HomeMy WebLinkAbout08-25-2003CITY OF MOUNDS VIEW
ECONOMIC DEVELOPMENT AUTHORITY MEETING AGENDA
Monday, August 25, 2003
6:30 p.m.
1. CALL TO ORDER
2. ROLL CALL: President Linke, Vice President Stigney, Commissioner Quick,
Commissioner Marty, Commissioner Gunn
3. APPROVAL OF AGENDA
4. APPROVAL OF MINUTES:
A. EDA Minutes, August 11, 2003.
5. CONSENT AGENDA
6. EDA BUSINESS
A. Consideration of Revisions to the Mounds View Economic Development Authority’s Tax
Abatement Finance Policy & Application.
B. Set a Public Hearing for 6:35 PM, Monday, September 22, 2003 to receive public input
and pass upon the Revised Tax Abatement Finance Policy & Application.
7. REPORTS
8. NEXT EDA MEETING: Monday, September 8, 2003
9. ADJOURNMENT
PROCEEDINGS OF THE MOUNDS VIEW EDA 1
CITY OF MOUNDS VIEW 2
RAMSEY COUNTY, MINNESOTA 3
4
Regular Meeting 5
August 11, 2003 6
Mounds View City Hall 7
2401 Highway 10, Mounds View, MN 55112 8
6:30 P.M. 9
10
11
1. CALL MEETING TO ORDER 12
13
2. ROLL CALL: Stigney, Quick, Marty (arrived at 6:37 p.m.), Gunn, and Linke 14
15
NOT PRESENT: None. 16
17
3. APPROVAL OF AGENDA 18
19
MOTION/SECOND: Gunn/Stigney. To Approve the August 11, 2003 Agenda as Presented. 20
21
Ayes – 4 Nays – 0 Motion carried. 22
23
4. APPROVAL OF EDA MINUTES 24
25
A. July 28, 2003 Minutes 26
27
MOTION/SECOND: Stigney/Quick. To Approve the Minutes of July 28, 2003 as Presented. 28
29
Ayes – 4 Nays – 0 Motion carried. 30
31
5. CONSENT AGENDA 32
33
None. 34
35
6. EDA BUSINESS 36
37
A. Annual Disclosure of Tax Increment Districts for 2002 38
39
Finance Director Hansen reviewed the disclosure information with Council that will be published 40
in the newspaper. He then indicated that Staff was able to prepare the report this year rather than 41
contracting out the work. 42
43
Vice President Stigney indicated that the Districts appear to have more going out than coming in. 44
45
Mounds View EDA August 11, 2003
Regular Meeting Page 2
Finance Director Hansen indicated that the primary reason for that is the debt service payments. 46
He then explained that one of the districts had its final debt service payment in February and 47
going forward there should be a surplus. 48
49
Commissioner Marty arrived at 6:37 p.m. 50
51
City Administrator Ulrich indicated that Finance Director Hansen had prepared the report for the 52
first time using new software which means going forward providing the information should be 53
less time consuming. He then commended him for his work on the new software and for being 54
able to provide a service to the City that had previously been contracted out. 55
56
B. Resolution 03-EDA-176, a Resolution Authorizing Payment of Pay-As-You-57
Go Development Payments to Red Cent Management, L.L.C.; Heartland-58
Mounds View Common Bond; Bridges Leasing Company; and Kenmark 59
Partnership, L.L.P. 60
61
Economic Development Coordinator Backman provided a brief overview of the pay-as-you-go 62
payments for the Authority. 63
64
MOTION/SECOND: Marty/Quick. To Waive the Reading and Approve Resolution 03-EDA-65
176, a Resolution Authorizing Payment of Pay-As-You-Go Development Payments to Red Cent 66
Management, L.L.C.; Heartland-Mounds View Common Bond; Bridges Leasing Company; and 67
Kenmark Partnership, L.L.P. 68
69
Ayes – 5 Nays – 0 Motion carried. 70
71
7. REPORTS 72
73
None. 74
75
8. NEXT EDA MEETING: August 25, 2003 76
77
9. ADJOURNMENT 78
79
President Linke adjourned the meeting at 6:39 p.m. 80
81
Respectfully submitted, 82
83
Recorded and transcribed by: 84
85
Joan Lenzmeier 86
TimeSaver Off Site Secretarial, Inc. 87
Tax Abatement Rebate Finance Policy &
Application
City of Mounds View, Minnesota
Adopted: October 10, 2000
Revised: July 18, 2003
DRAFT
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
2
Table of Contents
I. Policy Purpose 3
II. Difference Between Tax Abatement Rebate Financing & TIF 3
III. Objectives of Tax Abatement Rebate Financing (TRF)3
IV. Policies for the Use of TRF Tax Abatement 4
V. Project Qualifications 5
VI. Subsidy Agreement & Reporting Requirements 6
VII. Application Process for Tax Abatement Financing 7
VIII. Attachment A: Tax Rebate Financing Application 9
IX. Exhibits
A. Attachment B. Deposit Agreement 13
B. Attachment C. Application Review Worksheet 16
C. Attachment D. Sample But-For Analysis 18
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
3
