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Home My WebLink About07-27-10 EDA Packet City of Oak Park Heights Economic Development Authority Date: Tuesday, July 27, 2010 Location: Oak Park Heights City Hall Time: immediately following the conclusion of the July 27, 2010 City Council Meeting . AGENDA: 1. Approve Agenda 2. Approve Meeting Minutes from May 25, 2010 3. Review final Report iron) Northland Strategies 4, Adjourn Page 1 of 20 This Page Is Left ]Intentionally Blank. Page 2 of 20 i i - 0 y - 'i lay yi y, tt 'S M T , -- , b x q 4 ' - tP 77 g �- r. e� w i f5cn1L��zg' .a ^` s v r�� 9c ��:• asp .� �� .�s� �� I' a. I' h 7 .... .' ..}`, A7 7 5 �E I! m _ a �� .�, t ,rf: �- � - - - w, W 1,� Y � � sir £: a � ,. .. .� .I j i k f � t `- I s - ^�+ 9 3� ?s saS !� v4 .�� ,,, 3 � �£ �� „`F k � �, � , �.,. r ' "'v .� �; �_ ;E � e �� r "" t �:I A �� f i i s a r € AWW f Lt *!mot owvw00 Aw F � y.. t A ... ............... ............... ..... AMW �10 - 01-0 dew VRMFRM . . . . . . . . . . . . . . Page 7 of 20 M lw -�WIWW WO-FWIWA- WWI . . . . . . . . . . . . . . . . . Fi Report Audcmlopnxn//9h/n/blX1�njc/ July 22, 2010 P«J'7 ��`�� . .... ..... ` .... `� Tool Box The City of Oak Park Heights and its DD/\ have the ability to use n variety of finance tools to facilitate the redevelopment of proporty, The [oDovving xuohon highlights the most relevant of these tools, Tax Increment Financing Tax i000xncnthoandng('7lF) )n [Ile most widely used finance too] for /rdepu)oprocnt In simplest hernos,'7H xUovvs the City ho capture the. local property taxes from new dcve)upcucot and use those monies to mukc the Heve)opmeot hcoyiNc The use ofTIy is governed by a complex set of statutes (Minnesota Statutes Sections 469]75 t 469.l799, the ^Tly/\ct''). ltiunot practical to provide a complete explanation of the intricacies of'I'll'in this nlernorandull), Instead, [his sec- tion ]d�hl��l�tuthe�cya�000�n�'IlF for rpdcve|opnocntin(}nk Park }Icightu. Common Factors There a several different types o[TIF dist that may be used f redevelopment projects, oevem\mmmon facNm apply to III Jiobids. Base Value: /\TIF district does not capture all property value from uparcel, The capiuoeonlyoo curs on the growth in property value. &hvsc value (original tax capacity value) will be set when the district is established (coliUed by the County). Thix vu|oa rep/raontn Uhucur/cot vabohmn of parcels in doe'DF district. In u redevelopment Project, this has* vu|oc often indud*x the vu}uc hmn existing buildings. lf these 6oUdin5a are dnnmlixhed, then dhe ner/ deve|opmontmnot first replace this value before generating tax increment. Administrative Expense: 'File TIF Act allows the City to spend a portion oil Wx increment revenucs oil eligible udnnioixtrmtivcexpense. Tbeae expenses include actual staff time and consultant costs incu rred in the creation and ronoogcmeniofTlF districts. /\droinlybohvr expense ouay not ex- ceed the lesmer1OY6ofthe total estimated tax increment expenditures authorized by th,TD� plan or MY., of the total tax inc f the district (excluding any excess taxea under 469.177). Pooling: Pooling is the ability to spend ta incre.31jents outside. of the'j'[Fdistrict. Redevelopment districts a Subject tum 25'Volirnitohmn. The limit for all othmrl7F dist (]2E8and 10) is 20'X). (There onz special r1.11eo that apply to pooling from housing 'I'll' district and 6nou auy ]]F district iop,onuohx eligible housing pr jecto.) The pooling limit in calculated based oil total revenue de- rived f bz inc Administrative expense applies tothis restriction. The omountHhxl ounbompentovMideo{Lbc]]�dioUic|isnpto[adoninistrohvcrspeonu 2010dhongeuinStaLeLo* nDov/ for temporary, broad pooling of tax iocrcnnontfondu io ndnou|ah: construction. /\ descrip- tion uftbionuthorityappearsonpu8uV. F/xo'YeurRu/c The five-year rule iy one uf the noostinoportant7lF management limitations. In simple hernus, ihoCity box fivcyeam {rnoo the date the district iacertified to spend or obligate tax <ncrerneots, After this tirne period pasws, tax increments can only be spent oil prior obligations, on administrative expense, or on authorized cxpeoditoxes 8'atcunop|y With ynofing resbicOons. The pooling restrictions apply regardless ofvvIletber the tax iocn:rnnnta are spent inside or out side of the TIF district. To avoid restriction under the five-year rule, one ofthe (nl]up/in8 actions must take place within Page no,00 Yimd Report - Redd c>loptttetti I'lnttnirt Ptnjecl jO y 22, 2010 Nwe 8 five. years of certification of the district: 1. Revenues are actually paid to a third party with respect to the activity. 