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HomeMy WebLinkAboutSt Croix Mall Revised TIF Projections - 1991/1992 #TATGES, FR, EDPATH & C0., LTD. CERTIFIED PUBLIC ACCOUNTANTS May 21, 1992 To the Honorable Mayor and Members of the City Council City of Oak Park Heights 14168 North 57th Street Stillwater, MN 55082 RE: ST. CROIX MALI, - REVISED TIF PROJECTIONS - 1991/1992 Attached herewith are the following schedules projecting the TIF calculations and Developer assistance for the St. Croix Mall - TIF Agreement based upon current (1992) data: Exhibit A - Computations of total tax allocations (county basis) including City TIF monies based upon an $8,410,300 final project value and based upon zero inflationary gmwth of taxable valuations. Exhibit B - Computations of developer assistance based upon an $8,410,300 final project value and based upon Z= inflationary gmth of taxable valuations. The attached TIF computations for 1991 /1992 UAin reflect a reduction from prior projections. This year's reductions is (again) the direct result of State changes to the tax capacity ratio for industrial/commercial property. The 1990/91 ratio was 4.95 %. The 1991/92 ratio is 4.75 %u representing another 4% decrease. 'nF property taxes total $232,077 for 1991/92 and will be "shared" as follows: Allocation Amount Percent "Lost TIF" $40,627 17.5% Developer (60%) 114,870 49.5% City (40%) 76,580 33.0% 1WAL $232,077 100,0% 4810 White Bear Parkway - White Bear Lake, Minnesota 55110 - 612/426 -7000 - FAX /426 -5004 To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 21, 1991 Page 2 When the City Council approved this TIF Agreement in 1989, it was anticipated that payments to the Developer would total $960,000 over seven and one -half years 1d that the City would retain approximately $755,000 over eight years to be used to finance other City projects. Since that time, numerous changes have occurred such that current projections anticipate total payments to the Developer of approximately $695,000 and City TIF revenue of approximately $464,000. The reduced amounts are the direct result of the following: 1. The economic adjustment factor for the TIF District was originally estimated at 1.91% per year based upon preliminary estimates by the Developer and County. The actual economic adjustment factor for this TIF District is 5.7858 %. Accordingly, more tax base is being retained for regular taxes instead of incremental taxes. 2. The original estimates anticipated annual inflationary increases of 2%,Ifta completion of the incremental construction. Current economic conditions are such that the attached projections reflect zero inflationary growth. 3. Each year since 1988/89, the State has reduced the tax capacity ratios for industrial/commercial property as follows: TOTAL Comm./Indust. Class Ratios: 1988/89 1989/90 1990/'91 1991/92 CHANGE First $100,000 3.30% 3.30% 3.20% 3.10% - 0.20% Balance 5.25% 5.06% 4.95% 4.75% - 0.50% Percent Change: First $100,000 0.0% -3.0% -3.1% -6.1% Balance -3.6% -2.2% -4.0% -9.5% Current TIF projections have been reduced substantially from the original estimates for both the Developer and the City and are summarized as follows: Year Developer City 1991 - Actual $30,908 $21,414 1992 - Actual 114,870 76,580 1993 -Est. 108,800 72,500 1994 -Est. 102,400 68,300 1995 -Est. 95,600 63,700 1996 -Est. 88,400 58,900 1997 -Est. 80,800 53,900 1998 -Est. 72,800 48,500 TOTALS $694,578 $463,794 To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 21, 1991 Page 3 CITY TIF COMMITMENTS