The URL can be used to link to this page

Home My WebLink About07-27-2000ECONOMIC DEVELOPMENT COMMISSION AGENDA July 27th 2000 7:30 A.M. MOUNDS VIEW CITY HALL - CITY COUNCIL CHAMBERS 1. CALL TO ORDER 2. ROLL CALL (Present = P, Absent = A) Belting Carlson Field Goff Johnson 3. APPROVE EDC MINUTES June 22nd, 2000 Action: Motion Second Vote 4. SPECIAL BUSINESS No Special Business Walther Coughlin (EDA Liaison) Jopke (Staff) Parrish (Staff) 5. REPORT OF COMMISSIONERS, STAFF AND EDA LIAISON A. Report of Commissioners — No Materials Attached B. Chamber of Commerce Update — No Materials Attached C. Highway 10 Steering Committee Update — No Materials Attached D. 1-3 IN Corridor Coalition Update — No Materials Attached E. Mermaid Hotel and Banquet Center Site Plan— No Materials Attached 6. EDC BUSINESS A. Tax Abatement Finance Policy Revisions 7. ADJOURN 8. BUSINESS RETENTION VISIT A. Jonco Die, 5201 Program Avenue I1 Next Regularly Scheduled Meeting: August 24th, 2000 at 7.30 A.M N:\DATA\GROUPS\ECONDEV\EDC\Agendas\AgendaOO\July.doe Not Approved Minutes of the Economic Development Commission City of Mounds View Ramsey County, Minnesota Regular Meeting June 22nd, 2000 City of Mounds View, Council Chambers 2401 Highway 10, Mounds View, MN 55112 CALL TO ORDER: The meeting was called to order at 7:35 a.m. by Chairperson Tom Field. 2. ROLL CALL: Members Present: Dr. Greg Belting, Cindy Carlson, Tom Field, Torri Johnson, Rosemary Goff, Wendy Marty, and Sean Walther. Members Absent: EDA Liaison Dan Coughlin Staff Present: Economic Development Coordinator Aaron Parrish and Community Development Director Rick Jopke 3. APPROVAL OF MINUTES: Motion/Second: Goff/1Nalther moved to approve the minutes from May 251h, 2000. Motion Carried: 7 Ayes 0 Nays 4. SPECIAL BUSINESS There was no Special Business 5. REPORT OF COMMISSIONERS, STAFF AND EDA LIAISON A. Commissioner and EDA Liaison Reports Chairperson Field discussed the recent meetings of the Highway 10 Steering Committee. He indicated that priorities identified at the committee level included reducing the Highway's speed limit, renaming the road, incorporating additional landscaping, adding a pedestrian bridge, and adding trails and pathways along the corridor. Commissioner Carlson suggested the need for a pedestrian bridge be evaluated further in light of some of the other pedestrian friendly changes being made to the Highway. NB—MV Chamber of Commerce Update Commissioner Greg Belting, Chair of the Board of Directors for the NB—MV Area Chamber of Commerce provided the Commission with information on the Chamber's recent activities. Commissioner Belting indicated that a Mounds View business was awarded the "Business of the Year" award. Commissioner Carlson also indicated that Commissioner Belting was the recipient of the "Volunteer Service" award for his participation in chamber, rotary, and { city activities. Commissioner Belting also indicated that the Chamber will be hosting its annual 'Gala" event on July 27th, 2000. N:\DATA\GROUPS\ECONDEV\EDC\Minutes\Min00\06-22-OO.doc Noi Approved C. 2901 Highway 10 Coordinator Parrish updated the Commission regarding the status of 2901 Highway 10, or the former gas station property. He announced that the Economic Development Authority authorized the provision of demolition assistance and that it is anticipated that the property will be demolished sometime next week. D. Tax Increment Finance Policy Update Coordinator Parrish indicated that the Economic Development Authority passed the tax increment finance policy recommended by the Commission with a couple of slight modifications. E. Walgreens Director Rick Jopke updated the Commission on the upcoming Walgreens' development. He indicated that the proposal was going to be considered at the JUly 5'h, 2000 meeting of the Planning Commission. He reaffirmed that a Walgreens and Culvers restaurant are still planned for the property. He also reiterated the terms of the land exchange between the city and the developer. F. Mermaid Hotel and Banquet Center Coordinator Parrish apprised the Commission on the status of the Mermaid's request for tax increment finance assistance. He indicated that the Economic Development Authority has given preliminary