2. Bonds used to finance eligible activities are issued and sold to a third part}. The proceeds of the bonds must be reasonably expected to be spent before the end of the later of (i) the five -year period, or (ii) a reasonable temporary period within the mea3aing of the use of that term under section 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve or replacement fund. 3. Binding contracts with a third party are entered into for performance of the activity before or within five years rafter certification of the district and the revenues are spesat Under the con tractual obligation. 4. Costs with respect to the activity are paid before or within five years rafter certification of the district and the revenues are spent to reimburse: a Marty for pay eiit of the costs, including; interest on unreimbursed costs. 5. EApenditures Liw for special housing and infrastructure purposes authorized by State Law. Eligible Uses: There is no statutorily defined list of TIF eligible- expenditures. Uses are often de-. fined by the type of ` iF district. Typical uses of `1'IF include: Land acquisition and cost write- downs. Demolition and clearance of existing strucfiures. ® Correction of site contamination. ® Public improvements. o Parking facilities and other site improvements. Financing: There are several ways to financing redevelopment projects with TIE The most common approach is called "pav -as- you --go ", In this approach, tile: City uses tax incre- ments to reimburse they developer for specific project Costs. The City assumes no risk because payment oc.cur's only if adequate tax increment revenues area collected. A pay- as- yor.r -go approach may be based on a "rlr note that also pays irlterest in recognition that the developer must finance the project costs. Cities can use legally available reserves to make internal loans that finance the project costs. The loan is repaid with tax increments. The City assumes the risk that adequate tax increment rev - cnues are received over the life of [lie loan. Cities often use. assessment agreements that set mini - mum property values and developer shortfalls guarantees to mitigate this risk. The TIF Act authorizes cities to issue bonds to finance TIF eligible activities. These bonds may be general obligations of the City if 20°, or more of the revenues needed to pay debt service come from tax increment. If less than 100'% of the debt is supported by tax increments, the City earl use any other legally available revenues, including general property taxes, to support the bonds. The same risk factors discussed with internal loans apply to bonds. Temporary Use to Stimulate Construction: Now State Law (Laws 2010 Chapter 216 /I I.I. 2695 -- °2070 Amendments ") contains several important changes related to the use of tax increment fi- Page 10 of 20 1- K»daekpn/m// Planni fnjrc /oly22,20]0 page __--___-_- ------ ........ .... ... . ... ..... ..... ...... .... ---�_ uancing(T]F). One of these Changes expands the ability to use tax increments in existing districts. 'File 2010 Amencinlents contain a broad, but temporary autho to USCTIF Wshmu|atccoo- aLructioo. Prior to December 31, 2011, this new authority to spend tax increments may be Used to: ' m Provide improvements, loans, interest mtnnvbaidims, or assistance in any form to private de- velopment consisting of the construction or substantial rehabilitation of buildings and ancil- lary facilities, if doing so \vill Create or retain jobs in this state, including construction jobs, and thxtHheconsirucbu000n000cncrobr}onu]oly1,2U|1,onJvvuuldnoihuveuonocorour that date wiUhout the assistance. ° Make an equity or similar investment ill a corporition, pai-tnership, or limited liability com- Pany that H/e un[hority determines in necessary to make construction of development that meets the requirements of financial feasibility stated above. This temporary authority uUovva tux inoxrnueob froro any dis1ridiobc "Pent to facilitate all) typo o/ development without regard to general roaidcbooy on 1ly diut6c|S, sucb oa poo]inO und Hhc five-year nUo. '|'his uoHhori(y does not supersede the requirement to pay bonds <owhich tile in- crements ura pledged and the provisions o/MS. Sechoo 409]76^ Eh/bd. 4g (prohibition of general govmn1ncntuxo) and M£ Section 