I. POLICY PURPOSE The Mounds View Economic Development Authority, hereafter referred to as the EDA, promotes the development and enhancement of the City of Mounds View’s tax base. The purpose of this policy is to establish the EDA’s Mounds View Economic Development Authority’s, hereafter referred to as the EDA, position relating to the use of tax rebate financing, otherwise referred to as 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 rebate assistance. The fundamental purpose of tax abatement rebate financing 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 rebate 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 a tax abatement rebate 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 REBATE & TIF
The primary difference between Tax Abatement Rebate Financing (TRF) 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 rebate financing is requested, each political subdivision has the option of granting its portion of the current and/or increased taxes to the project. Depending on the position of the respective taxing jurisdictions, the dollars generated by TRF tax abatement have the potential to be are generally less than the dollars generated with TIF.
III. OBJECTIVES OF TAX ABATEMENT REBATE FINANCING As a matter of adopted policy, the EDA will consider using tax abatement rebate financing to assist private development projects to achieve one or more of the following objectives:
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
4
• A. To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits.
• B. To enhance and diversify the City of Mounds View’s economic base and to increase the tax base.
• C. To remove blight and/or encourage redevelopment of commercial, and industrial To encourage the removal of blight or the rehabilitation of a high profile, or high priority sites areas in the city that result in high quality redevelopment and private reinvestment.
• D. To facilitate the development process and to achieve development on sites which would not be developed without TRF assistance.
• E. To encourage the revitalization and redevelopment of the County Highway 10 Corridor.
• F. To encourage additional unsubsidized private development in the area, either directly or indirectly through “spin off” development.
• G. To offset increased costs of redevelopment (i.e. contaminated site clean- up, demolition expenses etc. . .) over and above the costs normally incurred in development.
• H. To create housing opportunities.
• I. To finance the costs associated with public infrastructure and public facilities.
• J. 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 TRF A. Tax abatement rebate 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. B. It is the intent of the EDA to provide the minimum tax rebate financing, as well as other incentives, at the shortest term required for the project to proceed.
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
5
C. Any developer receiving a tax abatement rebate shall provide a minimum of twenty percent (20%) equity investment in the project. Projects utilizing the SBA 504 program will be required to provide a minimum of ten percent (10%) cash equity investment. D. Tax abatement rebate financing will not be used in circumstances where land and/or property price is significantly in excess of fair market value as established by a licensed appraiser. D. All TRF proposals shall optimize the private development potential of a development site. E. A market demand shall be demonstrated for the proposed project. F. Tax abatement rebate assistance will not be utilized in cases where it would create an unfair and significant competitive financial advantage over other projects in the area. G. Tax abatement rebate assistance shall not be used for projects that would place extraordinary demands on city services or for projects that would generate significant environmental impacts. H. 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. I. The developer shall adequately demonstrate, to the EDA’s 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. J. 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 rebate 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.
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
6
B. The use of tax abatement rebate financing will be limited to:
• Industrial development, expansion, redevelopment, or rehabilitation; or
• Commercial redevelopment or rehabilitation; or
• Office, or research and development facilities; or
• Housing and infrastructure; or.
• Public infrastructure C. The developer shall demonstrate that the project is not financially feasible but-for the tax abatement rebate 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, Land Use Plan, and Zoning Ordinances.
