ITEM 4.2 Parkview Retail64up
Otkgo
MINNESOTA
DEPARTMENT INFORMATION
Request for
City Council Action
ORIGINATING DEPARTMENT REQUESTOR:
MEETING DATE:
Administration City Administrator/Finance Director Flaherty
October 28, 2019
PRESENTER(s) REVIEWED BY:
ITEM #:
Administration
4.2
STRATEGIC VISION
MEETS:`I
THE CITY OF OTSEGO:
proposed property tax abatement program for the Parkview Retail development.
Is a strong organization that is committed to leading the community through innovative
communication.
X
Has proactively expanded infrastructure to responsibly provide core services.
Yes — Held October 28, 2019
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
X
Is a social community with diverse housing, service options, and employment opportunities.
development stage building plans were submitted on October 15, 2019, with the City Council expecting to
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff is recommending that the City Council approve a resolution calling a public hearing on the
proposed property tax abatement program for the Parkview Retail development.
ARE YOU SEEKING APPROVAL OF A CONTRACT?
IS A PUBLIC HEARING REQUIRED?
No
Yes — Held October 28, 2019
BACKGROUND/J USTI FICATION:
The City of Otsego has received a request for financial assistance from Rice Companies for the Parkview
Retail development. This development received preliminary plat approval in July 2019. A final plat and
development stage building plans were submitted on October 15, 2019, with the City Council expecting to
review the application on November 12, 2019.
The financial assistance request from Rice Companies was for the construction of certain streets, utilities
and related public improvements within the Parkview Retail development. The improvements are currently
estimated to cost $871,171; however, it should be noted that the improvements have not been through
engineering design or the contractual bidding process, so the cost is subject to change.
City staff is recommending that the City Council provide funding for the improvements through tax
abatement. The City is authorized to establish tax abatement through Minnesota Statute §469.1812
through §469.1815. The City has adopted a Tax Abatement Policy to be used as a guide in the processing
and review of financial assistance requests.
Per request from the City, Wright County has proposed to partner with the City to provide funding for the
improvements through tax abatement. Although not formally approved by the County Board, discussions
with County staff indicate that the Board would support funding up to an amount of $400,000.
Participation by Wright County is subject to their own public hearing, expected to be on November 19tH
The proposed tax abatement program would establish an abatement of a portion of the increase in
property taxes caused by the Parkview Retail development to finance and provide the public infrastructure
improvements. The maximum amount of the tax abatement is estimated to be $950,000 based on eligible
development costs, estimated values of the new development and current property tax rates.
Minnesota Statute and City Policy require a public hearing to be held for the proposed property tax
abatement program. On September 23, 2019, the City Council approved Resolution 2019-51 calling for a
public hearing on the proposed property tax abatement program; which is being conducted at the October
28, 2019 meeting.
Nick Anhut from Ehlers, the City's development finance consultant will be present at the October 28, 2019
meeting. He will review the attached memo with the City Council and be available for questions from the
City Council and/or public.
Other than holding the public hearing, there are no required action items for this meeting. Briggs and
Morgan, the City's bond counsel will soon begin drafting a tax abatement agreement as well. The parties to
said agreement would include the City, Wright County and the developer. This agreement will be
presented to the City Council for consideration of approval via resolution at the November 12, 2019
meeting. The timing difference was to coincide with the City Council review of the final plat and
development stage building plans.
SUPPORTING DOCUMENTS ATTACHED:
• Memo from Nick Anhut, Ehlers
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
No action is necessary for this item.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A
g'*'- E H L E R S
No LEADERS IN PUBLIC FINANCE
To: Adam Flaherty, City of Otsego
From: Nick Anhut, Ehlers
Date: October 23, 2019
Subject: Summary and Analysis for Public Infrastructure Abatement Request
Overview
Rice Companies has approached the City of Otsego about developing a 20 -acre plat of
agricultural land into mixed-use commercial and housing uses. A new Coburns is proposing to
anchor Phase I of the development in 2020 with a 44,000 square foot (s.f.) grocery store.
