HomeMy WebLinkAbout2008.06.16 EDA Packet AGENDA
CITY OF HUGO
ECONOMIC DEVELOPMENT AUTHORITY
MONDAY, JUNE 169 2008- 8:30 AM
8:30 am 1. Call to Order
8:31 am 2. Roll Call
8:32 am 3. Approval of Minutes
EDA Meeting of May 19,2007
8:35 am 4. Discussion SAC/WAC Fee's
• Jamie Wallerstedt,WSB & Associates
9:15 am 5. Discussion on TIF Certification and Hugo Commons
TIF Application
• Paul Steinman, Springsted
10:00 am 6. Update on Downtown Redevelopment
10:15 am 7. Discussion on Marketing and Promotion of the City
Following the May 25 Tornado
10:30 am 8. Adjournment
BACKGROUND MEMO FOR THE EDA MEETING OF
MONDAY, JUNE 169 2008
3. Approval of Minutes for EDA meeting of May 19,2008
City staff recommends that the EDA approve the minutes for the May 19, 2008 EDA
meeting as presented.
4. Discussion SAC/WAC Fee's
Jamie Wallerstedt from WSB & Associates presented to the EDA the research for the
options for the City's SAC/WAC fees. The EDA asked staff to research the SAC/WAC
connection fee's for the City. Jamie Wallerstedt provided the EDA with alternative
calculations/distribution of costs. She gave real world examples of three options in both
residential and commercial. Granger asked if the EDA could get a spreadsheet that
outlined the options. Wallerstedt stated that she could do that. The EDA decided to talk
about this issue again at its June meeting. In your packet is the spreadsheet that was
provided by Jamie Wallerstedt.
5. Discussion on TIF Certification and Hugo Commons TIF Application
Paul Steinman from Springsted will give a presentation on TIF Certification and will
provide options for the EDA to consider. There will also be discussion on the TIF
Application for Hugo Commons (former End Zone site).
6. Update on Downtown Redevelopment
Staff will update the EDA on the progress of the downtown redevelopment projects.
7. Discussion on Marketing and Promotion of the City Following the Mav 25
Tornado
The City has repeatedly received praise for its efforts in managing the recovery process
following the disaster. The city staff believes the extraordinary media coverage the City
has received during the past few weeks has cast a positive spotlight on the attitude and
professionalism found within the City of Hugo. Staff would like to discuss with the EDA
ways to promote the City during this unique time as a good place to locate a business.
MINUTES FOR THE EDA MEETING OF MAY 19,2008
EDA Vice President Phil Klein called the meeting to order at 8:35 am.
PRESENT: Jan Arcand, Jim Bever, Tom Denaway, Mike Granger Phil Klein, and Brian
Thistle
ABSENT: Fran Miron
CITY STAFF PRESENT: City Administrator Mike Ericson, Community Development
Director Bryan Bear, Associate Planner Rachel Simone, City Engineer Jay Kennedy
APPROVAL OF MINUTES FOR THE EDA MEETING OF APRIL 21,2008
Denaway made motion, Thistle seconded, to approve the minutes for the EDA meeting of April 21,
2008.
All aye. Motion carried.
UPDATE ON BR&E SUBCOMMITTE
Staff provided an update to the EDA on the BR&E subcommittee meeting. The BR&E
subcommittee met on Friday May 2, 2008 for introduction of members and discussion on the
work plan. They appointed Brian Thistle as Chair and Steven Larson as Vice Chair. During
the discussion on the work plan the subcommittee wanted to make sure that businesses were
aware of the committee. They decided to recommend to staff that a section of the EDA
portion of the City website talk about the BR&E subcommittee, have a member be on
"That's Hugo Today" cable access show, and possibly have a write up in the Citizen
Newspaper. The subcommittee members are researching possible grants for business in Hugo
and will bring their ideas to the next meeting.