approval to the request, and that the city's consultants are currently in the process of drafting development agreement and the necessary amendments to the tax increment finance plan. Once the appropriate agreements and amendments have been drafted, the Economic Development Authority will give final consideration to the proposal. G. Council Manager Form of Government Director Jopke gave a brief overview of the City Council's consideration of a council- manager form of government. Director Jopke stated that the primary difference the proposed form of government and the existing form of government is the role of the city council. He indicated that under a city manager form of government, the Council would take more of a policy making role in city affairs with administrative matters being left to a city manager. Commissioner Belting inquired about the form of government other communities used, particularly in the metropolitan area. Director Jopke indicated that the City has gotten this information and it could be provided at a later date. H. Charter Commission Resolution 2000-09 Coordinator Parrish indicated that Charter Commission Resolution 2000-09 has been provided to the Commission since it relates to the use of tax increment finance in Mounds View. 6. EDC BUSINESS A. Tax Abatement Finance Policy Coordinator Parrish provided an overview of tax abatement and its potential use in Mounds View. He discussed the public interest requirements prerequisite to granting an abatement, the potential uses of abatement, abatement compared to tax increment financing, and abatement's capacity to generate revenue. N:\DATA\GROUPS\ECONDEV\EDC\A4inutes\MinOO\06-22-OO.doc Not A1J 0 =01' After an overview, a preliminary tax abatement finance policy and application was submitted to the Commission for their review. Coordinator Parrish provided a summation of the policy's components. With regard to Section IV, Policies for the Use of Tax Abatement, Commissioner Carlson suggested that a 20% equity investment might be more appropriate than a 20 percent "cash" equity investment under letter b. Also with regard to Section IV, Policies for the Use of Tax Abatement, Commissioner Field suggested adding "as established by a licensed appraiser' to letter c. Coordinator Parrish suggested two additional changes. First, under Section V. Project Qualifications, he suggested public infrastructure be incorporated. This was agreeable to the Commission. Second, under Section VIII, letter "E" he suggested that "To be returned upon project completion" be omitted from the application fee component. With regard to the evaluation tool contained within Section X, Commissioner Carlson suggested that some additional criteria be incorporated to account things such as exterior improvements and other intangible criteria. It was agreed that additional items would be incorporated into the bonus points component of the evaluation tool. After additional discussion, it was agreed that Coordinator Parrish would make the aforementioned changes and present the policy for final consideration at the next Commission meeting. 8. Adjournment There being no further business before the Commission, this meeting of the Economic Development Commission adjourned at 8:50 a.m. Respectfully Submitted, Aaron Parrish Economic Development Coordinator N:\DATA\GROUPS\ECONDEV\EDC\Minutes\MinOO\06-22-OO.doc Item No. 6A Meeting Date: July 27th, 2000 Type of Business: EB EB: EDC Business IN: Informational Item Citv of Mounds View Staff Report To: Economic Development Commission From: Aaron Parrish, Economic Development Coordinator Item Title/Subject: Tax Abatement Finance Policy Revisions Date of Report: July 17, 2000 Background: At the June meeting of the Economic Development Commission, the Commission discussed the use of tax abatement in Mounds View, and suggested several changes to a proposed tax abatement policy. Changes based on the preliminary review of the policy are highlighted in bold italics and are contained on pages 4, 5, 8, and 17. The two primary changes include adding a section highlighting the use of abatementwith regard to public infrastructure (page 8) and the incorporation of two additional bonus point categories