Although the developer is not committed to a timeline for development of future phases, it is
currently platting for approximately 70 units of multi -family housing, and the concept anticipates
additional retail and small tenant office development to follow as well as.
In addition to site preparation, internal infrastructure and building construction, the development
requires two public streets designed to service all phases of the development as well as
adjacent areas. Costs of the streets will be incurred up front as part of the site preparations for
Phase I, but ahead of future phases of development. The developer has stated that it is unable
to privately finance the cost of the public streets internally or by burdening the property with
assessments. Due to the overall desire to encourage development within the city and the
expected increase in tax revenues made available from the new commercial use, the City of
Otsego is considering the use of tax abatement to finance up to $950,000 of public
infrastructure capital and interest costs.
Background on Tax Abatement
The authority for tax abatement is found in Minnesota Statutes, Section 469.1812 to 469.1815.
It is a tool available to municipalities to help incentivize new or existing development, as well as
finance public infrastructure and/or public facilities. The tool enables the City to use the
property tax revenues received from a particular property to help finance the development or
infrastructure. With a tax abatement program, a property pays its taxes to the county auditor
and then the county auditor remits each jurisdiction its share of the taxes within the regular
property tax settlement. The local government then either rebates a portion of the taxes paid to
assist in private financing for a qualified public purpose, or allocates that resource toward
repaying its bonds, loans or costs incurred with financing a public improvement. The property
does not pay any more or less than other similar parcels when tax abatement is used.
It is each local government's choice whether to participate, as well as decide how much and for
how long it will abate the taxes. There are a few statutory requirements. These include:
1. A public hearing must be held following publication of a notice in the newspaper at least
10 days proper to the hearing.
2. After the public hearing is held, each participating local government can consider a
resolution approving the term and amount of abatement, find that the benefits of the
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LEADEP.S IN PUBLIC FINANCE
abatement exceed the costs, and find that the project meets one of the following
objectives:
a, increase or preserve tax base;
b. provide employment opportunities in the political subdivision;
c. provide or help acquire or construct public facilities;
d. help redevelop or renew blighted areas;
e. help provide access to services for residents of the political subdivision;
f. finance or provide public infrastructure;
3. Total tax abatements for all projects within a local government cannot exceed the
greater of $200,000 or 10% of its net tax capacityep r year.
The participating local governments have many choices for the delivery and purpose of the
abatement. The tool can be specified for a term of up to a 20 -year maximum. It can reimburse
for a specific project cost or financing or more generally provide an incentive subsidy. The
abatement can utilize all or just a portion of the annual taxes available. Consideration should be
given as to whether tax abatement payments impair existing budgets or anticipated revenues
necessary to meet future service needs incurred by the development. Typically, tax abatement
payments have been outside levy limits for MN cities and counties.
Tax Abatement Analysis
The existing property consists of seven (7) parcels with a preliminary Pay 2020 estimated
market value of $1,281,000.
The new grocery, based upon a preliminary estimate of $5,100,000 million taxable value from
the County assessor's office, is expected to pay approximately $166,800 in annual property
taxes. The exact amount of taxable value will not be determined until the facility is constructed
by the close of 2020, and first new taxes made available for the 2022 tax collection.
Of the increased tax capacity projected for the property from the grocery store above its current
levels, approximately $107,344 represents local property taxes eligible for abatement. The
city's share of this amount is approximately $34,195 per year and the county's share at $41,983.
The school district has declined to participate and represents the remaining $31,166. If only two
of the three major jurisdictions participate, the maximum term of the abatement can be up to 20
years. Starting with the increased taxes in 2022, the maximum term available is to 2041.
The remaining taxes paid by the developed grocery property are either the existing tax levels
from its current use or ineligible for abatement. Approximately $42,310 relates to state property
taxes and $9,909 is for school district operating levy referenda both ineligible for abatement.