DISCUSSION ON METRO MSP ECONOMIC DEVELOPMENT WEBSITE FOR
THE MINNEAPOLIS-SAINT PAUL MINNESOTA REGION
Staff presented the new Metro MSP Economic Development Website that is dedicated to
providing information to residents, businesses and Cities in regards to economic
development. "Metro MSP region"refers to Minnesota's 11-county Twin Cities metro area.
It includes the anchor cities of Minneapolis, Saint Paul and Bloomington as well as the
counties of Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne,
Washington and Wright. There is a section of the site that includes properties available
search and planned development areas. It has a GIS component so users can see exactly
where the property is and can see an aerial view of the property.
DISCUSSION SAC/WAC FEE'S
Jay Kennedy and Jamie Wallerstedt from WSB &Associates presented to the EDA the
research for the options for the City's SAC/WAC fees. The EDA asked staff to research the
SAC/WAC connection fee's for the City. Jamie Wallerstedt provided the EDA with
alternative calculations/distribution of costs. She gave real world examples of three options
in both residential and commercial. Granger asked if the EDA could get a spreadsheet that
outlined the options. Wallerstedt stated that she could do that.
Bryan stated that it's the way that it is collected that is problem. Owners are surprised of the
costs. Some other cities split the cost between developers and owners. There may be a
different way to formulate the calculation. The City needs that same amount of money in the
end.
The EDA decided to talk about this issue again at its meeting on June 19, 2008.
UPDATE ON DOWNTOWN REDEVELOPMENT
CD Director updated the EDA on the progress of the downtown redevelopment projects. He
gave an update on the End Zone site plan and TIF application. The applicant has submitted a
site plan application that was considered the May 8, 2008 Planning Commission meeting and
a revised TIF application will be submitted soon. CD Director gave an update on the
redevelopment plans for Carpenters Restaurant, Chuck Lowell's property on Finale Avenue,
and the City owned properties.
DISCUSSION ON TIF CERTIFICATION
Staff has been in contact with Springsted on the timing of certification of the district and will
discuss it with the EDA at their June 19, 2008 meeting
BLUE HERON GRILL—SITE VISIT/RIBBON CUTTING
The EDA was invited to the ribbon cutting ceremony for Blue Heron Grill Restaurant.
ADJOURNMENT
Klein made a motion, seconded by Denaway, to adjourn at 10:00 am.
City of Hugo,MN
Utility Rate Analysis
WSB Project No. 168 7-5 7
Trunk Fees (Paid at the Time of Plat) WAC/SAC Fees (Paid at the Time of Connection)
Developable Number of Sewer Trunk Per Total Sewer Water Trunk Per Total Water Trunk
2030 Land Use Designation Acres SAC/WAC Units Unit Trunk Fee Unit Fee SAC Fee Per Unit Total SAC Fee WAC Fee Per Unit Total WAC Fee Total Utility Fees
Example Low Density Residential
Existing Fees 100 200 N/A N/A N/A N/A $2,200 $440,000 $2,200 $440,000 $880,000
Option 1 Approximate Fees 100 200 $1,500 $300,000 $1,800 $360,000 $700 $140,000 $500 $100,000 $900,000
Option 2 Approximate Fees 100 200 $1,900 $380,000 $2,400 $480,000 $700 $140,000 $500 $100,000 $1,100,000
Example Commercial
Existing Fees 1 10 N/A N/A N/A N/A $2,200 $22,000 $2,200 $22,000 $44,000
Option 1 Approximate Fees 1 10 $1,500 $15,000 $1,800 $18,000 $700 $7,000 $500 $5,000 $45,000
Option 2 Approximate Fees 1 10 $550 $5,500 $700 $7,000 $700 $7,000 $500 $5,000 $24,500
Water's Edge South (Residential)
Existing Fees 119 534 N/A N/A N/A N/A $2,200 $1,174,800 $2,200 $1,174,800 $2,349,600
Option 1 Approximate Fees 119 534 $1,500 $801,000 $1,800 $961,200 $700 $373,800 $500 $267,000 $2,403,000
i
Option 2 Approximate Fees 119 534 $1,900 $1,014,600 $2,400 $1,281,600 $700 $373,800 $500 $267,000 $2,937,000
Blue Heron Grill(Commercial)
Existing Fees 2.2 27 N/A N/A N/A N/A $2,200 $59,400 $2,200 $59,400 $118,800
Option 1 Approximate Fees 2.2 27 $1,500 $40,500 $1,800 $48,600 $700 $18,900 $500 $13,500 $121,500
Option 2 Approximate Fees 2.2 27 $550 $14,850 $700 $18,900 $700 $18,900 $500 $13,500 $66,150
Option 1 = Uniform fee per WAC/SAC unit
Option 2 = Uniform fee per acre with all residential properties weighted the same
Utility Rate Analysis
City of Hugo,MN
WSB Project No. 168 7-5 7 C.Wocuments and Settingsl interniLocal Settingsl Temportuy Internet FilesIOLK61`1061108-Utility Fee Summary(2)Example
,y.