in the evaluation tool (page 17). Necessary Actions: Evaluate the revisions contained within the proposed Tax Abatement Finance Policy and subsequently recommend a policy to the Economic Development Authority. Aaron Parrish, Economic Development Coordinator (763) 717-4029 N:\DATA\GROUPS\ECONDEV\EDC\Staff Reports\StafibO\07-6A.doc Tax Abatement Finance Policy & Application City of Mounds View, Minnesota Adopted: ,2000 Table of Contents I. Policy Purpose 3 II. Difference Between Tax Abatement & TIF 3 III. Objectives of Tax Abatement Financing 3 IV. Policies for the Use of Tax Abatement 4 V. Project Qualifications 5 VI. Subsidy Agreement & Reporting Requirements 6 VII. Application Process for Tax Abatement Financing 7 VIII. Attachment A: Application 9 IX. Attachment B: Deposit Agreement 13 X. Attachment C: Application Review Worksheet 16 XI. Attachment D: Sample But For Analysis 18 2 I. POLICY PURPOSE The purpose of this policy is to establish the Mounds View Economic Development Authority's, hereafter referred to as the EDA, position relating to the use of tax abatement financing for private development above and beyond the requirements and limitations set forth by State Law. This policy shall be used as a guide in the processing and review of applications requesting tax abatement. The fundamental purpose of tax abatement in Mounds View is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided. The Mounds View EDA is granted the power to utilize tax abatement financing by the Minnesota Tax Abatement Act, as amended. It is the intent of the EDA to provide the minimum tax abatement, as well as other incentives, at the shortest term required for the project to proceed. The EDA reserves the right to approve or reject projects on a case by case basis, taking into consideration established policies, project criteria, and demand on city services in relation to the potential benefits from the project. Meeting policy criteria does not guarantee the award of tax abatement to the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. II. DIFFERENCE BETWEEN TAX ABATEMENT & TIF The primary difference between Tax Abatement Financing and Tax Increment Financing (TIF) is the way in which the dollars are awarded to the project. When TIF is awarded to a project by the EDA, the other political subdivisions (the school district and the county) are required to contribute their portion of the increased taxes to the project. Conversely, when tax abatement financing is requested, each political subdivision has the option of granting its portion of the increased taxes to the project. Depending on the position of the respective taxing jurisdictions, the dollars generated by tax abatement have the potential to be less than the dollars generated with TIF. III. OBJECTIVES OF TAX ABATEMENT FINANCING As a matter of adopted policy, the EDA will consider using tax abatement financing to assist private development projects to achieve one or more of the following objectives: To enhance and diversify the City of Mounds View's economic base. ( 3 • To encourage the revitalization and redevelopment of the Highway 10 Corridor. • To encourage additional unsubsidized private development in the area, either directly or indirectly through "spin off' development. • To facilitate the development process and to achieve development on sites which would not be developed without assistance. • To remove blight and/or encourage redevelopment of commercial and industrial areas in the city that result in high quality redevelopment and private reinvestment. • To encourage the removal of blight or the rehabilitation of a high profile or priority site. • To offset increased costs of redevelopment (i.e. contaminated site clean up, demolition expenses etc...) over and above the costs normally incurred in development. To increase the tax base. • To create housing opportunities. • To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits. • To finance the costs associated with public infrastructure and public facilities • To contribute to the implementation of other public policies, as adopted by the EDA from time to time, such as the promotion of quality architectural design, enhanced recreational opportunities, and decreasing capital and/or operating costs of local government. IV. POLICIES FOR THE USE OF TAX ABATEMENT a. Tax abatement assistance will be provided to the developer upon receipt of taxes by the EDA, otherwise referred to as the pay-as-you-go method. Requests for up front financing will be considered on a case by case basis. 