Any additional development phases will increase the overall tax capacity over the estimates
above. A fully developed 20 -acre site could reasonably achieve a combined taxable market
value of $15 - 18 million, representing a 12x to 14x increase from the existing site. Using
modest estimate of the development concept, the estimate of the potential annual City tax
abatement revenue is $89,700, with the County's at $110,130.
Details on the Proposed Public Infrastructure Financing
The development concept includes multiple phases: the aforementioned commercial
development at the SE corner of Highways 39 and 42, as well as future mixed-use phases
consisting of apartments and office/retail development. The concept requires the installation of
an estimated $900,000 in public infrastructure to install two public streets and right of way
improvements as part of the initial phase.
BUILDING COMMUNITIES, IT'S WHAT WE DO. Q info@ehlers-inc.com 1 (800) 552-1171 (ff) www.ehlers-inc.com
gk�EHLERS
LEADERS IN PUBLIC FINANCE
Wright County is proposing to partner with the City to provide funding to construct the
improvements using tax abatement. Participation by Wright County would be subject to its own
Abatement public hearing process and the negotiation of a cooperative agreement with the City.
In discussions with County Officials, it is anticipated that the County would provide its
abatement revenue stemming from the grocery and apartment development in an amount up to
$400,000 to reimburse the City's public infrastructure cost contribution. Analysis of the
development and potential tax revenues anticipates that the County's potential abatement
revenue from the grocery itself could provide this amount within ten years, adding the
apartments shows the potential to recoup within 6 years. The remainder of the infrastructure
expense is anticipated to be recovered by City of Otsego's abatement revenues within the 20 -
year maximum. An abatement revenue cash flow analysis for just the grocery as well as
different phases of the potential development are provided as an Exhibit A to this memo.
Risks and Considerations
The proposal is for the City and County to use the abatement revenues to reimburse costs
associated with installing the public infrastructure. There is financial risk for repayment if taxes
are not paid on the property, if the development is significantly delayed, or if the taxes are less
than expected. For example, if annual taxes are less than anticipated, the abatement revenue
would also be proportionately lower. We recommend the City and/or County enter into an
abatement agreement with the developer which spells out the terms and conditions for the use
of this tool and provides additional security to ensure that the public infrastructure costs are
recovered in the event the developer does not complete the anchor grocery development.
To alleviate a portion of this risk, we recommend the developer covenant it will not default on its
taxes, petition for a reduction of taxes while the loan is outstanding, as well as provide a letter of
credit in the amount of the public infrastructure costs until at least the grocery store is
constructed. This agreement could be a single document for both local governments that the
City's public finance attorney could draft.
We have worked on several tax abatement projects across the State. In our experience, the
most important finding is the one in which the local government must find that the benefits of the
project financed by the abatement will outweigh the costs, namely that the cost of the public
infrastructure will provide a net benefit to the community considering the public expense. In
addition, the resolution must also state that proposed project to be financed meets one of the
objectives identified within the Abatement Statute. In our opinion, the public infrastructure and
overall development demonstrates three of the criteria: (1) increasing the tax base, (2) providing
employment opportunities in the political subdivision, and (3) financing and providing public
infrastructure.
Further, the use of tax abatement fits within larger Community and Economic Development
policies and objectives of the City. The anticipated development will create public benefit in the
form of jobs, the ability to create new infrastructure, provide new community amenities or attract
new services, and generates momentum for new types of development within the City of
Otsego.
Please contact me at (651) 697-8507 with any questions. I look forward continued discussion
as the City of Otsego and Wright County consider this project.