In conjunction with the developer project, the City partially committed its TIF revenue to finance a street re- alignment project at 58th Street and Osgood Avenue. The primary purpose of this project was to improve traffic flows and patterns. A summary of construction costs at December 31, 1991 plus estimated final costs is as follows: Construction Estimated Costs Completed Description @ 12/31/91 Project Contractor $108,175 $110,000 Engineering 21,766 24,200 Ocher 9,399 10,200 Total Actual/Estimated $139,340 $144,400 Projected Interest 25,600 Projected Total $170,000 The City's financing plan for this project calls for 100% City TIF financing. Accordingly, the City has already committed its 1991 through 1993 TIF revenues to this project. Thereafter, the City can expect to have the following amounts available to finance other City TIF projects: Year Amount Accumulative 1994 $68,300 $68,300 1995 63,700 132,000 1996 58,900 190,900 1997 53,900 244,800 1998 48,500 293,300 As shown above, h= City TIF revenue will not be available until 1994. Additionally, these amounts are limited -- averaging only approximately $58,000 per year for five years. To the Honorable Mayor and Members of the City Council City of Oak Park Heights May 21, 1991 Page 4 DEVELOPER TIF The City's final committment to the Developer of this project generally called for the Developer to receive 60% of the additional or incremental taxes generated by this project with a maximum amount of $960,000 to be paid over the term of this TIF District. Tax Increment Financing has been the subject of various State Statutes over the past several years, most of which has limited TIF revenue and/or uses of TIF revenue (especially additional or excess TIF revenue). Accordingly, a formula was devised to guard against future State Statute changes and to insure substantial compliance with the intent of the City Council. The City's Agreement with the Developer calls for the City to remit Developer TIF revenues within 30 days of the actual receipt of such monies. The City will be receiving these monies (both Developer TIF and City TIF) as part of its normal tax settlement each June and December. However, the City usually does not receive the detailed allocations (of its overall tax settlement) until sometime after the monies are received. Accordingly, it may not be possible for the City to remit these monies within 30 days of receipt We recommend that the City remit such monies as soon as possible after receipt of all required information. The attached schedules include projected computations of Developer TIF for the full term of this TIP District, including actual computations for 1991 and 1992. Assuming full and prompt payment of the 1992 property tax by the Developer, the City should receive TIF tax settlements of $95,725 (each) in June and December. When this occurs, the City should remit $57,435 (or 60% of each amount) to the Developer. We will be available to discuss this report and other matters with the City Council at a later date. Respectfully submitted, TAUTGES, REDPATH & CO., LTD. G� Robert J. Voto, CPA cc: Mark Veirling Dan Wilson LaVonne Wilson Judy Holst TIF File Attachments CITY OF OAK PARK HEIGHTS MALL92A:q.S T. I. F. PROJECTIONS -ST. CROIX MALL EXHIBIT A ( BASED UPON ZERO GROWTH AFTER 199111992.1 TAX ALLOCATION - COUNTY BASIS TAX CITY/ CITY / TAX COLL FAIR MARKET VALUE TAX CAPACITY VALUE TAX TOTAL CTY. DEVEL LOST FISCAL COLL. YEAR BASE INCR. TOTAL BASE INCR. TOTAL RATE TAX SCH. T.1. F. T.1. F. DISP. TOTAL