NAM .�--St Y, -pluA� S ;� 9► •�� A... ��
. w
I
City ofHygo, Minnesota
APPLICATION FOR TAX INCREMENT
A. APPLICANT INFORMATION
Name of Corporation/Partnership Development Partners Hugo LLC
Address 2734 County Rd. D East, White Bear Lake,MN 55110
Primary Contact William M.Lentsch
Address 2734 County Rd.D East, White Bear Lake,MN 55110
Phone 651-748-8888 Fax 651-379-5089 Email blentschgcitiesrealestate.com
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. Attach as Exhibit D.
Attorney Name
Address
Phone Fax Email
Accountant Name
Address
Phone Fax Email
Contractor Name D.K. Dockendorf
Address 2728 County Road D East
Phone 651-248-3227 Fax 651-770-1204 Email dalekdkdockendorfinc.com
Engineer Name
Address
Phone Fax Email
Architect Name Caulfield Architectural Design
Address 9388 Erin Court,Woodbury,MN 55129
Phone 651-769-6865 Fax 651-459-1358 Email brucecaulfieldp_msn.com
B. PROJECT INFORMATION
The project will be:
❑ Industrial Greenfield: X New Construction ❑ Expansion
X Commercial Redevelopment: ❑ New Construction ❑ Rehabilitation
❑ Industrial Redevelopment: ❑ New Construction ❑ Rehabilitation
❑ Housing Redevelopment: ❑ New Construction ❑ Rehabilitation
❑ Mixed Use Redevelopment: ❑ New Construction ❑ Rehabilitation
❑ Other
Please explain the basic components of the project proposed, i.e.,amount of new commercial square
footage,numbers of housing units(rental or owner occupied),etc.
The proposed retail building will consist of approximately 23,000 S/F of space with a variety of
suite sizes to fit the future tenants needs.
- 1 -
City of Hugo, Minnesota
The project will be: ❑ Owner Occupied X Leased Space
If leased space,please attach a list of names and addresses of future lessees and indicate the status of
commitments or lease agreements. Attach as Exhibit E. N/A at this time
Project Address 13891 Forest Boulevard North, Hugo, NM 55038
Legal Description See attached Exhibit F
Site Plan Attached: X Yes ❑ No
Amount of Tax Increment Requested for:
Building Demolition $ 61,490.00
Environmental Remediation $
Public Improvements $ 90,000.00(utilities,curb and gutter)
Site Improvements $ 169,010.00
Land Acquisition $
(Land Acquisition shall not exceed 50%of total subsidy request)
Total Subsidy Requested $ 543,100.00 over 25 years 6%_$59,143/year
Current Assessed Value on Project Site: $ 541,600.00
Current Real Estate Taxes on Project Site: $ 12,340.00
City $ 4,305.80
County $ 3,198.90
School District $ 510.38
Estimated Assessed Value upon Completion: $ 4,500,000.00
Phase I $
Phase II $
Estimated Real Estate Taxes upon Completion:
Phase I $ 73,250.00
Phase II $ N/A
Construction Start Date: 8-1-08
Construction Completion Date: 2-1-09
If Phased Project: N/A Year %Construction Completed
N/A Year %Construction Completed
C. PUBLIC PURPOSE
It is the policy of the City of Hugo that the use of Tax Increment Financing should result in a benefit to the
public. Please indicate how this project will serve a public purpose.