469.)76 County com|e). A critical limitation in the authority is tile requirei that the aUt'llority to spend tax increments oudcrihiu subdivision expires Deceinber 31, 201E The requirement: ho make expenJikUreaby December 31 places tile ionpeh/o oil fund balance and InvnMIex collected io2OYU and 2O1l. Bonds and other long-term obligations may not hePossible. A "written spending plan" approved by the municip(ility after a public hearing is requi to Use thixunt)'ority. This Provision appears tobeo substitute for o'TlF plan and the general require- ments for contents and amendment cfthrllFylun. Redevelopment Districts Duration 25 years hnm receipt of first iom'crnont 26 years ofactual revenue.- Criteria toestablish Built cnvtroonueut puro,lx consisting of70'%o/ the area of the district are occupied by buildings, st Utilities, paved or gravel parking lots, or other similar structures. Aparcel is considered ''occopied^ if '15'Yo or mo of the area of the parcel contains buildings, st utilities, paved or gravel parking lots, or other similar structures. StructoroUy oobxtandard bui{dioGo — Morr than 50% of the buildings are structurally substan- dard na defined by tile ototutc. Dist ofconditiono — 'mnun conditions must hr "reasonably distributed" throughout the district. Contiguous Parcels --A redevelopment district may be Made LIP of non-contiguous parcels except that each group o/ contiguous parcels must meet the ubovecbt,rio. Page 11 of 20 Final Report - RedevelopmeW Planning Projed ]if ly 22, 201 Page 10 — ---------- - - .. ..... .......................... ...... ............ .. . Limits on Use At least 90% of the tax increment must be used to finance the cost Of correcting conditions that allow designation of the district. These costs include, but are not limited to, acqUil'ilIg properties, acqUil'illg adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of stJ Clei)IIJIg Of they 1,111d, the removal of hazardous sub- stances or remediation necessary to development of the land, and installation Of utilities, roads, sideN�7,jlks, and parking facilities for the site, Renewal and Renovation Districts Duration 15 years from receipt of first increment, 16 years of actual revenue. Criteria to establish Built environment Same as redevelopment district. Building condition 20%,structurally substandard (reclevelopnlent district test) and 30'X of offier buildings requi)v substantial renovation Or clearance to remove existing conditions such as: in- adequate street layout, incompatible uses or land use relationships, overcrowding of buildings on the land, excessive dWCJli3lI' unit density, obsolete buildings not suitable for improvement or conversion, or other identified hazards to the health, safety, and general well-being Of the com- munity; and Distribution of conditions ---Theso conditions must be "reasonably distributed" throughout tile district. Limits on Use Santee as redevelopment district. Economic Development Districts Duration 8 years from receipt of first increment, 9 years of actual revellue Criteria to establish Under �,),eneral law, an economic development district can only be used for "industrial type" do- velopment, such as manufacturii1g, Wal research & development, and telemarketing. In 2010, the State I.CgklaftUe passed a temporary expansion of the use of economic development districts. An economic development district can be created for any project that the municipality finds will "create or retain jobs in this state, including COJIStl jobs, and that construction of the project would not have conimcnicecl before July 1, 201 WithOLIt the authority providing as- sistance" with the TIF district. An economic development district can now be used to facilitate any type of developnicrit without regard to the existing use limitations. There are two important tuning restrictions associated with the expanded Use of economic devel- opnicilt districts: Const of the Project in the TIF district begins no later than July 1, 20 Page 12 of 20 Fim/Rqo,/ Xulen6upnoo//1 /Oy%2,2Vl0 yoye 1] � �� ... �� » Request for certification o{ the district io Made no|xterGhmm]noe3l2O|1 Compact Development Districts Duration 25 years froru receipt of first inurement, 26 years, of actual revenue. Criteria toestablish ExiodnDcmnuoe/do} development Parcels consisting n/70% of the area of the district are oc- cupied by buildings or oiooUproh that are classified is Class 3u property under srrhou 273,13, subdivision 24 (commercial and industrial property and utility rco\ and personal yuop eriy). While tile statutory criteria for a redevelopmcntTIF district define tile means for detennin- ing it: a pa is "occupied", noSLICh language is in the 2010 Amendments, 'The House Research bill eoonnnury includes the reference to the existing \«ot applicable in u redevelopment district. 