4 b. Any developer receiving a tax abatement shall provide a minimum of twenty percent (20%) equity investment in the project. c. Tax abatement will not be used in circumstances where land and/or property price is in excess of fair market value as established by a licensed appraiser. d. A market demand shall be demonstrated for the proposed project. Tax abatement will not be utilized in cases where it would create an unfair and significant competitive financial advantage over other projects in the area. f. Tax abatement shall not be used for projects that would place extraordinary demands on city services or for projects that would generate significant environmental impacts. g. The developer must provide adequate financial guarantees to ensure completion of the project, including, but not limited to: assessment agreements, letters of credit, personal guaranties, and additional documentation as necessary. h. The developer shall adequately demonstrate, to the EDAs sole satisfaction, an ability to complete the proposed project based on past development experience, general reputation, and credit history, among other factors, including the size and scope of the proposed project. i. For the purposes of underwriting the proposal, the developer shall provide any requested market, financial, environmental, or other data requested by the EDA or its consultants. V. PROJECT QUALIFICATIONS All tax abatement projects considered by the Mounds View EDA must meet each of the following requirements: a. The project shall meet at least one of the objectives set forth in section III of this document. b. The use of tax abatement will be limited to: • Industrial development, expansion, redevelopment, or f rehabilitation; or 5 • Commercial redevelopment or rehabilitation; or • Office or research facilities; • Housing and infrastructure. • Public Infrastructure c. The developer shall demonstrate that the project is not financially feasible but -for the tax abatement financing provided. d. The project shall comply with all provisions set forth in Minnesota's Tax Abatement Law, statues 469.1812 to 469.1815, as amended. e. The project must be consistent with the City's Comprehensive Plan and Zoning Ordinances. VI. SUBSIDY AGREEMENT & REPORTING REQUIRMENTS All developers/businesses receiving a tax abatement, or other assistance in excess of $100,0000 from the Mounds View EDA shall be subject to the provisions and requirements set forth by state statute 116J.993 and summarized below. All developers/businesses receiving tax abatement assistance shall enter into a subsidy agreement with the Mounds View EDA that identifies: the reason for the subsidy, the public purpose served by the subsidy, and the goals for the subsidy, as well as other criteria set forth by statute 116J.993. The developer/business shall file a report annually for two years after the date the benefit is received or until all goals set forth in the application and business subsidy agreement have been meet, whichever is later. Reports shall be completed using the format drafted by the State of Minnesota and shall be filed with the Mounds View EDA no later than March 1 of each year for the previous calendar year. Businesses fulfilling job creation requirements must file a report to that effect with the city within 30 days of meeting the requirements. The developer/business owner shall maintain and operate its facility at the site where the tax abatement and/or other assistance is used for a period of five years after the benefit is received. In addition to attaining or exceeding the jobs and wages goals set forth in the Subsidy Agreement, the borrower shall achieve at least one of the objectives set forth in Section III of this document. Developers / Businesses failing to comply with the above provisions will be subject to fines, repayment requirements, and be deemed ineligible by the State to receive any loans or grants from public entities for a period of five years. See the City's Business Subsidy Policy for additional information. VII. APPLICATION PROCESS FOR TAX ABATEMENT FINANCING A. PRIVATE (RE) DEVELOPMENT PROJECTS 1. Applicant submits the completed application along with all application fees. 2. City staff reviews the application and completes the Application Review Worksheet. 