X Job Creation: Number of existing jobs 0
Number of jobs created by project 96
X Increase in Tax Base
- 2 -
City of Hugo, Minnesota
X Enhancement or diversification of the city's economic base.
❑ New industrial development which will result in additional private investment in the area.
X The project contributes to the fulfillment of the City's development or redevelopment objectives.
X Removal of blight or the rehabilitation of a high profile or priority downtown site.
❑ Other:
D. SOURCES& USES
SOURCES NAME AMOUNT
Bank Loan Unknown $ 3,500,000—80%of cost
Other Private Funds $
Equity $ 853,490
Fed Grant/Loan $
State Grant/Loan $
Other Loans $
ID Bonds $
Tax Increment $ 543,100***
TOTAL $
**Note: Tax Increment is not an upfront funding source as it will be provided only on a pay-as-you-
go basis. Developer needs to identify funding sources to cover ALL costs up front,absent Tax
Increment. ***This will be used either to improve ROI to the Investors or to reduce up-front equity
USES See Attached Exhibit G AMOUNT
Land Acquisition $
Site Development $
Construction $
Machinery&Equipment $
Architectural& Engineering Fees $
Legal Fees $
Interest During Construction $
Debt Service Reserve $
Contingencies $
TOTAL $
E. ADDITIONAL DOCUMENTATION
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 Two Years
Profit& Loss Statement
Balance Sheet N/A—new entity
❑ C) Current Financial Statements
Profit&Loss Statement to Date
- 3 -
Qi y of Hugo, Minnesota
Balance Sheet to Date N/A—new entity
❑ D) Two Year Financial Projections To Come
❑ F) Personal Financial Statements of all Major Shareholders
Profit&Loss
Current Tax Return To Come
❑ G) Letter of Commitment from Applicant Pledging to Complete During the Proposed Project
Duration To Come
❑ H) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions
of their Participation in Project To Come
X 1) Non refundable application fee of$2,500
X J) Check for$10,000 to be placed in escrow to be used by the City to complete analysis of the
subsidy requested,and to pay costs associated with Attorney's fees for the TIF Agreement
(unused portion to be refunded)
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 City of Hugo 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 City after the filing of this application.
Applicant Name Development Partners Hugo LLC Date May 22,2008
By
Its Managing Member
-4 -
City of Hygo, Minnesota
TAX INCREMENT FINANCING PROPOSAL REVIEW WORKSHEET
Redevelopment Districts
1. The project meets the criteria set forth in Section III of the City's Tax Increment Financing
policy.
X a) Meets minimum thresholds for size,value,and tax capacity.
X b) Meets at least one of the objectives in Section III and satisfies the provision set forth in
Section IV.
X c) Demonstrates need for TIF with the but-for analysis.
X e) Consistent with all city plans and ordinances.
X f) Serves at least two public purpose as defined in Section IV. It serves 5 objectives—some of
the jobs will have livable wage and benefits. All jobs are expected to pay higher than
minimum wage.