BUILDING COMMUNITIES. IT'S WHAT WE DO. 0 info@ehlers-inc.com Zy 1 (800) 552-1171 www.ehlers-inc.com
EXHIBIT A - Tax Abatement Cash Flow Scenarios
Phasa In - rrnrary (lnly in 9n9n
Phase I - Grocery in 2020; Phase I - Grocery and Apartments (2020/2021);
Apartments in 2021 Phase 11 - Mixed Use Office/Retail (20231
City
Present
City s
Present
County
Present
Abatement
Value
Abatement
Value
Abatement
Value
Period
Tax
w/ Tax Rate
at
w/ Tax Rate
at
Years
Year
36.060%
2.50%
44.273%
0.00%
28,885
2020
-
-
28,885
85,626
35,464
2021
28,885
111,779
35,464
148,375
28,885
2021
-
-
-
-
0.5
2022
17,098
16,269
20,992
20,992
1
2022
17,098
32,337
20,992
41,983
1.5
2023
17,098
48,206
20,992
62,975
2
2023
17,098
63,880
20,992
83,967
2.5
2024
17,098
79,360
20,992
104,959
3
2024
17,098
94,649
20,992
125,950
3.5
2025
17,098
109,749
20,992
146,942
4
2025
17,098
124,663
20,992
167,934
4.5
2026
17,098
139,393
20,992
188,925
5
2026
17,098
153,941
20,992 F
209,917
5.5
2027
17,098
168,309
20,992
230,909
6
2027
17,098
182,500
20,992
251,901
6.5
2028
17,098
196,515
20,992
272,892
7
2028
17,098
210,358
20,992
293,884
7.5
2029
17,098
224,030
20,992
314,876
8
2029
17,098
237,533
20,992
335,867
8.5
2030
17,098
250,869
20,992
356,859
9
2030
17,098
264,041
20,992
377,851
9.5
2031
17,098
277,050
20,992
398,843
10
2031
17,098 F
289,898
20,992
419,834
10.5
2032
17,098
302,588
20,992
440,826
11
2032
17,098
315,121
20,992
461,818
11.5
2033
17,098
327,499
20,992
482,809
12
2033
17,098
339,725
20,992
503,801
12.5
2034
17,098
351,800
20,992
524,793
13
2034
17,098
363,725
20,992
545,784
13.5
2035
17,098
375,503
20,992
566,776
14
2035
17,098
387,136
20,992
587,768
14.5
2036
17,098
398,626
20,992
608,760
15
2036
17,098
409,973
20,992 F
629,751
15.5
2037
17,098
421,180
20,992
650,743
16
2037
17,098
432,249
20,992
671,735
16.5
2038
17,098
443,182
20,992
692,726
17
2038
17,098
453,979
20,992
713,718
17.5
2039
17,098
464,643
20,992
734,710
18
2039
17,098
475,176
20,992
755,702
18.5
2040
17,098
485,578
20,992
776,693
19
2040
17,098
495,852
20,992
797,685
19.5
2041
17,098
505,999
20,992
818,677
20
2041
17,098
516,021
20,992
839,668
Totals:
683,903
516,021
839,668
839,668
Phase I - Grocery in 2020; Phase I - Grocery and Apartments (2020/2021);
Apartments in 2021 Phase 11 - Mixed Use Office/Retail (20231
City
Present
County
Present
Abatement
Value
Abatement
Value
w/ Tax Rate
at "
w/ Tax Rate
at
36.060%
2.50%
44.273%
0.00%
17,098
16,269
20,992
20,992
17,098
32,337
20,992
41,983
28,885
59,147
35,464
77,447
28,885
85,626
35,464
112,911
28,885
111,779
35,464
148,375
28,885
137,608
35,464
183,838
28,885
163,119
35,464
219,302
28,885
188,314
35,464
254,766
28,885
213,199
35,464
290,229
28,885
237,776
35,464
325,693
28,885
262,050
35,464
361,157
28,885
286,025
35,464
396,621
28,885
309,703
35,464
432,084
28,885
333,089
35,464
467,548
28,885
356,186
35,464
503,012
28,885
378,998
35,464
538,476
28,885
401,529
35,464
573,939
28,885
423,781
35,464
609,403
28,885
445,759
35,464
644,867
28,885
467,465
35,464
680,330
28,885
488,903
35,464
715,794
28,885
510,077
35,464
751,258
28,885
530,989
35,464
786,722
28,885
551,643
35,464
822,185
28,885
572,042
35,464
857,649
28,885
592,189
35,464
893,113
28,885
612,088
35,464
928,577
28,885
631,741
35,464