VI. SUBSIDY AGREEMENT & REPORTING REQUIREMENTS All developers/businesses receiving a tax abatement rebate, or other assistance equal to or in excess of $100,0000 25,000 from the Mounds View EDA shall be subject to the provisions and requirements set forth by the City’s Business Subsidy Criteria as adopted, and Minnesota state Statute 116J.993 to 116J.995 as summarized below. All developers/businesses receiving tax abatement rebate 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 Minnesota’s statute 116J.994. 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 rebate assistance is used for a period of five years after the benefit is received, or the length of the TRF assistance, whichever is shorter.
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.
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
7
Developers / Businesses failing to comply with the above provisions will be subject to fines, repayment requirements, termination of the assistance, 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 REBATE
FINANCING
A. PRIVATE (RE) DEVELOPMENT/REDEVELOPMENT PROJECTS
1. Applicant submits the completed application along with a $1,000 all application fees. The application fee will be used toward the cost of services provided in the evaluation of the application, and legal costs incurred by the City for preparation of legal documents. 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 rebate 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 rebate 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
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
8
C. PUBLIC FACILITY AND INFRASTRUCTURE PROJECTS
When tax abatement rebate assistance 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 rebate 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.
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
9
VIII. APPLICATION FOR TAX ABATEMENT REBATE 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 (10.05%) interest in the corporation/partnership. Attach as
Exhibit C.
• A but-for analysis and narrative. Attach as Exhibit D. Attorney Name Address Phone Fax Email Accountant Name Address Phone Fax Email Contractor Name Address Phone Fax Email Engineer Name Address Phone Fax Email Architect Name Address Phone Fax Email
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
10
B. PROJECT INFORMATION 1. The project will be: ____Vacant Land Mixed Use Development ___New Construction ____ Rehab./Expansion ____Commercial Redevelopment: ____New Construction ____ Rehabilitation/Expansion ____Industrial Redevelopment: ____New Construction ____ Rehabilitation/Expansion
____Housing/Other_____________: ____New Construction ____ Rehabilitation/Expansion 2. In addition to the Mounds View EDA, applicant is requesting abatement rebate 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 Rebate Requested: $ over years. City Rebate Abatement : Annual $ Total $ County Rebate Abatement: Annual $ Total $ ISD 621 Rebate 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
C. PUBLIC PURPOSE It is the policy of the Mounds View EDA that the use of tax abatement rebate financing should result in a benefit to the public. Please indicate how this project will serve a public purpose. ___Job Creation/Retention: Number of existing jobs
Number of jobs created by project Average hourly wage of jobs created ___Industrial development resulting in additional private investment Enhancement and/or diversification of the city’s economic and tax base ___Removal of blight. ___Provide housing opportunities ___Expand the tax base ___Rehabilitation of a high profile or priority site. ___Other:
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
D. SOURCES & USES SOURCES NAME AMOUNT Bank Loan $ Other Private Funds $ Equity $ Fed Grant/Loan $ State Grant/Loan $ Tax Abatement Rebate $ ID Bonds $ Other $
TOTAL $
USES AMOUNT Land Acquisition $ Site Development $ Construction $ Machinery & Equipment $ Architectural & Engineering Fees $ Legal Fees $ Interest During Construction $ Debt Service Reserve $ Contingencies $ Other $
TOTAL $
111
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
12
E. ADDITIONAL DOCUMENTATION AND CHECKLIST Applicants will also be required to provide the following documentation. ______ A) Written business plan, including a description of the business, ownership/management, date established, products and services, and future plans _______B) Financial Statements for Past Three Years (if existing business) Profit & Loss Statement Balance Sheet _______C) Current Financial Statements Profit & Loss Statement to Date Balance Sheet to Date _______D) Two Year Financial Projections, inc. Profit & Loss, Balance Sheet, Cash Flow Statement. Please list assumptions, inc. estimated personnel levels and sales growth _______E) Personal Financial Statements of all Major Shareholders with a 10.0% or greater ownership interest if “Up Front” Financing is Requested _______F) Letter of Commitment from Applicant Pledging to Complete During the Proposed Project Duration _______G) Application fee of $1000 _______H) Itemized Project Construction Statement from contractor for projects over $500,000 _______H I) 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 Name Date By Its
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
13
IX. Exhibits
Attachment A B: Deposit Agreement
Deposit Agreement for Evaluation of Tax Abatement
Rebate Finance Assistance
By and Between the Mounds View Economic Development
Authority and (The Applicant) This agreement made as of the day of , 20003by 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 preparation of legal documents and for EDA’s consultant(s) to investigate the feasibility of providing Tax Rebate Abatement Financing assistance to (The Applicant) for the redevelopment of the (the “Property”). If the EDA incurs less costs than the deposit, the balance of the fee will be returned to the applicant. If the EDA incurs additional expenses directly related to the feasibility of providing Tax Abatement Rebate Assistance to (The Applicant), or for legal services 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 statutes 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.