2. Ratio of Private to Public Investment in Project: Points:
$3,810,390 Private investment 5:1 5
$ 543,100 Public investment 4:1 4
7.02:1 Ratio Private to Public Financing 3:1 3
2:1 2
Less than 2:1 1
3. Structure of Financing: Points:
X < 10%of Subsidy Requested for Land Acq. 5
❑ 11%-20%of Subsidy Requested for Land Acq. 4
❑ 21%-30%of Subsidy Requested for Land Acq. 3
❑ 31%-40%of Subsidy Requested for Land Acq. 2
❑ 41%-50%of Subsidy Requested for Land Acq. 1
4. Type of Project: Points:
❑ 100%Owner Occupied 5
X Mix Owner Occupied&Investment 4
❑ Investment Property 3
5. Use: Points:
X Retail 5
❑ Office/Commercial 5
❑ Mixed-use 5
❑ Housing 3
❑ Industrial 1
6. Type of Development: Points:
X Redevelopment of Substandard Structures 5
❑ Development of Vacant Land 3
City of Hygo, Minnesota
7. Job Creation/Wage Level: Points:
X 15+Full Time Equivalent(FTE)Jobs,$15-$20 per hour 5
X 10-14 FTE's,$10414 per hour 4
X 1-9 FTE's,$749 per hour 3
Employees Managers Hourly Wages
Coffee Shop 6 2 $7.00-$16.00
Restaurant Franchise 6 2 $7.00-$16.00
Florist/Gift Shop 4 1 $6.50-$13.00
Media Retailer 8 2 $6.50-$16.00
Beauty Salon 10 2 $20.00-$40.00
Cell Phone Retailer 6 2 $10.00-$18.00
Sporting Goods 5 1 $8.00-$16.00
Accounting Service 8 2 $20.00-$42.00
Financial Service 8 2 $20.00-$50.00
Real Estate Service 5 1 $10.00-$25.00
Dry Cleaner 4 1 $6.50-$15.00
Health Service 6 2 $18.00-$34.00
8. Assessed Value: Points:
X 7+times current 5
❑ 6 times current 4
❑ 5 times current 3
❑ 4 times current 2
❑ 3 times current 1
9. The project will pay annual property taxes in the first fully Points:
assessed year of$73,250
50,000+5
35,000+4
20,000+3
10,000+2
Under 10,000 1
10. Likelihood that the project will result in unsubsidized,spin-off Points:
development.
High 5
Moderate 3
X Low 1
ON o Hu o, Minnesota
Sub-Total Points: 40 of a possible 45 points.
11. Bonus Points: Points:
X The project will be 100%Pay-as-you-go TIF 3 points
X The project meets the goals of downtown redevelopment 2 points
Total Points: 45
Overall Project Analysis: 40-48 Points Max Remaining Term
35-39 Points 65-75%of Remaining Term
25-34 Points 40-50%of Remaining Term
15-24 Points 25-30%of Remaining Term
0-14 Points Not Eligible
City of Hugo, Minnesota
EXHIBIT A
The principles of Development Partners, LLC have been involved in numerous projects ranging
from residential to commercial properties. The projects have included but are not limited to
Creekridge View located in White Bear Township. This SFR Development was built in 1993
including 28 executive lots. The SFR development named The Doth Addition was built in 1994
in Shoreview. Mendota Woods located in Mendota Heights was built in 1996 including 14 SFR
lots. Hidden Lake Pointe Townhomes, built in 2004 in White Bear Lake. This development
consists of 14 units including detached floor plans as well as twin homes. The Hidden Lake
Office Park in White Bear Lake was built in 2005. This 8-unit office condo project consists of 3
separate buildings. The ponds of Ramsey,located in Ramsey began in 2001. This development
included 120 Townhome lots and 82 SFR lots. Eagles Landing is located in the Bald Eagle
Industrial Park in Hugo and is a 17,920 S/F Office Warehouse to be built.
Cityof Hugo, Minnesota
EXHIBIT B
The proposed retail building will consist of approximately 23,000 S/F of space with a variety of
suite sizes to fit the future tenants needs. The unique shape of this building which allows for
strong visibility on Hwy 61 along with the plaza area and front door parking are just a few of the
many attractive features to this building. We have noted some examples of tenants on the
proposed plan in which we anticipate will be utilizing these spaces. We are forecasting business
including but not limited to a coffee shop that may offer a small amount of sandwiches or bakery
items as well as some sort of a small food business that may offer wine or beer to accompany its
menu. The plaza area with outside tables will be very attractive to these types of vendors. We
also anticipate businesses such as health and beauty retailer, cell phone retailer, physical
therapist, message therapist as well as a gift or book store. The site allows for a variety of
businesses and opens up the Hugo community to some that were not able to extend their business
here in the past. The site also will allow for outdoor vendors such as local craft fairs, farmers
markets and specialty items that are made locally.