964,040
28,885
651,151
35,464
999,504
28,885
670,321
35,464
1,034,968
28,885
689,255
35,464
1,070,431
28,885
707,956
35,464
1,105,895
28,885
726,425
35,464
1,141,359
28,885
744,666
35,464
1,176,823
28,885
762,682
35,464
1,212,286
28,885
780,476
35,464
1,247,750
28,885
798,050
35,464
1,283,214
28,885
815,407
35,464
1,318,678
28,885
832,549
35,464
1,354,141
28,885 1
849,481 1
35,464
1,389,605
City
Present
County
Present
Abatement
Value
Abatement
Value
w/ Tax Rate
at
w/ Tax Rate
at
36.060%
2.50%
44.273%
0.00%
17,098
16,269
20,992
20,992
17,098
32,337
20,992
41,983
28,885
59,147
35,464
77,447
28,885
85,626
35,464
112,911
28,885
111,779
35,464
148,375
28,885
137,608
35,464
183,838
44,850
177,219
55,065
238,903
44,850
216,340
55,065
293,968
44,850
254,978
55,065
349,033
44,850
293,140
55,065
404,097
44,850
330,830
55,065
459,162
44,850
368,055
55,065
514,227
44,850
404,821
55,065
569,292
44,850
441,132
55,065
624,356
44,850
476,996
55,065
679,421
44,850
512,416
55,065
734,486
44,850
547,399
55,065
789,551
44,850
581,951
55,065
844,615
44,850
616,075
55,065
899,680
44,850
F 649,779
55,065
F 954,745
44,850
683,066
55,065
1,009,810
44,850
715,943
55,065
1,064,874
44,850
748,413
55,065
1,119,939
44,850
780,483
55,065
1,175,004
44,850
812,157
55,065
1,230,069
44,850
843,439
55,065
1,285,133
44,850
874,336
55,065
1,340,198
44,850
904,851
55,065
1,395,263
44,850
934,989
55,065
1,450,328
44,850
F 964,756
55,065
1,505,392
44,850
994,154
55,065
1,560,457
44,850
1,023,190
55,065
1,615,522
44,850
1,051,868
55,065
1,670,587
44,850
1,080,191
55,065
1,725,651
44,850
1,108,165
55,065
1,780,716
44,850
1,135,793
55,065
1,835,781
44,850
1,163,080
55,065
1,890,846
44,850
1,190,030
55,065
1,945,910
44,850
1,216,648
55,065
2,000,975
44,850 1
1,242,937
55,065 1
2,056,040
1,131,822 849,481 1 1,389,605 1,389,605 1 1 1,674,628 1,242,937 1 2,056,040 2,056,040
10/23/2019
g%'EHLERS
LEADERS IN PUBLIC FINANCE
Public Improvements Tax Abatement
City of Otsego, MN
44,000 sq. ft. Commercial Grocery, 70 -unit Apartments, and 32,000 sq. ft. Retail/Restaurant and office
Fiscal Disparities Election [Inside, Outside or NA] NA
Incremental or Total Fiscal Disparities
Fiscal Disparities Contribution Ratio
Fiscal Disparities Metro -Wide Tax Rate
Term of City Abatement 20
Term of County Abatement 20
Term of School District Abatement 20
School District N 728
Total Years of Abatement: 20
ASSUMPTIONS
BASE
VALUE •' •N (Original
Tax Capacity)
DistrictType:
Abatement
Current Total Local Tax Rate:
113.1980%
Pay 2019
Tax Year
Current CityTax Rate
36.060%
Pay 2019
First Year Construction or Inflation on Value
2020
Current County Tax Rate
44.273%
Pay 2019
Inflation Rate - Every Year:
0.00%
Current School District No. 728 Tax Rate
32.865%
Pay 2019
Interest Rate
3.00%
Current Other Tax Rate
Address Market Value
Market Value
Market Value
for District
State-wide Tax Rate (Comm./Ind. only used for total taxes)
42.4160%
Pay 2019
Present Value Date:
1 -Aug -20
Market Value Tax Rate (Used for total taxes)
0.19430%
Pay 2019
First Period Ending
1 -Feb -21
100%
281,400'
Pay 2020
Cashflow Assumes First Abatement
2022
PROPERTY TAX CLASSES AND CLASS RATES:
4,878
118-257-000020
Assumes Last Year of Abatement
2041
Fzemnt Clacc Rata rFvemntl
n nnoi
102,900'