'l]'io likely noeanu that u parcel will be deemed as occoPied if at least 15'Yo of tbe area of porrd busbuUdbl8u. Increased density of commer development Manned n.deve\opcocoL or development of tile district when completed, will inmrnsrHhe total sqoum kxoLu8o of6ui|Jin8x, classified as Class 3u underorcbon 273.13, subdivision 24, occupying the district by three times or more nzlobvc to the square footage of shnilar buildings OCCUPYIng the dist When tile resolution \vas approved. 7heseOndio8snnn��bocoadrbvr**ou�on 7lx �UlO/\nncndnorn{��ono(Provideo[her,rqoi,r- wrnto for making these finding Limits onUse The 2010 Amendments contain specific limitations oil tile use of Compact Development Districts. Tax inc frono these districts may only be used hmpay: • /\Jmioistrative expenses (subject to overall limits u( tile I)l • Cost of acquiring land located in the district or abutting the bOLIndary of the district. • Demolition and removal of buildings or other improvenuuntyaud other site preparation costs for |uudo located in the district orabutting the boundary of tile dinbici • h`shu|ln6om mf public inbnsbuctu,ror public improvements serving the dist buioxclud- hn8 tbe costs ofstreets, roods, highways, parking, o, other public improvements primarily 8pmiSneJ to serve private passenger ronbnrvehicles. The autho to establish or approve the tax inc financing plan for i new Conlpact Devel- opment District expires oil June 30, 2012. Page 1oo,00 Final Repw-1 - Redez Planiling Project jOy 22, 2010 Page 12 — ---------- - Tax Abatement Tax abatement acts like a simpler and less powerful version of tax increment financing. With TIP, the City Controls the entire property tax revenue from new development. Under the abatement statute, the city; county and school district have independent authority to grant abatement. The term "abatement" is actually misleading. Abatement suggests that the taxes will be waived. In reality, the statute allows local governments to levy an additional property tax. The calculation of the allowable levy is based on the determination of an amount of abated tax. Abatement in Minnesota works more like a rebate than abatement. The city (and other units abating taxes) adds, a tax levy equal to the. amount of taxes to be abated. The revenue from the abatement levy can be IVU13'110d to the property oNvner or retained and used to finance develop- nlent activities. Tax abatement can be use to finance the key redevelopment actions in Oak Park Heights: ® Land acquisition ® Site preparation * Public improvements. While 'I'll deals with oil]) the value from now development, abatement can apply to both new and existing vakie. TZIX abatement is subject to a SiMj)1C1- approval process. An abatement resolution can be approved following a public hearing with the required notice. The StLltUt(? -1'aJ1tS the IL10101 to iSSLIC' general obligation bonds supported by the collection of abated taxes. The procceds of the bonds may be Used to pay for (1) J)LlbliC iJ11l)1'0VQMc1ltS that benefit the property, (2) land acquisition, (3) reimbursement to the propefty owne) for improve- ments to the. property, and (4) the costs of issuing the bonds, Limitations Amount: The City has a finite amount of abatement capacity. In any year, the total taxes �Ibated by a political subdivision may not exceed the greater of (1) 10%, of the net tax capacity of the City for the taxes payable year to which the abatement applies, or (2) $200,000. Term: The general limit on the tern) of abatement is 15 years, If one political subdivision declines to abate, then the abatement levy can be made for a maximum of 20 years. Coordination with TIF. Taxes cannot be abated for property located Nvithin a tax increment financ- ing district. Page 14 of 20 Fliral Reporf - Wdevelop mmi Plaimhig Project July 22, 2010 Page 13 Special Service District A special service district is a too] for financing the construction and maintenance of public im- provements within a defined commercial or industrial area. 