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
14
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 Jerry Linke ITS PRESIDENT BY: Kathleen Miller Kurt Ulrich ITS EXECUTIVE DIRECTOR STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of ______ , 20003, by Dan Coughlin and Kathleen Miller Jerry Linke and Kurt Ulrich, the President and Executive Director respectively of the Mounds View Economic Development Authority named in the foregoing instrument. Notary Public
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
15
(The Applicant) BY: ITS: STATE OF MINNESOTA ) ) SS COUNTY OF ) The foregoing instrument was acknowledged before me on this day of ___________ , 20003, by , the of (The Applicant) named in the foregoing instrument. Notary Public
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
16
X. ATTACHMENT B C: APPLICATION REVIEW WORKSHEET
1. The project meets the criteria set forth in Section V of the Tax
Abatement Rebate Financing policy. a) Meets at least one of the objectives in Section III. d) Conforms with one of the eligible uses the criteria defined in Section V. b) Demonstrates need for TAF with the but-for analysis. c) Consistent with all city plans and ordinances.
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 TRAF to new jobs created: Points: $ TRAF request $8,000 or less 5 Number of new jobs created $10,000 or less 4
$ of TRAF 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 $910-13 / hour 2 Under $910 / hour 1
6. Project size: Points: The project will result in the construction 2530,000+ 5 of net square feet 20,000+ 4 10,000+ 3 5,000+ 2 5,000 or less 1
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
TO BE COMPLETED BY CITY STAFF
17
7. Type of Project: Points:
100% Owner Occupied 5 Mix Owner Occupied & Investment 4 Investment Property 3
8. Use: Points: Industrial 5 Office Commercial 5 Warehouse/Distribution 4 Commercial Office 3 Housing 3
9. The project will pay annual Points:
property taxes in the first fully 25,000+ 5
assessed year of $ 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
9. Bonus Points Bonus Points: The project will be 100% pay-as-you-go TRAF. 53 points The project contributes to Co.Highway 10 Redevelopment 53 points The project results in substantial interior or exterior renovation 53 points
The project will enhance the aesthetics of the surrounding area through high quality architectural and/or urban design 53 points
Total Points: Overall project analysis: High 45-38 points Moderate 37-29 points Low 28-20 points Not Eligible 19-0 points
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc
Sub - Total Points: of a possible 45 points.
18
XI. ATTACHMENT C: SAMPLE BUT-FOR ANALYSIS
WITH NO WITH
TAX REBATE FINANCING TAX REBATE FINANCING
SOURCES AND USES SOURCES AND USES
SOURCES SOURCES
Mortgage 9,600,000 8,667,000
Equity 2,400,000 2,400,00
Tax Rebate Financing 0 933,000
TOTAL SOURCES 12,000,000 12,000,000
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 250,000 250,000
Subtotal Construction Costs 7,000,000 7,000,000
Soft Costs 350,000 350,000
Taxes 35,000 35,000
Finance Fees 850,000 850,000
Project Manager 542,000 542,000
Developer Fee 540,000 540,000
Contingency 250,000 250,000
Subtotal Soft Costs 2,567,000 2,567,000
TOTAL USES 12,000,000 12,000,000
Income Statement Income Statement
Sq. Ft. Per Sq. Ft. Sq. Ft. Per Sq. Ft.
Rent-Space 1 100,000 $8.00 800,000 100,000 $8.00 800,000
Rent-Space 2 25,000 $8.50 212,500 25,000 $8.50 212,500
Rent-Space 3 25,000 $9.00 225,000 25,000 $9.00 225,000
Other 0 $0.00 0 0 $0.00 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
Total Return on Equity 7.74% 12.00%
Item 06A M.V. Tax Rebate Policy 7.18.03 Draft.doc