Fiscal Disparities Election [Inside, Outside or NA] NA
Incremental or Total Fiscal Disparities
Fiscal Disparities Contribution Ratio
Fiscal Disparities Metro -Wide Tax Rate
Term of City Abatement 20
Term of County Abatement 20
Term of School District Abatement 20
School District N 728
Total Years of Abatement: 20
1. Base values are for pay 2020 based upon review of Wright County property website on 10.21.2019.
Prepared by Ehlers 8 Associates, Inc. - Estimates Only
BASE
VALUE •' •N (Original
Tax Capacity)
Percentage
Tax Year
Property
Current
Class
After
Land
Building
Total
Of Value Used
Original
Original
Tax
Original
After
Conversion
Map # PID Owner
Address Market Value
Market Value
Market Value
for District
Market Value
Market Value
Class
Tax Capacity
Conversion
Orig. Tax Cap. Area/Phase
118-500-221203
106,000
175,400
281,400
100%
281,400'
Pay 2020
Hmstd. Res.
2,695
C/I Pref.
4,878
118-257-000020
102,900
0
102,900
100%
102,900'
Pay 2020
C/I Pref.
1,544
C/I Pref.
1,544
118-257-000010
89,600
0
89,600
100%
89,600:
Pay 2020
C/I Pref.
1,344
C/I Pref.
1,344
118-257-001020
77,600
0
77,600
100%
77,600
Pay 2020
C/I
1,552
C/I
1,552
118-257-001010
104,400
0
104,400
100%
104,400'
Pay 2020
C/I
2,088
C/I
2,088
118-500-221205
111,000
258,900
369,900
100%
369,900
Pay 2020
Hmstd. Res.
3,660
Rental
4,624
188-500-221206
106,000
149,300
255,300
100%4
255,300
Pay 2020
1 Non-Homeste
2,553
C/I Pref.
4,356
697,500
583,600
1,281,100
1 281 100
15,435
20,385
1. Base values are for pay 2020 based upon review of Wright County property website on 10.21.2019.
Prepared by Ehlers 8 Associates, Inc. - Estimates Only
10/23/2019
g%'EHLERS
IN LEADERS IN PUBLIC FINANCE
Public Improvements Tax Abatement
City of Otsego, MN
44,000 sq. ft. Commercial Grocery, 70 -unit Apartments, and 32,000 sq. ft. Retail/Restaurant and office
Note:
1. Grocery market value is based upon estimates from the Wright County Assessor. Other value estimates based on area comps.
CALCULATIONSTAX
PROJECT•'
•N
(Project Tax Capacity)
Total
Fiscal
Local
Local
Estimated
Taxable
Market
Property
Percentage
Percentage
Percentage
Percentage
First Year
Property
Value
Market Value
Market Value
New Use
Market
Tax
Project
Completed
Completed
Completed
Completed
Full Taxes
Area/Phase
New Use
Per Sq. Ft./Unit Per Sq. Ft./Unit.
Sq. Ft./Units
Value
Class
Tax Capacity „
2020
2021
2022
2023
Payable
1
Grocery
116
116
44,000
5,100,000
C/1 Pref.
101,250
100%
100%
100%
100%
2022
1
Retail
115
115
15,494
1,781,810
C/1 Pref.
34,886
14%
14%
14%
100%
2025
1
Retail
140
140
3,000
420,000
C/1 Pref.