'f'11is legislation is currently sched- uled to sunset in 2005. A special service district provides a means to levy taxes (service charge) and provide improvements and services. A special service district has several potential applications for redevelopment areas. "The district provides an alternative means of financing the construction of any of the. public improvements typically done with special assessments. The service district approach avoids the benefits test imposed by special assessments. The test for the district is that the amount of service charges imposed must be.. reasonably related to the special services provided. The costs of parkin; or strectscape: improvements, for example, may be better spread across a district than through as- sessme:nts to individual properties. Issues The rise of a special service district is subject to some important constraints: • The process to create district and to levy taxes to use must be initiated by petition of property owners and is subject to owner veto. The use of a special service district reclrrires a collabora- tion of property owners and the City. 'There are two separate steps in the process: (1) adop- tion of an ordinance establishing the service district and (2) adoption of a resolution imposing, the service charges. Neither step cart be initiated by the City. The City must be petitioned to undertake the processes to create a special service district and to impose service charges. At a minimum, the petitions must be signed by owners representing 25% of the area that would be included in the district and 25°,> of the tax capacity subject to the service charge. • The actions of the City Council to adopt the ordinance and the resolution are subject to veto of the property owners. To veto the ordinance or the resolution, objections must be filed with the City Clerk within 115 days of initial Council action to approve. The objections must exceed 35`%, of area, tax capacity or individual /business organizations in the proposed district. • The service charge applies solely to non - residential property. State Law limits the application of a service charge to only property that is classified for property taxation and used for com- mercial, industrial, or public utility purposes, or is vacant land zoned or designated on a land use plan for commercial or 'industrial use. Other types of property may be part of the service district, but may not be subject to the service charge. EDA /MRA Powers The Oak Park I lei ghts FDA has a broad range of powers to promote redevelopment. These poxv- ers include: ® Establishing tax increment financing districts. Using statutory bowers of a housing and redevelopment authority (I-IRA). s Ability to issue revenue bonds to finance: projects. a Levy and use. of 1 DAand 1 -IRA taxing authority. The annual EDA levy cannotexceed 0.018:13`%, of Taxablc Market Value. The I - IRA levy is 0.0 "1850'Yo of Taxable Market Value. Page 15 of 20 Final Reporl - Rcdevelopmeiif Plainihig Project Jidy 22, 2010 Page 14 Application of FDA powers can be evaluated in greater detail as the redevelopment needs of the Target Areas become more clearly defined. Outside Funding Some outside funding and technical assistance is available for redevelopment projects. Metropolitan Council The Metropolitan Council operates the Livable Communities Grant Program. There} are tvvo spe- cific programs that may be applicable to the 'Target Areas, • Livable Comnrunities Demonstration Account (LCDA) provides funding for "development and redevelopment projects that achieve connected development patterns that link housing, jobs and services, and use regional infrastructure: efficiently ". Grants are aNvarded on an an- nual funding cycle.. For 2010, a preliminary application is clue May 28 and final submission b Jul 19. • ']ax Base Revitalization Account (TBRA) grants are used for „ cleaning Elp polluted land for redevelopment and productive uses creates jobs and fuels the region's economic engine ". Ap- plications for 201 O TBRA grants are clue: May 17. Planning for the Target Areas is not in a position to successfully seek funding from these pro - grams in 2010. Applications in 2071 and beyond arc potential objectives'. State The State of Minnesota (through the Department of F,mployment and Economic Development) operates a Redevelopment Grant Program. Grants from this program can pay for "land acquisi- tion, demolition, infrastructure improvements, soil stabilization when infill is required, ponding