City of Ago, Minnesota
EXHIBIT C
William A Lentsch
Dale K. Dockendorf
Remainder of Investors to be identified
EXHIBIT D
HILJGO COMMONS PROFORMA
EFFECT ON RETURN ON EQUITY INVESTMENT OF NO TIF
.........................................................................................................................
WITHOUT TIF WITH TIF
r..............................................T...................I.............T.......................................................................................................................... ..............................................................................................................
SQ FT RENT/SQ FT SQ FT RENT/SQ FT
L ........................................L................................. .............................................................. ................................................. ...........................................................................................................
RETAIL 23,000 $16.80 $386,400 RETAIL 23,000 $16.80 $386,400
.........................................
$o fv
TIF $59,143
..............................................Z................................. ........................................................................................................................ ...........................................................................
................................
TOTAL 23,000 $386,400 TOTAL 23,000
$445,543
?................................................. .....................................z......................................................................
VACANCY 10% $38,640 E VACANCY 100% $38,640
........................... ................................................. ....................................
.........................................
EFFECTIVE RENT $347,760 EFFECTIVE RENT
$406,903
....................................................................................................................r...........................T..........................................................................................................................................................................
RE TAX ON VACANCY $3.88 sq.ft. $8,924 RE TAX ON VACANCY $8,924
..........................................................................................................
CAM ON VACANCY $3.95 $9,085 CAM ON VACANCY
$9,085
................. .........................
................................
.............................................. ................................. ............................................................. ................................................. ............................................................................
...............................
1 NOI $329,751 NOI $388,894
:.............................................. ................................. ....................................................................... ................................................. .................................... ........................................
.....................
DEBT $326,252 DEBT
$326,252 1
................................................i................................. ............................................................. ................................................. .................................... ........................................................................
1 CASH FLOW $3,499 CASH FLOW
$62,642
..................................&............................................................. ................................................. ...........................................................................................................
EQUITY $853,490 1 EQUITY $853,490
............................................... ................................. ............................................................. ..............................................................................................................................................................
E RETURN **0.41% RETURN **7.340/o
.................................................................................................o........................................................................................................ ...........................................................................................................
..........................................................................................................................................................
BLDG VAIJSQFT TOT VAL
23,000 $160.87 $3,700,000
COST: $183.85 $4,353,490 WITHOUT DE-
VELOPER FEE
DEBT AS PERCENT OF COST 800/0
1 DEBT $3,500,000
1 EQUITY $853,490
RETURN ON EQUITY GOAL 10% $85,349
DEBT PMT 7% 20 YR $326,252
..................... ...... .... ..... .............
** Need to get to a 10%annual return
HUGO COMMONS PROFORMA
EFFECTS ON RENTS OF NO TIF
...........................................................................................................................................................I ....................................................................................................................................................................
WITHOUT TIF WITH TIF
....................................................................................................................................................... ................................................. ................................. ..............................................................................
SQ FT RENT/SQ FT SQ FT RENT/SQ FT
................................................................................................................ ...................................... ................................................. ................................. ...............................................................................
RETAIL 23,000 $20.10 $462,300 RETAIL 23,000 $16.80 $386,400 1
............................................................................ .............................................................................
i TIF $0 TIF $59,143
........................................................................... ........................................................................... ................................................. ................................. ................................. ............................................
TOTAL $462,300 TOTAL $445,543
........................................................................... .................................... ...................................... ..................................................................................................................... ...........................................
VACANCY 10% $46,230 VACANCY 10% $38,640
...........................................................................