YEAR 1989 3,410,300 0 3,410,300 177,092 177,092 0.92031 164,136 ACTUAL 148,824 0 0 15,312 164,136 1989 1990 3,607,613 - 126,713 3,480,900 180,683 -6,309 174,374 0.90383 160,304 ACTUAL 140,408 0 0 19,896 160,304 1990 1991 3,816,342 1,144,358 4,960,700 186,952 56,853 243,805 1.06784 259,655 ACTUAL 159,031 5 2,32 2 8,388 39,914 259,655 1991 1992 4,012,630 4,397,670 8,410,300 189,813 208,026 397,839 1.11561 446,274 ACTUAL 152,147 191,450 40,627 62,050 448,274 1992 1993 4,244,793 4,165,507 8,410,300 200,195 197,044 397,839 1.11561 443,833 EST. 164,399 181,342 38,483 59,610 443,834 1993 1994 4,490,388 3,919,912 8,410,300 212,413 185,426 397,839 1.11561 443,833 EST. 177 170,649 36,214 59,610 443,833 1994 1995 4,750,193 3,660,107 8,410,300 224,703 173,136 397,839 1.11561 443,833 EST. 191 159,339 33,813 59,610 443,833 1995 1996 5,025,030 3,385, ?70 8,410,300 237,704 160,135 397,839 1.11561 443,833 EST. 205,575 147,374 31,274 59,61) 443,833 1996 1997 5,315,768 3,094532 8,410,300 251,457 146,382 397,839 1.11561 44q,833 EST. 220,918 134,717 28,588 59,610 443,833 1997 1998 5,623 328 2,786,972 $ 410 300 266,006 131,833 397,839 1.11561 443,833 EST. 237,149 121321 25,747 59,610 443,833 1998 r TOTALS- 1991 -1998 ONLY 3,368,927 1,507,650 1,158,520 243,134 459,624 3,368,928 NOTES: INITIAL BASE VALUE EQUALS THE 1988189 REAL ESTATE TAX VALUE AS FOLLOWS: BLK 21 LOT 1 1,140,100 PARKR -IG / MALL EXPANSION 61402 -2150 BLK 2 / LOT 2 1,654,700 MAIN MALL 61402 -2200 BLY, 2 /LOT 3 438,600 MALL /MALL EXPANSION 61402 -2250 BLK 2 / LOT 4 26,600 MALL/ MALL EXPANSION 61402 -2300 BLK 21 LOT 5 150,300 MALL- THEATER 61402 -2350 TOTAL MKT. VALUE 3,410,300 TOTAL MARKET VALUE GROWS TO SET AMOUNT AT 1992 WITH 0'./ ANNUAL INCREASES THEREAFTER- ANNUAL ECONOMIC ADJUSTMENT FACTOR (APPLIED TO BASE I PER WASHINGTON COUNTY 0.057856 LOST T. I. F. REPRESENTS T. I. F. TAXES IN EXCESS OF 1989 TAX CAPACITY RATE OF .92031 MALL92C.XLS CITY OF OAK PARK HEIGHTS T.1. F. PROJECTIONS -ST. CROIX MALL EXHIBIT B (BASED UPON ZERO GROWTH AFTER 1991/1992.) TAX FAIR MARKET VALUES TAX TOTAL TAX NET DEYEL COLL ADJUST. TAX INCR. PROP. INCR. LOST INCR. T I F NET T.1. F. ALLOCATION PERC. PERC. YEAR TOTAL BASE INCRE. FACTOR TAX TAX T I F TAX 0 60% , DEYEL. CITY TOTAL DEYEL CITY 1989 3,410,300 3,410,300 0 0.000000 1990 3,480,900 3,607,613 - 126,713 - 0.036402 1991 4,960,700 3,816,342 1,144,358 0.230685 259,655 60,710 8,388 52,322 30,908 30,908 21,414 52,322 59.1% 40.9% 1992 8,410,300 4,012,630 4,397,670 0.522891 446,274 232,077 40,627 191,450 114 870 114,870 76,580 191,450 60.0% 40.0% 1993 8,410,300 4,244,793 4,165,507 0.495286 443,833 219,824 38,483 181,341 108,805 108,805 72,536 181,341 60.0% 40.0% 1994 8,410,300 4,490,388 3,919,912 0.466085 443,833 206,864 36,214 170,650 102,390 102,390 68,260 170,650 60.0% 40.0/ 1995 8,410,300 4,750,193 3,660,107 0.435193 443,833 193,153 33,813 159,340 95,604 95,604 63,736 159,340 60.0% 40.0% 1996 8,410,300 5,025,030 3,385,270 0A02515 443,831 178,649 31,274 14 ?,375 83,425 88,425 58,950 14 ?,375 60.0'7 40.0% 1997 8,410,300 5,315,768 3,094,532 0.367945 443,833 163,306 28,588 134,718 80,831 80,831 53,687 134,718 60.01 40.0% 1998 8 5,623,328 2,786,972 0.331376 443,833 147,076 25,747 121,329 72,797 72,797 48,532 121,329 60.0% 40.0% 3,368,927 1,401,659 24.1,134 1,158,525 694,630 694,630 463,895 1,158,525 60.0% 40,0% NOTE: THE ANNUAL ECONOMIC INDEX FACTOR HAS BEEN CHANGED FROM 1.91 % TO 5.7858 % IN ACCORDANCE WITH THE FINAL CERTIFICATION RECEIVED FROM THE WASHINGTON COUNTY ASSESSORS OFFICE NOVEMBER 27, 1989.