3. Results of the Worksheet are submitted to the appropriate governing authorities for preliminary approval of the proposal. 4. If preliminary approval is granted, all necessary notices, resolutions and certificates are prepared by City staff and/or consultants. 5. If necessary, public hearing(s) on the proposed project are held. 6. The EDA grants final approval or denial of the proposal. B. OTHER POLITICAL SUBDIVISIONS It is recommended that applicants intending to seek tax abatement financing from Ramsey County and/or School District 621 make their applications to those bodies concurrent with their application to the Mounds View EDA. For more information on applying for a tax abatement financing from Ramsey County and/or School District 621, contact: Judy Karon Director, Community and Economic Development Ramsey County 651-266-8006 Dr. Jan Witthuhn Superintendent Mounds View School District #621 651-639-6001 C. PUBLIC FACILITY AND INFRASTRUCTURE PROJECTS When abatement is being utilized to finance public facility and infrastructure projects, as opposed to those oriented toward private business and development objectives, the following process will be adhered to: 1. The EDA will recommend the preliminary use of tax abatement financing for a particular facility/infrastructure project. A formal application, deposit agreement, and application worksheet will not be required. 2. If preliminary approval is granted, all necessary notices, resolutions and certificates are prepared by city staff and/or consultants. 3. If necessary, public hearing(s) on the proposed project are held. 4. The EDA grants final approval or denial of the proposal. 8 VIII. ATTACHMENT A: APPLICATION FOR TAX ABATEMENT FINANCING A. APPLICANT INFORMATION Name of Corporation/Partnership Address Primary Contact Address Phone Fax Email On a separate sheet, please provide the following: • Brief description of the corporation/partnership's business, including history, principal product or service, etc... Attach as Exhibit A. • Brief description of the proposed project. Attach as Exhibit B. • List names of officers and shareholders/partners with more than five percent (5%) interest in the corporation/partnership. Attach as Exhibit C. • A but -for analysis and narrative. Attach as Exhibit D. Attorney Name Accountant N Contractor Name Phone Engineer Name Phone Architect Name Email Email Email Email Email B. PROJECT INFORMATION 1. The project will be Vacant Land Development _New Construction Expansion Redevelopment: _New Construction _ Expansion _Commercial Redevelopment: _New Construction —Rehabilitation _Industrial _Housing _New Construction Rehabilitation 2. In addition to the Mounds View EDA, applicant is requesting abatement funds from: Ramsey County School District 621 3. The project will be: _Owner Occupied _Leased Space • If leased space, please attach a list names and addresses of future lessees and indicate the status of commitments or lease agreements. Attach as Exhibit E. 4. Project Address • Include Legal Description and PID Number. Attach as Exhibit F 5. Site Plan Attached: Yes _ No 6. Total Abatement Requested: $ over City Abatement Annual $ Total $ County Abatement: Annual $ Total $ ISD 621 Abatement: Annual $ Total $ 7. Current Real Estate Taxes on Project Site: $ Estimated Real Estate Taxes upon Completion: $ 8. Construction Start Date: Construction Completion Date: If Phased Project: Year % Completed Year % Completed years. C. PUBLIC PURPOSE It is the policy of the Mounds View EDA that the use of tax abatement financing should result in a benefit to the public. Please indicate how this project will serve a public purpose. _Industrial development resulting in additional private investment _Enhancement and/or diversification of the city's economic base. _Removal of blight. 