or other environmental infrastructure and adaptive reuse of buildin,s, including remedial activi- ties at sites vt11'101'e7 a subsequent redevelopment will occur ". Current funding priorities are: • Contamination remediation needs in conjunction with a redevelopment project. • Project meets current tax increment financing requirements for a redevelopment district and tax increments will contribute to the project. • Redevelopment potential within the municipality, • Proximity to public transit if located in the metropolitan area. • Multi- jurisdictional projects that take into account the need for affordable Dousing, transpor- tation, and environmental impact. • Advances or promotes the Green Economy. The 2010 grant applications were due on February 1. The timetable far future applications has not been set. The State has a variety of other finding sources focused oil the clean up of site pollution. Page 16 of 20 F'irrrtl 1Zcporf - 1Zede elopmerrf Plrrrrttill,> I'rojecl jOy 22, 2010 P(We 15 Federal The federal governrrrent has used bonding and tax credits as tools to encourage private devel- opment and stimulate the economy. The authority to use some of these tools expires at the end of 2010. The investigation of federal funding tools should occur as part of planning, for specific redevelopment projects. Preliminary Analysis It is difficult to analyze the funding capacity of public finance tools without a specific project or example. The table on the next page provides a preliminary analysis of generic: funding for `III, tax abatement, and LDA/I-IRA levies. The $1,000,000l;stimated Market Value about is not intend- ed to suggest a particular development project, but rather to provide a basin building block for evaluating funding capacity, The capacity changes in relationship to the amount of ne`v property value added through redevelopment. This analysis will be refined, as needed, with the continuation of the redevelopment planning process. Developer Discussions On . July 8, City Staff and Rusty Iffield held a "developer roundtable" to obtain real world per - spectives on the opportunities and issues for these sites. The developers participating ill this dis- cussion were f of Ryan Companies and Bill Beard and Iron Mehl of the Beard Group. These participants provided perspectives of the. large construction /development company (Ryan) and the sraialler redevelopment specialist. The following is a summary of key points made during this discussion: ® Two critical factors impede new commercial development in the next several years. (1) There is a large volume of retail and office space to be absorber] before there is strong; demand for ne�v development_ (2) At the present time, it is very difficult to obtain hank financing for projects, Financial constraints make sites with high "pursuit costs" less attractive. Pursuit casts arc, ex- penses incurred in creating the ability or right to develop property. Why spend money oil one site when there are other less costly options. Proactive actions taken by a city to reduce these costs (lessen the steps prior to redevelopment) will increase the attractiveness of specific sites. ® Similarly, City financial participation in redevelopment Neill be needed to offset the additional costs of developing a built site. At a minimum, the cost of demolishing and clearing existing structures adds costs not found on vacant land, ® Increased density is essential to making redevelopment financially feasible on Site #l, Up to four floors should be anticipated from development proposals. City should think through appropriate land use controls prior to actual redevelopment. ® Site ##1 will be more attractive the retail and residential along Osgood can be added to create a larger site and the potential for realigning; the frontage road. Ideas for future use of Site #1 include office {potential to take advantage of Proximity to Cau11- Page 17 of 20 1 -hial Repori - Redevelopment Plmrriirr,� Project July 22, 2010 Page 16 ty offices), multi - family housing and destination retail. Lodging would be market driven. ® Site #2 "rill redevelopment to commercial uses similar in character to existing businesses in the area. Recommended Redevelopment Strategies The results of this project clearly demonstrate the need for and benefits of a proactive approach by the City of Oak Park heights to the redevelopment of these: properties. The primary recoin- mendation of this