also use available tax increment revenues to finance a portion of the eligible related administrative expenses. Demolition and subsequent construction of the new development on the project site is projected to start in late 2019. The project is expected to be fully constructed by December 31, 2020 and be 100% assessed and on the tax rolls as of January 2, 2021 for taxes payable 2022. BAKER TILLY Page 3 Lino Lakes Economic Development Authority, Minnesota Section J Findings and Need for Tax Increment Financing In establishing the TIF District, the City makes the following findings: (1) The TIF District qualifies as a housing district. See Section G of this document for the reasons and facts supporting this finding. (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. The proposed development is expected to consist of approximately 150 senior housing units comprising of independent living, assisted living and memory care units. The City's finding that the proposed development would be unlikely to occur solely through private investment within the reasonably foreseeable future is based on an analysis of the project pro forma and other materials submitted to the City by the developer. These documents have indicated that due to the significant costs associated with assembling the project site and construction of the senior housing project will result in returns that are not sufficient to support development, thereby making this housing development infeasible without public assistance. There are significant development costs associated with acquisition, demolition, installation of new infrastructure and structured parking. Therefore, the developer has indicated in communications with the City and submitted financial data that the development as proposed would not move forward without tax increment assistance. (3) The TIF Plan conforms to the general plan for development or redevelopment of the City as a whole. The reasons and facts supporting this finding are that the City Council of the City has found the TIF plan consistent with the general plan for development of the city as a whole and will generally complement and serve to implement policies adopted in the City's comprehensive plan. (4) The TIF Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development of the Project Area by private enterprise. Through the implementation of the TIF Plan, the City will provide an impetus for a new senior care campus, of which a portion of the units will be affordable, which complements the overall housing needs of the City and helps support other private types of development by providing a range of housing opportunities for residents and workers within the City. Section K Estimated Public Costs The estimated public costs of the TIF District are listed below. Such costs are eligible for reimbursement from tax increments of the TIF District. Land/Building acquisition 888,000 Site Improvements/Preparation costs 2,330,000 Utilities 0 Other Housing Improvements 298,075 Administrative expenses 185,058 Subtotal Interest expenses 0 Total 3,701,133 BAKER TILLY Page 4 Lino Lakes Economic Development Authority, Minnesota The Authority anticipates using tax increment to the extent available to finance affordable housing costs, site improvement/preparation costs, public improvement infrastructure costs, land acquisition and related administrative expenses, and other TIF-eligible expenditures as deemed necessary and related to redevelopment of the project site. The Authority reserves the right to administratively adjust the amount of any of the items listed above or to incorporate additional eligible items, so long as the total estimated public cost ($3,701,133) is not increased. The Authority also reserves the right to fund any of the identified costs with any other legally available revenues, such as grants and/or loans, but anticipates that such costs will be primarily financed with tax increments. Section L Estimated Sources of Revenue Tax Increment revenue 3,701,133 Interest on invested funds 0 Land Sale Proceeds 0 Other 0 Total 3,701,133 The Authority anticipates providing financial assistance on a pay-as-you-go basis for acquisition and site improvement and infrastructure costs, as well as other TIF-eligible expenses related to the proposed development. As tax increments are collected from the TIF District in future years, a portion of these taxes will be used by the Authority to reimburse the developer/owner for public costs incurred (see Section K). The Authority reserves the right to finance any or all public costs of the TIF District using pay-as-you-go assistance, internal funding, general obligation or revenue debt, or any other financing mechanism authorized by law. The Authority also reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. Section M Estimated Amount of Bonded Indebtedness The maximum principal amount of bonds (as defined in the TIF Act) secured in whole or part with tax increment from the TIF District is 3 701 133. The Authority currently plans to finance the improvement costs in the form of a pay -as - you go revenue note but reserves the right to issue bonds in any form, including without limitation any interfund loan with interest not to exceed the maximum permitted under Section 469.178, subd. 7 of the TIF Act. Section N Original Net Tax Capacity The County Auditor shall certify the original net tax capacity of the TIF District. This value will be equal to the total net tax capacity of all property in the TIF District as certified by the State Commissioner of Revenue. For districts certified between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts certified between July 1 and December 31, inclusive, this value is based on the current assessment year. The Estimated Market Value of all property within the TIF District as of January 2, 2018, for taxes payable in 2019, is $908,400. Upon establishment of the district and subsequent reclassification of property, the estimated original net tax capacity of the TIF District is expected to be $11,355. This assumes the property is classified as residential rental with a classification rate of 1.25%. Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as a result of: (1) changes in the tax-exempt status of property; BAKER TILLY Page 5 Lino Lakes Economic Development Authority, Minnesota (2) reductions or enlargements of the geographic area of the TIF District; (3) changes due to stipulation agreements or abatements; or (4) changes in property classification rates. Section 0 Original Tax Capacity Rate The County Auditor shall also certify the original tax capacity rate of the TIF District. This rate shall be the sum of all local tax rates that apply to property in the TIF District. This rate shall be for the same taxes payable year as the original net tax capacity. In future years, the amount of tax increment generated by the TIF District will be calculated using the lesser of (a) the sum of the current local tax rates at that time or (b) the original tax capacity rate of the TIF District. The sum of all local tax rates that apply to property in the TIF District, for taxes levied in 2019 and payable in 2020, is not available at the time off drafting of this document. The County Auditor shall certify the amount for taxes payable 2020 as the original tax capacity rate of the TIF District once available assuming the request for certification is made between July 1, 2019 and June 30, 2020. For purposes of estimating the tax increment generated by the TIF District, the sum of the local tax rates for taxes levied in 2018 and payable in 2019, is 117.574% as shown below. 2018/2019 Taxing Jurisdiction Local Tax Rate City of Lino Lakes 41.817% Anoka County 34.473% ISD #12 35.984% Other 5.300% Total 117.574% Section P Projected Retained Captured Net Tax Capacity and Projected Tax Increment The Authority anticipates that the project will begin construction in fall 2019 and be 100% completed by December 31, 2020, creating a total tax capacity for TIF District No. 1-13 of $362,388 as of January 2, 2021. The captured tax capacity as of that date is estimated to be $351,033 and the first year of tax increment is estimated to be $390,675 payable in 2019. A complete schedule of estimated tax increment from the TIF District is shown in Exhibit III. The estimates shown in this TIF plan assume that residential rental class rates remain at 1.25% of the estimated taxable value and include 0% annual increases in market values. Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax capacity of the TIF District. The County Auditor shall certify to the City the amount of captured net tax capacity each year. The City may choose to retain any or all of this amount. It is the City's intention to retain 100% of the captured net tax capacity of the TIF District. Such amount shall be known as the retained captured net tax capacity of the TIF District. BAKER TILLY Page 6 Lino Lakes Economic Development Authority, Minnesota Exhibit II gives a listing of the various information and assumptions used in preparing a number of the exhibits contained in this TIF Plan, including Exhibit III which shows the projected tax increment generated over the anticipated life of the TIF District. Section Q Use of Tax Increment Each year the County Treasurer shall deduct 0.36% of the annual tax increment generated by the TIF District and pay such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of financial reporting and auditing of tax increment financing information throughout the state. Exhibit III shows the projected deduction for this purpose over the anticipated life of the TIF District. The City has determined that it will use 100% of the remaining tax increment generated by the TIF District for any of the following purposes: (1) Pay for the estimated public costs of the TIF District (see Section K) and County administrative costs associated with the TIF District (see Section T); (2) pay principal and interest on one or more pay-as-you-go notes, tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to finance the estimated public costs of the TIF District; (4) pay all or a portion of the county road costs as may be required by the County Board under M.S. Section 469.175, Subdivision 1a; or (5) return excess tax increments to the County Auditor for redistribution to the City, County and School District. Tax increments from property located in one county must be expended for the direct and primary benefit of a project located within that county, unless the county board involved waives this requirement. Tax increments shall not be used to circumvent levy limitations applicable to the City. Tax increment derived from the TIF District must be used solely to finance the cost of housing projects (including administrative expenses and public improvement costs) as defined in Section 469.174, Subdivision 11 of the Tax Increment Act and subject to the requirements set forth in Section 469.1761 of the Tax Increment Act. Tax increment shall not be used to finance the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the State or federal government. Further, tax increments may not be used to finance: a commons area used as a public