7,650
0°%
0%
0%
100%
2025
2
Office
120
120
10,500
1,260,000
C/1 Pref.
24,450
18%
18%
18%
100%
2025
2
Medical Office
150
1501;
8,000
1,200,000
C/I Pref.
23,250
0%
0%
0%
100%
2025
2
Apartments
80,000
80,000'1
70
5,600,000
Rental
70,000
7%
100%
100%
100%
2023
2
Retail
140
140 i1
3,000
420000
C/1 Pref.
7,650
0%
0%
0%
100%
2025
TOTAL
15,781,810
269,136
Note:
1. Grocery market value is based upon estimates from the Wright County Assessor. Other value estimates based on area comps.
1. Taxes and abatement will vary significantly from year to year depending upon values, rates, state law, fiscal disparities and other factors
which cannot be predicted.
EXCLUDEDWHAT IS FROM
Total Property Taxes 415,969
less State-wide Taxes (80,648)
less Fiscal Disp. Adj. 0
less Market Value Taxes (30,664)
Less Small Taxing Jurisdiction Taxes 0
less Base Value Taxes (23,076)
Annual Gross Maximun Tax Abatement 281,581
Prepared by Ehlers & Associates, Inc. - Estimates Only
CALCULATIONSTAX
Total
Fiscal
Local
Local
Fiscal
State-wide
Market
Tax
Disparities
Tax
Property
Disparities
Property
Value
Total
Taxes Per
New Use
Capacity
Tax Capacity
Capacity
Taxes
Taxes
Taxes
Taxes
Taxes
Sq. Ft./Unit
Grocery
101,250
0
101,250
114,613
0
42,310
9,909
166 832
3.79
Retail
34,886
0
34,886
39,490
0
14,161
3,462
57,114
3.69
Retail
7,650
0
7,650
8,660
0
2,609
816
12,084
4.03
Office
24,450
0
24,450
27,677
0
9,734
2,448
39,860
3.80
Medical Office
23,250
0
23,250
26,319
0
9,225
2,332
37,876
4.73
Apartments
70,000
0
70,000
79,239
0
0
10,881
90,119
1,287.42
Retail
Z650
0
7,650
8,660
0
2,609
816
12 084
4.03
TOTAL
269,136
6
269,136
304,657
0
80,648 w
30,664
415969
1. Taxes and abatement will vary significantly from year to year depending upon values, rates, state law, fiscal disparities and other factors
which cannot be predicted.
EXCLUDEDWHAT IS FROM
Total Property Taxes 415,969
less State-wide Taxes (80,648)
less Fiscal Disp. Adj. 0
less Market Value Taxes (30,664)
Less Small Taxing Jurisdiction Taxes 0
less Base Value Taxes (23,076)
Annual Gross Maximun Tax Abatement 281,581
Prepared by Ehlers & Associates, Inc. - Estimates Only
llllooFREERS
LEADERS IN PUBLIC FINANCE
Tax Abatement Hearing
�� i III IIr-
III IIIA IIIA �w .......... �IIIIII Illm III IIIIII�III .