I EFFECTIVE RENT $416,070 E E EFFECTIVE RENT $406,903
............................................................................ .......................................................................................................................................................................................................................................................
RE TAX ON VACANCY $3.88 sq.ft. $8,924 RE TAX ON VACANCY $3.88 sq.ft. $8,924
..................................................
................................................Z,......................................i ................................................. ................................. .............................................................................
CAM ON VACANCY $3.95 $9,085 CAM ON VACANCY $3.95 $9,085
.......................I................................................... ....................................
.................?................................................................................... ................................. ...........................................
................................................................................................................ ...................................... ................................................................................... .............................................................................
NOI $398,061 is NOI $388,894
.......................................................................... .................................... ...................................................I.......................................... ................................. ................................. ............................................
DEBT $326,252 DEBT
$326,252
...........................................................................
.................................... ...................................... ................................................. ................................. ..............................................................................
CASH FLOW $72,809 CASH FLOW $62,642
................................................................................................................ ...................................... .................................................................................................................................................................
I EQUITY $853,490 EQUITY $853,490
................................................................................................................r..............................................r...................................................................................r..............................................................................n
RETURN 8.53% E RETURN "734%
.............................................................................
I.................................... ..............................................;................................................................................... .............................................................................
.............................................................................................................................................................
BLDG VALJSQ FT TOT VAL
23,000 $160.87 $3,700,000
COST: $183.85 $4,353,490 WITHOUT DE-
VELOPER FEE
DEBT AS PERCENT OF COST 80%
DEBT $3,500,000
I EQUITY $853,490
RETURN ON EQUITY GOAL 10% $85,349
I DEBT PMT 7% 20 YR $326,252
.............................................................................................................................................................
** Need to get to a 10% annual return
City of Hugo, Minnesota
EXHIBIT E
Not known at this time. To be provided.
City ofHugo, Minnesota
EXHIBIT F
All that part of the North lt2 of the Northwest IA of Section 29,Township3l,Mange 21,described as follows:
Beginning at the intersection of the South line of said tract and the East line of State I iighway leo.61,as ttow widened to 111 feet;
thence North 11 degrees 51 minutes East,along said Highway line a distance of$01.4 feet to the actual point of beginning of the tract
to be described;thence Easterly and parallel with the South line of said North i,'2 of NW 14 a distance of 400 feet;theucc Northerly
at right angles to last course a distance of 357.26 feel;thence Westerly and parallel with the South line of said North 112 of NW 1,4 a
distance of 325.23 feet to its intersection with the East line of State Highway No.61,as nu-.v widened to 111 feet;thence South t 1
degrees 51 minutes West along said Highway line a distance of 36S.0 feet to the actual point of beginning.Washington County,
Mitutesota.
City of Hugo, Minnesota
EXHIBIT G
See Attached Sworn Construction Statement.
Sworn Construction Statement
PROPERTY ADDRESS Frenchman Centre(Previous End Zone Bar)
Hugo, MN 55038
23,123 S/F
ITEM FURNISHED BY Development Shell Combined
1. Plans Caulfield &Associates $15,600.00
2. Survey& Engineering Alliant Engineering $21,400.00
3. Building Permit/SAC City of Hugo $45,000.00
4. Demo $61,490.00
5. Excavating/Grading $92,000.00
6. Footings $45,000.00
7. Foundation/Slab $71,000.00
8. Site Utilities $75,000.00
9. Asphalt $65,000.00
10. Reinforcing Steel Rebar $25,000.00
11. Curb&Gutter $15,000.00
12. Sanitary Sewer/Storm See Site Utitlities
13. Steel Framing $305,000.00
14. Interior Framing $35,000.00
15. Steel Joist See Framing
16. Waterproofing $15,000.00
17. Windows/Doors $65,000.00
18. Buildout Allowance $20/SF $400,000.00
19. Roofing $76,000.00
20. Insulation $23,500.00
21. Caulking $10,000.00
22. Acoustical Ceiling $80,000.00
23. Electrical $90,000.00
24. Plumbing/HVAC $200,000.00
25. Aluminum Entrances $200,000.00
26. Face Brick/Stone $125,000.00
27. Pavers $60,000.00
28. Interest $125,000.00
29. Phase I, Environmental s,Atty Fees $26,000.00
30. Conveyance Fee $5,000.00
31. Fire Sprinkler $46,000.00
Page 1 of 14
32. Garage Door $3,000.00
33. Landscaping/Retaining Walls $85,000.00
34. EFIS $163,000.00
37. Leasing Commission $210,000.00
38. Dumpster $2,500.00
39. Land Costs $1,070,000.00
40. Cont. Profit/Overhead $225,000.00
41. Closing Costs $80,000.00
42. Builders Risk Insurance $12,000.00
43. General Condition Site Supervision/Site Trailer/Etc. $85,000.00
TOTALS $4,353,490.001
Page 2 of 14
/,
,'
l
i� /
i
��` - ,� ,
� �� "tee ' � Y
_..
