ITEM 3 History of financial assistanceCity of Otsego
History of Financial Assistance
• Apex Warehouse:
o Tax Abatement
o Approved in 1998
o Assistance of $69,082.50
o Assistance equals 3.75% of estimated market value
o Payment of 30% of City share of tax
• Long Haul Trucking:
o Tax Abatement
o Approved in 1998
o Assistance of $20,824.53
o Seven years duration
• Gateway North (Duke):
o Tax Abatement
o Master agreement approved in 2005
■ First Tax Abatement agreement approved in 2007
■ Second Tax Abatement agreement approved in 2014
o Assistance of $500,000
o Estimated property valuation at build out of 75,000,000 to 90,000,000
o Assistance will equal less than 1% of estimated market value
• Boondox:
o Tax Abatement
o Approved in 2012
o Assistance of $10,600
o Property improvements of $189,100
o Assistance equals 5.6% of initial improvements (per property tax statement)
• Family Speech and Therapy Services:
o Tax Abatement
o Approved in 2013
o Assistance of $25,000
o Property valuation increase of $360,300
o Assistance equals 6.9% of estimated market value. (Building would have continued to
lose value without this redevelopment.)
Otsego Apartments LLC TIF Application
City Incentive Options
July 27, 2015
The City Council has sole discretion in determining if a TIF eligible project will receive TIF assistance and
the amount of assistance that will be provided, if any.
Below are options for the Council to consider in response to the Otsego Apartments LLC TIF application.
The options range from providing no assistance to providing the full 26 years requested. All options are
pay as you go. The options below are listed in no particular order.
1. Deny the request for assistance based on City Council policy direction that ranked non -senior,
low-income housing as a low priority ineligible for City TIF assistance.
2. Grant the request in full: fund 26 years of assistance as requested in the application totaling
approximately $6.4M over the life of the district. This would not comply with Council policy
direction that ranked non -senior, low-income housing as a low priority ineligible for City TIF
assistance.
3. Grant assistance for "extraordinary" site development costs. The "extraordinary" site costs
consist of costs that would not be incurred if the same project were constructed on another
site. The "extraordinary" costs for this project would be determined by the Council and could
include the following:
a. County Road improvements —This would not comply with Council policy direction that
County Road improvements could be funded only if the project was a high priority
project under the City's policy.
b. Costs related to removal of the wastewater treatment plant
This would not comply with Council policy direction that ranked non -senior, low-income
housing as a low priority ineligible for City TIF assistance.
4. Follow past practice and provide assistance based on a percentage of the increased market
value or construction cost of the project. This would not comply with Council policy direction
that ranked non -senior, low-income housing as a low priority ineligible for City TIF assistance.
5. Grant a specific number of years of assistance set at the Council's discretion. This would not
comply with Council policy direction that ranked non -senior, low-income housing as a low
priority ineligible for City TIF assistance.
6. Grant a maximum dollar amount of assistance set at the Council's discretion. This would not
comply with Council policy direction that ranked non -senior, low-income housing as a low
priority ineligible for City TIF assistance.
7. Grant request excluding specific items such as:
a. Land purchase
b. Soft costs
c. Other at discretion of Council
This would not comply with Council policy direction that ranked non -senior, low-income housing
as a low priority ineligible for City TIF assistance.
8. Deny request and consider other types of assistance:
a. Assess SAC payment
b. Tax Abatement
ESTIMATE OF TIF QUALIFYING IMPROVEMENTS
HOUSING TIF DISTRICT
City of Otsego
160 Unit Apartment Development
Phase 1: 80 Units, Landscaped Community Patio, Apartment Garage/Storage area and site correction work for both phases
Phase 2: 80 Units
Apartment Development Cost Estimates PHASE 1 PHASE 2 Infrastructure and Extraordinary Expenses
Land
1,920,000
1,124,348
Site Work
Demolition/Site Correction (Fehn)
110,273
110,273
Grading/Backfilling/Compaction
225,000
200,000
Wastewater Treatment Plant Removal (Fehn)
59,962
59,962
Paving - cost of base for parking lot and drives
150,000
130,000
280,000
Site Road Improvement
340,798
340,798
Utility Hook-up (SAC)
706,000
706,000
1,412,000
Utility Hook-up (WAC)
256,000
256,000
512,000
Traffic Control - Lights/Signs
265,065
265,065
Relocation Expense
-
Public Right -of -Way Costs
Lighting
Signage
-
Curbs and Driveway Aprons (Ca Rd 42)
90,880
90,880
Sidewalks
10,000
10,000
20,000
Boulevards
-
Berms
30,000
30,000
Landscaping
75,000
50,000
Interest Cost During Construction Period
100,000
100,000
for eligible expenses
Appraisal
15,000
15,000
Survey
20,000
Administrative Costs
Construction Supervision
160,000
160,000
Contractor's Fees
-
Inspection Fees
-
overhead
Environmental Costs
Assessment
-
Work Program
-
Abatement/Clean-up
-
Consultant's Fees
Architectural/Design
360,000
300,000
Civil Engineering
110,570
110,570
Development Consultant (INH Properties)
120,000
120,000
Financial Consulting (Maxfield Study)
22,000
Traffic Study (Spack)
5,271
5,271
Legal/Bond/TIF Counsel
125,000
25,000
150,000
City Assessments
TIF Application Fee
5,000
5,000
Storm Water
-
Streets
-
Park Dedication Fees
269,600
269,600
539,200
Contingency for Eligible Costs
200,000
100,000
-
Totals
5,751,419
2,471,600
TOTAL PHASE 1 and 2 Costs Eligible for TIF
8,223,019
5,025,367
Riverbend Hook up fee