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1,21 1 111
• iiroposed I bx Abatement Area
• iiroposed I bx Abatement iii iii iii iii iii
• iintial Wright Countyiir"viii iii viii iii
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I he iii iii ii l in iii
abilityto �� iir ii�� utilize iii iiit„ n piropeirty,tax
it iii --firoiirn iii r exis-fling developirneint
t iir a urs iii iii IIS III iii viii(Couir"ity or School) cairi choose , IIS ii iii iii IIS t
Authorized by iii iii iii t Statutes 4..6„ 1812 ,t „ 1815
Used -to viii iii iii public „
�� iii iin�,,,,iir -tiir -tiir ,,,, iii iii -t„ ,� ii�� iir ii��
iir in r business iir ,� iii -viii iii ,. or it relieve -tax buirdein
0 Up -to 20 r hhimit on an abaterneint
Aininual I,,,,,, Abatement
himited -to gireateir of 10% of Net I bx Capacity, or $200k
,
City's iir iiit is r $2 imillioin
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0 III Ili III
Ili Ili III i Ililll Ilii --for 'ti tIlii nit
III ublic Notice iir uider"i-fify theIl iir IIS iir IIS -taxes aire deirivedfiroirn airid
ihiriclude a total uriot to exceed aimouir"it
No l iir IIS iir uri iir uri urit required
[:::-oinimal appirovalin Abaterneint °" 'V III in coinsideired by eachi
Iirnuinicipality's goveiriniiingi
,,, "'III Ilii i B it i ,� Ilii Ilii' Ilii t Ilii int 't that III Ilii iii'
exceeds the
,,,, iii iin iir „ iii
t ii int ii ,,,, it in ,,,„
1 hiricirease or Iliir iir -tax IIS ,-
III irovide eimploymeiritII II ii urs iii -viii iii iiri IIS iiit ,-
III irovide or Ihelp acquire/coiristiruct public f viii III iii iii ,-
„„ III lelp redevelop or reiriew blighted iir ,-
III lelp Iliir viii iiriii --for iiit iir iii urit,-
6. l::::::::Jiriairice or pirovide public iii rifirastiructu ire .......or
.......!�r
7 III hase ii uri Il iir IIS iir -tax hiricireases or equalize -tax reveirmes --for iir iii uri
types of piropeifty„
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IM, "OMMIly-411
• Seven parcels in the process of being
platted / anticipated for development
• 1,,Ihased deveIII qpirneirit:
Giroceiry airichoir (2020 staiiq)
1::Reqiii ires 1pubIiii c stireet airid uiii III ity
iii urs piroveurn eirits -to seirviiice airea
III u -t u it III:::: IIS
70 uirflt qpaiftirneirit Il ii
Kix of surra aIII III ofiii ce/iretaiii III IIpads
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,,,,,, ii iii ,, hase I,,,,,, ,, iii till iii t ............... Giroceiry ainchoir oinly
$5,996,8001 115,214
Gross Taxes
Abatement Eligible
SchoolCity County
Portion Portion
36.0600% 44.2730% 32.8650%
$41,546 $51,009 $37,865
0.1943%
$9,909
Represents.- 5 ......,,,,,, growth in local tax capacity;
55growth in local taxes
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42.4160%
$42,310 1$182,639
,,,,:: t it ,, hases I,,,,,, ,, iii till iii t ............... Giroceiry plus apairfirnein't
aind cornirneirdali
$15,781,8101 269,136
Gross Taxes
Abatement Eligible
SchoolCity County
Portion Portion
36.0600% 44.2730% 32.8650%
$97,051 1 $119,155 $88,452
0.1943%
$30,664
Represents.- 1, ......,,,,,, 14x growth in local tax capacil y
132growth in local taxes
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42.4160%
$80,648 1$415,969
0 ���Ioteiintial Citypublic iii iii fiir tier t ire costs'.."
$871,171 cru iiriir urit es-firnate, subject -to chairige
0 Up " I�" Ir int hinvestimeint III Ilii2020
Aimouirit IS it -i -viii III IIIy r6hirnbuirsed firorn fu iir -tax IIS t u urit ir ire
0 Seek pairtineirship with Wiright County ,t help funding
I[Reduce risk of city's iir iii urs Ilb a iir urn uri- --� acceleirate ir IIS a urit
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All li 1111
0 Count ;;;;; iir ,t t ,,,,,,I,,,,,, tii iii t ,, iii learing November 1't'i'
,,,,, erimscoopeira,,,,,,I,,,,,, Abatement iir iii int„
City ,,, a iii r iii int
II::::::::'uiirid airidiiri tiirut public iii iii rifirastiructu ire „ stireetiii iir Il iir a iiri
City uses its futuire abateirneiritiir urs , r6hirnbuirse itself
it ,,, iii r iii iii t
III irovide III t iir of ciredit or otheir secuirity -to cover stireet
Count,,,,O Note r6himbuirses up ,t $400,000 of city costs
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