park; facilities used for social or recreational purposes (whether public or private); or publicly -owned facilities used for conference purposes; provided that tax increment may be used for a privately owned conference facility, and for parking structures whether public or privately owned and whether or not they are ancillary to one of the otherwise prohibited uses described above. If there exists any type of agreement or arrangement providing for the developer, or other beneficiary of assistance, to repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be subject to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the developer or beneficiary. BAKER TILLY Page 7 Lino Lakes Economic Development Authority, Minnesota Section R Excess Tax Increment Beginning with the sixth year after certification of the TIF District, any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated public costs authorized by the TIF Plan, the City shall use the excess tax increments to: (1) prepay any outstanding tax increment bonds; (2) discharge the pledge of tax increments thereof; (3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or (4) return excess tax increments to the County Auditor for redistribution to the City, County and School District. The County Auditor must report to the Commissioner of Education the amount of any excess tax increment redistributed to the School District within 30 days of such redistribution. Section S Tax Increment Pooling and the Five -Year Rule As permitted under Minnesota Statutes, Section 469.1763, subdivision 2(b) and subdivision 3(a)(5), any expenditures of increment from the TIF District to pay the cost of a "housing project" as defined in Minnesota Statutes, Section 469.174, subd. 11 will be treated as an expenditure within the district for the purposes of the "pooling rules" and the "five-year rule". The City does not currently anticipate that tax increments will be spent outside the TIF District (except allowable administrative expenses), but such expenditures are expressly authorized in this TIF Plan. The Authority does not expect that allowable pooling expenditures will be made outside of the TIF District, but such expenditures are expressly authorized in this TIF Plan. Section T Limitation on Administrative Expenses Administrative expenses are defined as all costs of the Authority other than: (1) amounts paid for the purchase of land; (2) amounts paid for materials and services, including architectural and engineering services directly connected with the proposed development within the TIF District; (3) relocation benefits paid to, or services provided for, persons or businesses residing or located within the TIF District; or (4) amounts used to pay interest on, fund a reserve for, or sell at a discount, tax increment bonds. Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, planning or economic development consultants, and actual costs incurred by the County in administering the TIF District. Tax increments may be used to pay administrative expenses of the TIF District up to the lesser of (a) 10% of the total tax increment expenditures authorized by the TIF Plan or (b) 10% of the total tax increments received by the District. Section U Limitation on Property Not Subject to Improvements - Four Year Rule If after four years from certification of the TIF District no demolition, rehabilitation, renovation, or qualified improvement of an adjacent street has commenced on a parcel located within the TIF District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified BAKER TILLY Page 8 Lino Lakes Economic Development Authority, Minnesota improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The City must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the City or owner of the parcel subsequently commences any of the above activities, the City shall certify to the County Auditor that such activity has commenced, and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. Section V Estimated Impact on Other Taxing Jurisdictions Exhibit IV shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The City believes that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. The fiscal and economic implications of the proposed tax increment financing district, as pursuant to Minnesota Statutes, Section 469.175, Subdivision 2, are listed below. 1. The total amount of tax increment that will be generated over the life of the district is estimated to be $3,714,507. To the extent the facility in the proposed TIF District generates any public cost impacts on city -provided services such as police and fire protection, public infrastructure, and borrowing costs attributable to the district, such costs will be levied upon the taxable net tax capacity of the City, excluding that portion captured by the District. The City does not plan to issue bonds in conjunction with this project. 3. The amount of tax increments over the life of the district that would be attributable to school district levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions remained the same, is estimated to be $1,136,840. The amount of tax increments over the life of the district that would be attributable to county levies, assuming the county's share of the total local tax rate for all taxing jurisdictions remained the same is estimated to be $1,089,103. 