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• APPENDIX F BUT/FOR QUALIFICATIONS ut- or ~ na ysis Current Market Value 0 New Market Value 65,600,000 Difference 65,600,000 Presenf Vatue of Tax Increment 15,708,780 Difference 49,891,22D Value Likel to Occur Without TIF is Less Than: 49,891,220 The proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of taz 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 Tax Increment Financing District No. S permitted by the TIF Plan. Several issues are impediments to private development of the site including lack of access, existing wetlands and inadequate roadway infrastructure. The transportation improvements that have to be constructed alone • for this development (or any other type of development constructed here) total over $20 million. But for Medtronic being viewed as a major asset to Minnesota's biotech initiatives and large employer within the State, the additional roadway funding that was approved for this project would never have been available to this site, thus not making any other type of development (housing or commercial) financially feasible. In addition, site constraints require the developer to acquire adjacent land to preserve existing wetlands and green space which adds additional costs. Based upon analysis of the developer's proforma the City has determined that a gap needs to be filled through tax increment in order to make the proposed development financially feasible. The City therefore does not believe the proposed corporate office facility is likely to occur without the assistance described in this TIF Plan. The increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be Zess than the increase in 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 TIF District permitted by the TIF Plan: While the property could be sold to another developer for some other use, these scenarios are not feasible in the market due to various constraints mentioned above along with others. First, industrial uses could not meet the market valuation due to the fact that they aze single story in nature (can't get to the same density as office), lack the amenities in design and construction and are traditionally valued at''/z the market value of commercial and office uses. Second, commercial retail uses have the same restraint in that the market does not allow for vertical commercial/retail development Although retail can on occasion have a higher per sq/ft value, the lack ofthe ability to develop vertically limits the overall value developed on the site. Third, the office market is still soft in the metropolitan area and the abiliTy to develop this entire site for office use is unlikely as it is unlikely that the office sites developed would be of similar square footage. Fourth the site could be developed for housing or mixed use, but the site would need to be built at nearly 100 percent high density • APPENDIX F-1