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19 Development Opportunities on City-Owned Land | Lake Elmo, Minnesota <br />A key question posed to the ULI panel <br />centered around the potential for generating <br />City tax revenue through development on the <br />study area parcels. <br />While a number of stakeholders shared a <br />perception that an industrial use or mix of <br />industrial uses would generate the best taxable <br />return for the City, the panel ran models of <br />potential development scenarios to better <br />identify how development across the site could <br />be expected to generate City tax revenue. <br />Potential Property Tax <br />Generation <br />The table on page 21 models four <br />development scenarios for consideration. <br />The first green column, “ULI TAP <br />Development Scenario for Lake Elmo Land,” <br />reflects the mix of uses across the three sites <br />as detailed in the Market Feasibility section <br />of this report. The second green column, “ULI <br />TAP Hypothetical Industrial Development <br />Only,” provides insights into the tax revenue <br />potential in a scenario where only industrial <br />uses were developed across all three parcels. <br />The grey columns, “Comparison of Similarly <br />Valued Property,” contain details of a real <br />property scenario for a development of a <br />similar size and configuration. The remaining <br />teal columns, “Comparison of Illustrative <br />Single Use Development on 100 Acres <br />(Net of Wetland and Setbacks),” provide <br />additional tax revenue insights for a 100-acre <br />development that has also accounted for <br />typical property setbacks, easements, etc. for <br />illustration purposes. <br />The takeaway for the City of Lake Elmo <br />and its constituents is that the potential <br />tax revenue for the site is relatively similar <br />across all uses. Industrial development does <br />generate more gross tax revenue than the <br />other uses under consideration; however, <br />the impact of the Fiscal Disparities Program <br />reduces the City’s tax benefit to a point where <br />it no longer presents a significant financial <br />advantage to the City. (Note: this modeling <br />does not take into account the potential City <br />expenses associated with public services <br />provided to the various uses over time.) <br />The results of this modeling can be instructive <br />as the City considers how it communicates <br />its eventual chosen development path to <br />its constituents. These results can also <br />free the City and its development partners <br />to make decisions based on factors other <br />than primarily tax revenue potential. The <br />removal of tax revenue as a driving force in <br />decision-making can lead to other potential <br />development scenarios that may provide <br />other key benefits to the community, such as <br />jobs, services, new and additional housing <br />options, and more. <br />Financial Tools <br />As the City considers the potential tools in <br />its financial toolbox, the panel provided the <br />following initial information as broad and early <br />guidance. It is too soon to make decisions <br />as to which tool should be used to support <br />development on the site—those conversations <br />should be had when the City is approached by <br />a developer with a specific request. <br />In the right foreground, Parcel 1 lines Ideal Avenue. Parcel 2 sits beyond the rail line, also on the right.