10 _Provide housing opportunities _Expand the tax base _Rehabilitation of a high profile or priority site. _Job Creation/Retention: Number of existing jobs Number of jobs created by project Average hourly wage of jobs created Other: D. SOURCES & USES SOURCES Bank Loan Other Private Funds Equity Fed Grant/Loan State Grant/Loan Tax Abatement ID Bonds Other TOTAL NAME USES Land Acquisition Site Development Construction Machinery & Equipment Architectural & Engineering Fees Legal Fees Interest During Construction Debt Service Reserve Contingencies Other TOTAL 11 AMOUNT $ AMOUNT $ E. ADDITIONAL DOCUMENTATION AND CHECKLIST Applicants will also be required to provide the following documentation. A) Written business plan, including a description of the ownership/management, date established, products future plans B) Financial Statements for Past Three Years Profit & Loss Statement Balance Sheet C) Current Financial Statements Profit & Loss Statement to Date Balance Sheet to Date D) Two Year Projections business, and services, and E) Personal Financial Statements of all Major Shareholders if "Up Front" Financing is Requested Profit & Loss Current Tax Return F) Letter of Commitment from Applicant Pledging to Complete During the Proposed Project Duration G) Application fee of $1000 H) Additional information that will be helpful in evaluating your application Note: All Major shareholders will be required to sign personal guarantees if up front financing of the project is required. The undersigned certifies that all information provided in this application is true and correct to the best of the undersigned's knowledge. The undersigned authorizes the Mounds View Economic Development Authority to check credit references and verify financial and other information. The undersigned also agrees to provide any additional information as may be requested by the Authority after the filing of this application. Applicant 12 IX. Attachment B: Deposit Agreement Deposit Agreement for Evaluation of Tax Abatement Finance Assistance By and Between the Mounds View Economic Development Authority and (The Applicant) This agreement made as of the _ day of 2000 by and between the MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY, a body corporate and politic, organized and existing under the laws of the State of Minnesota (the "EDA") and (The Applicant). WITNESSETH: WHEREAS, the EDA has the powers provided in Minnesota Statutes, Sections 469.1812 to 469.1815, as amended (collectively, the "Act"); and WHEREAS, pursuant to and in furtherance of the objectives of the Act, the EDA has undertaken a program to promote development and redevelopment of certain land within the City of Mounds View NOW THEREFORE, in consideration of a mutual covenants made herein and for other good and valuable consideration set forth in the Agreement, the parties agree as follows: Section 1. (The Applicant) agrees to provide the EDA with a deposit of $1,000 for the EDA's consultants to investigate the feasibility of providing Tax Abatement Financing assistance to (The Applicant) for the redevelopment of the (the "Property"). If the EDA incurs additional expenses directly related to the feasibility of providing Tax Abatement Assistance to (The Applicant) beyond the $1,000, prior to the execution of the Developer's Agreement, the EDA shall notify (The Applicant) in writing and (The Applicant) will be required to deposit additional funds as a condition of the EDA entering into any such Development Agreement. Section 2. If the project is approved and (The Applicant) proceeds with the project, the EDA shall reimburse (The Applicant's) deposit to the extent permissible under applicable statute including statues 469.1812 to 469.1815, as amended. If (The Applicant) does not proceed with the redevelopment of the Property due to the decision of either the EDA or (The Applicant), the EDA shall reimburse the applicant for the unused portion of the deposit. 