,� 1�� � i
�'-"'`��
� ��.
Si
e; �'
�/ �``
I� , l!
(_� \�•
.� � � ���
11 J
�' �; rte- i
� ���"Y ��rtia�
�•�`.
�� �Ily
�.
1 �..
�:
ti �^ . _._�_._ �
�. ,,,
.� ,r _:
V S. }� �. !
, Ih .. n �� t � i
E •�:i�
E I��
. � �� � H' -.---------.
`��� �,
_, ���
{1 5
5 �\�
1r ss
i.
�I�t M� ■�
[t � W .�
�.. , ��'
;1�� =� �
Y j 1-
. - t� t� ��
���, ;�,
`,�� V '■
■
1
.l'
�:��
,,i�: `,
• �� � �, ,
`�: ,��
t
-----Original Message-----
From: Paul Steinman [mailto:psteinman@springsted.com]
Sent: Thursday, April 24, 2008 4:54 PM
To: Bryan Bear
Cc: Mikaela Huot; Ron Otkin; Rachel; Ippel, Mary
Subject: RE: Hugo Downtown Redevelopment TIF District
Here are our choices as it currently sits, with Frenchman Centre sort of out there in the
background.
1) certify before June 30, 08. First possible receipt of increment in 09
2) certify after June 30, 08. First possible receipt of increment in 10 (which would
include the first increment associated with Frenchman Centre if they build it in 08)
3) modify the TIF Plan to identify the specific year (if after 2010) in which we want to
start receiving increment. The problem with this is, we are still guessing at the year we
want first increment.
In order to narrow these choices down I need to know the date of first demolition of the
building which the council found substandard. (Rachel - can you identify this date?)
Here is what we generally struggle with on these issues. Each year that passes, the
value of the properties in the district generally rise (although maybe that's not the case
currently). Remember that the base value will be set at the time of certification,
therefore, the more the values rise in the district, the higher the base value will be. (High
base value bad, low base value good) To complicate that is the fact that the base value
includes the value of the parcels with the demolished buildings PRIOR to the
demolition.
Want more complication? What could happen because of all the demolition of buildings
that has occurred and the possible stagnation in values now as an effect of the general
housing market, is that Frenchman Centre could get built and assessed at the assumed
value, and very little increment flows into the district. An example to illustrate this point
would be assume our base value is $100, then demolition occurred which removed $25
of value. At that point the first $25 of new value created does not generate any
increment, it only gets us back to the base value. Then as value is created over and
above the base value, increment will be generated.
We are trying to balance all of this entirely to avoid getting a TIF check from the County
for some nominal amount of tax increment because that year is then counted as our first
year of increment meaning we only have 25 remaining. Ideally we want our first year of
increment to have the largest impact possible.
Paul T. Steinman
Vice President/Consultant
Springsted Incorporated
380 Jackson Street, Suite 300
St. Paul, Minnesota 55101-2887