5. No additional information has been requested by the county or school district that would enable it to determine additional costs that will accrue to it due to the development proposed for the district. Section W Prior Planned Improvements The Authority shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the TIF District by the net tax capacity of each improvement for which a building permit was issued. There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. BAKER TILLY Page 9 Lino Lakes Economic Development Authority, Minnesota Section X Development Agreements If within a project containing a housing district, more than 10% of the acreage of the property to be acquired by the Authority is purchased with tax increment bonds proceeds (to which tax increment from the property is pledged), then prior to such acquisition, the Authority must enter into an agreement for the development of the property. Such agreement must provide recourse for the Authority should the development not be completed. The Authority anticipates entering into an agreement for development but does not anticipate acquiring any property located within the TIF District. Section Y Assessment Agreements The City may, upon entering into a development agreement, also enter into an assessment agreement with any person, which establishes a minimum market value of the land and improvements for each year during the life of the TIF District. The assessment agreement shall be presented to the County or City Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land, and so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate, shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the office of the County Recorder of each county where the property is located. Any modification or premature termination of this agreement must first be approved by the City, County and School District. The Authority anticipates entering into an assessment agreement. Section Z Modifications of the Tax Increment Financing Plan Any reduction or enlargement in the geographic area of the Project Area or the TIF District; increase in the amount of bonded indebtedness to be incurred; increase in the amount of capitalized interest; increase in that portion of the captured net tax capacity to be retained by the City; increase in the total estimated capital and administrative costs; or designation of additional property to be acquired by the City shall be approved only after satisfying all the necessary requirements for approval of the original TIF Plan. This paragraph does not apply if: (1) the only modification is elimination of parcels from the TIF District; and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District's original net tax capacity, or the City agrees that the TIF District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. The City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. Section AA Administration of the Tax Increment Financing Plan Upon adoption of the TIF Plan, the City shall submit a copy of such plan to the Minnesota Department of Revenue and the Office of the State Auditor. The City shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the City shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. The City shall also send the County Assessor any assessment agreement BAKER TILLY Page 10 Lino Lakes Economic Development Authority, Minnesota establishing the minimum market value of land and improvements in the TIF District and shall request that the County Assessor review and certify this assessment agreement as reasonable. The County shall distribute to the City the amount of tax increment as it becomes available. The amount of tax increment in any year represents the applicable property taxes generated by the retained captured net tax capacity of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other development, inflation of property values, or changes in property classification rates or formulas. In administering and implementing the TIF Plan, the following actions should occur on an annual basis: prior to July 1, the City shall notify the County Assessor of any new development that has occurred in the TIF District during the past year to ensure that the new value will be recorded in a timely manner. (2) if the County Auditor receives the request for certification of a new TIF District, or for modification of an existing TIF District, before July 1, the request shall be recognized in determining local tax rates for the current and subsequent levy years. Requests received on or after July 1 shall be used to determine local tax rates in subsequent years. (3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF District. The amount certified shall reflect any changes that occur as a result of the following: (a) the value of property that changes from tax-exempt to taxable shall be added to the original net tax capacity of the TIF District. The reverse shall also apply; (b) the original net tax capacity may be modified by any approved enlargement or reduction of the TIF District; (c) if the TIF District is classified as an economic development district, then the original net tax capacity shall be increased by the amount of the annual adjustment factor; and (d) if laws governing the classification of real property cause changes to the percentage of estimated market value to be applied for property tax purposes, then the resulting increase or decrease in net tax capacity shall be applied proportionately to the original net tax capacity and the retained captured net tax capacity of the TIF District. The County Auditor shall notify the City of all changes made to the original net tax capacity of the TIF District. Section AB Filing TIF Plan, Financial Reporting and Disclosure Requirements The City will comply with all reporting requirements for the TIF District under Minnesota Statutes, Section 469.175, subdivisions 5 and 