project to create a plan with roles and responsibilities for continuing, to prepare for the redevelopment of these sites. Potential steps to include in the action plan arc: The information collected to this point in the planning process creates a foundation for making more specific: redevelopment strategies for the Target Areas, This information also points to some initial findings and observations about the re.deve�lopinent of the 'Target Areas. J. Target Area I should meet the criteria for a redevelopment 'I'Il" district. The parcels are fully developed. Based oil past experience, both of the buildings appear to meet the statutory criteria far „ structurally substandard ". A formal inspection and evaluation of the buildings should be undertaken to make a factual determination and establish they basis for creating; a `I'lF district. 2. he City should consider the continued assembly of land in Area 1 in advance of develop anent. If so, then the next step is to create a plan for funding the acquisitions. 3. Area 7 is well suited to a more detailed planning study. 1'relinlinary planning would provide a better understanding of development capacity, determine: the potential realignment of the frontage road and explore the configuration of the site for development. 4. The information in ll3 would facilitate additional financial planning. It is likely that the rede- velopment of Target Area will require financial assistance. The assistance would be directed at removing the physical and economic barriers to development including: • Demolition and clearances of existing structures. • removal of gas tanks and potential correction of site pollution from gas station. • Improvement of site access. • Site improvements, including storrnxvater management. • Structured parking, if required by density of development. 5. Unless Target Area 2 is reused as an auto dealership, public financial assistance is likely to facilitate conversion of the site to an alternative use. A key action will be the demolition and Clearance of the existing structure. It would be advantageous to prepare an estimate of demo- lition and clearance for Area 2 and to create funding plan for this action. G. It does not seem likely that the existing structure would ineet the statutory criteria for "struc- turally substandard ". A formal inspection and evaluation of the buildings is required to make a factual determination. Without this finding, the property cannot be placed in a redevelop - ment or a renewal/renovation 71F district. Page 18 of 20 I -'hml Reporf - Redevelopment Pimmiug Project jOy 22, 2010 Page 17 Finance 'Foots Worksheet Taxes Payable 2010 Estirnated Market Value 687,580,700 Taxable Market Value 682,742,100 Total Tax Capacity Value 1.0,486,193 Net Tax Capacity Value 8,080,763 Total Local Tax Rate 95.25% City Tax Rate 43.84% "Fax Abatement Annual Maximum Levy 10% of Net Tax Capacity 808,076 Funding Capacity Estimated Market Value 1,000,000 Tax Capacity Value (Cornmercial) 20,000 Annual Abatement Levy (City Only) 8,768 Present Value Years Total 4% 5% 6 % 5 43,840 39,034 37,963. 36,934 10 87,680 71,116 67,704 64,533 1.5 131,520 97,486 91,009 85,157 20 175,360 119,160 109,269 100, 568 Tax Increment Funding Capacity Estimated Market Value 1,000,000 Tax Capacity Value (Commercial) 2.0,000 Annual Tax Increment 19,050 Present Value Years Total 4% 5% 6% 5 95,250 84,807 82,477 80,246 10 190,500 1.54, 513 147,099 140,210 15 285,750 211,805 197,732 185,018 20 381.,000 258,896 237,405 218,502 EDA Levy 0.01813 of Taxable Market Value 123, 781. HRA Levy 0.01850% of Taxable Market Value 126,307 Page 19 of 20 T'inal Repor! - Refevelopr eni Planning Projed Jiily 22, 2010 P(WC 18 7. It alight be possible to qualify Target Area 2 as a compact development T"IF district. Building area on the site would need to increase from 49,216 square feet to more than 747,700 square feat. This approach would require some combination of multi -story building and structured parking. Under current %ite Law, this type of T'IF district must be established before June 30, 2012. 8. 'There is a short -term opportunity to LISO an economic development TIF district to promote the redevelopment of this site. The district must be establishes] by June 30, 2017 for construction starting by July 1, 2011. 9. Tax abatement can be used for both'Target Areas. 10. The existing land use controls should be reviewed to determine the need fog changes. Page 20 of 20