13 Section 3. Nothing contained in this agreement shall in any way obligate either party to proceed with the redevelopment of the Property or otherwise enter into a Development Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. MOUNDS VIEW ECONOMIC DEVELOPMENT AUTHORITY BY: Dan Coughlin ITS PRESIDENT FIN STATE OF MINNESOTA) ) SS COUNTY OF ) Michael Ulrich ITS EXECUTIVE DIRECTOR The foregoing instrument was acknowledged before me on this _ day of 2000, by Dan Coughlin and Michael Ulrich, the President and Executive Director respectively of the Mounds View Economic Development Authority named in the foregoing instrument. Notary Public 14 STATE OF MINNESOTA) ) SS COUNTY OF ) day of (The Applicant) ITS: The foregoing instrument was acknowledged before me on this , 2000, by the of (The Applicant) named in the foregoing instrument. Notary Public 15 X. ATTACHMENT C: APPLICATION REVIEW WORKSHEET TO BE COMPLETED BY CITY STAFF 1. The project meets the criteria set forth in Section V of the Tax Abatement Financing policy. a) Meets at least one of the objectives in Section III. b) Demonstrates need for TAF with the but -for analysis. c) Consistent with all city plans and ordinances. d) Conforms with the criteria defined in Section V. 2. Ratio of Private to Public Investment in Project: Points: $ Private investment 5:1 5 $ Public Investment 4:1 4 Ratio Private: Public Financing 3:1 3 2:1 2 Less than 2:1 1 3. Job Creation in the City of Mounds View: Points: Number of net new jobs as a result of the project. 25+ 5 Number of existing/retained jobs divided by 10. 20+ 4 Total 15+ 3 10+ 2 Less than 10 1 4. Ratio of TAF to new jobs created: Points:_ $ TAF request $8,000 or less 5 Number of new jobs created $10,000 or less 4 $ of TAF per new job created $12,000 or less 3 $15,000 or less 2 Over $15,000 1 5. Wage Level of jobs created: Points:_ Average hourly wage Over $21/ hour 5 of jobs created: $18-21 / hour 4 $14-17 / hour 3 $10-13 / hour 2 Under $10 / hour 1 6. Project size: Points: The project will result in the construction 30,000+ 5 of net square feet 20,000+ 4 10,000+ 3 5,000+ 2 5,000 or less 1 IN 7. Type of Project: 100% Owner Occupied Mix Owner Occupied & Investment Investment Property 8. Use: Industrial Office Warehouse/Distribution Commercial Housing 9. The project will pay annual property taxes in the first fully assessed year of $ Points: - 5 4 3 Points: — 5 5 4 3 3 Points:_. 25,000+ 5 15,000+ 4 10,000+ 3 5,000+ 2 Under $5,000 1 10. Likelihood that the project will result in Points:_ unsubsidized, spin-off development. High 5 Moderate 3 Low 1 Sub - Total Points: of a possible 45 points. 9. Bonus Points Bonus Points: The project will be 100% pay-as-you-go TAF. 3 points The project contributes to Highway 10 Redevelopment 3 points The project results in substantial interior or exterior renovation 3 points The project will enhance the aesthetics of the surrounding area through high quality architectural and/or urban design 3 points Total Points: Overall project analysis: High 45-38 points Moderate 37-29 points Low 28-20 points Not Eligible 19-0 points 17 XI. SAMPLE BUT -FOR ANALYSIS l N:\DATA\GROUPS\ECONDEV\Tax Abatement\Abatement Policy.DOC IV WITH NO WITH TAX ABATEMENT FINANCING TAX ABATEMENT FINANCING SOURCES AND USES SOURCES AND USES SOURCES SOURCES Mortgage 9,600,000 8,667,000 Equity 2,400,000 2,400,00 Tax Abatement Financing 0 933,000 12,000,000 12,000,000 TOTAL SOURCES USES USES Land 1,500,000 1,500,000 Site Work 300,000 300,000 Soil Correction 468,000 468,000 Demolition 100,000 100,000 Relocation 65,000 65,000 Subtotal Land Costs 2,433,000 2,433,000 Construction 6,750,000 6,750,000 Finish Manufacturing Subtotal Construction Costs 250,000 7,000,000 250,000 7,000,000 Soft Costs 350,000 350,000 Taxes 35,000 35,000 Finance Fees 850,000 850,000 Project Manager Developer Fee Contingency Subtotal Soft Costs 542,000 540,000 250,000 2,567,000 542,000 540,000 250,000 2,567,000 TOTAL USES 12,000,000 12,000,000 Income Statement Income Statement Rent -Space 1 Rent -Space 2 Rent -Space 3 Other Sq. Ft. Per Sq. Ft. 100,000 $8.00 25,000 $8.50 25,000 $9.00 0 $0.00 800,000 212,500 225,000 0 Sq. Ft. Per Sq. Ft. 100,000 $8.00 25,000 $8.50 25,000 $9.00 0 $0.00 800,000 212,500 225,000 0 1,237,500 1,237,500 Mortgage 20 Term 1,051,646 20 Term 949,439 9.00% Interest 9.00% Interest 9,600,000 Principal 8,667,000 Principal Net Income 185,854 288,061 7.74% 12.00% Total Return on Equity l N:\DATA\GROUPS\ECONDEV\Tax Abatement\Abatement Policy.DOC IV