6. BAKER TILLY Page 11 Exhibit / MAP OF PROPOSED TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-13 EFJiIOR avERAM C11.20 BAKER TILLY Page 12 Exhibit 11 Assumptions Report City of Lino Lakes, Minnesota Tax Increment Financing (Housing) District No. 1-13 Lyngblomsten Site: Senior Care Campus Draft TIF Plan Exhibits: Updated Revenue Projections with $28,991,000 new value Type of Tax Increment Financing District Housing Maximum Duration of TIF District 25 years from 1st increment Projected Certification Request Date Decertification Date Base Estimated Market Value Original Net Tax Capacity 12/30/19 12/31/30 (9 Years of Increment) $9U8,4UU $11,355 Assessment/Collection Year 2019/2020 2020/2021 2021 /2022 2022/2023 Base Estimated Market Value $908,400 $908,400 $908,400 $908,400 Estimated Increase in Value - New Construction 0 0 28,082,600 28,082,600 Total Estimated Market Value 908,400 908,400 28,991,000 28,991,000 Total Net Tax Capacity $11,355 $11,355 $362,388 $362,388 City of Lino Lakes 41.817% Anoka County 34.473% Centennial SD #12 35.984% Other 5.300% Local Tax Capacity Rate 117.5740% 2018/2019 Fiscal Disparities Contribution From TIF District 0.0000% Administrative Retainage Percent (maximum = 10%) 5.00% Pooling Percent 0.00% Present Value Date & Rate 02/01/20 5.00% PV Amount $2,726,536 Notes Projections assume no future changes to classification rates and current tax rates remain constant. Projections are based on final pay 2019 rates. Projections assume project 100% completed in 2020 Projections assume no market value inflation. BAKER TILLY Page 13 Exhibit /// Projected Tax Increment Report City of Lino Lakes, Minnesota Tax Increment Financing (Housing) District No. 1-13 Lyngblomsten Site: Senior Care Campus Draft TIF Plan Exhibits: Updated Revenue Projections with $28,991,000 new value Annual Period Ending 1 Total Market Value (' ) 2 Total Net Tax Capacity (2) 3 Less: Original Net Tax Capacity (3) 4 Retained Captured Net Tax Capacity (5) Times: Tax Capacity Rate (4) 6 Annual Gross Tax Increment (7) Less: State Aud. Deduction 0.360% 8 Subtotal Net Tax Increment (9) Less: City Retainage 5.00% (10) Annual Net Revenue 11 P.V. Annual Net Rev. To 02/01/20 5.00% 12/31/19 908,400 11,355 11,355 0 117.574% 0 0 0 0 0 0 12/31/20 908,400 11,355 11,355 0 117.574% 0 0 0 0 0 0 12/31/21 908,400 11,355 11,355 0 117.574% 0 0 0 0 0 0 12/31/22 28,991,000 362,388 11,355 351,033 117.574% 412,723 1,486 411,237 20,562 390,675 337,480 12/31/23 28,991,000 362,388 11,355 351,033 117.574% 412,723 1,486 411,237 20,562 390,675 321,409 12/31/24 28,991,000 362,388 11,355 351,033 117.574% 412,723 1,486 411,237 20,562 390,675 306,104 12/31/25 28,991,000 362,388 11,355 351,033 117.574% 412,723 1,486 411,237 20,562 390,675 291,528 12/31/26 28,991,000 362,388 11,355 351,033 117.574% 412,723 1,486 411,237 20,562 390,675 277,645 12/31/27 28,991,000 362,388 11,355 351,033 117.574% 412,723 1,486 411,237 20,562 390,675 264,424 12/31/28 28,991,000 362,388 11,355 351,033 117.574% 412,723 1,486 411,237 20,562 390,675 251,833 12/31/29 28,991,000 362,388 11,355 351,033 117.574% 412,723 1,486 411,237 20,562 390,675 239,841 12/31/30 28,991,000 362,388 11,355 351,033 117.574% 412,723 1,486 411,237 20,562 390,675 228,420 $3,714,507 $13,374 $3,701,133 $185,058 $3,516,075 $2,518,684 * City has the election to opt delay receipt of first increment up to 4 years from approval date. Further discussions regarding first year collection Total estimated market value based on information provided by County Assessor, subject to further review very preliminary and subject to further review. Includes 0% annual market value inflator (2) Total net tax capacity based on residential rental class rate of 1.25% (3) Original net tax capacity based on portion of existing land value for 1 parcel to be included in development (4) Total local tax capacity rate for taxes payable 2019 BAKER TILLY Page 14 Exhibit IV Estimated Impact on Other Taxing Jurisdictions Report City of Lino Lakes, Minnesota Tax Increment Financing (Housing) District No. 1-13 Lyngblomsten Site: Senior Care Campus Draft TIF Plan Exhibits: Updated Revenue Projections with $28,991,000 new value Without Project or TIF District With Project and TIF District Final Projected Hypothetical 2018/2019 2018/2019 Retained New Hypothetical Hypothetical Tax Generated Taxable 2018/2019 Taxable Captured Taxable Adjusted Decrease In by Retained Taxing Net Tax Local Net Tax Net Tax Net Tax Local Local Captured Jurisdiction Capacity (1) Tax Rate Capacity (1) + Capacity = Capacity Tax Rate (*) Tax Rate (*) N.T.C. (*) City of Lino Lakes 20,757,860 41.817% 20,757,860 $351,033 21,108,893 41.122% 0.695% 144,350 Anoka County 335,542,347 34.473% 335,542,347 351,033 335,893,380 34.437% 0.036% 120,885 Centennial SD #12 33,044,600 35.984% 33,044,600 351,033 33,395,633 35.606% 0.378% 124,988 Other - 5.300% - - - 5.300% - - Totals 117.574% 116.464% 1.110% * Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each of the taxing jurisdictions above, the result would be a lower local tax rate (see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case, the total local tax rate would decrease by 1.110% (see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity of the TIF District would generate is also shown above. Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions, then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity = total net tax capacity - captured TIF - fiscal disparity contribution, if applicable. (2) The impact on these taxing jurisdictions is negligible since they represent only 4.51 % of the total tax rate. BAKER TILLY Page 15