Laserfiche WebLink
Memo <br />To: Patrick Brama, Economic Development Manager/Assistant City <br />Administrator <br />From: Jason Aarsvold, Ehlers <br />Date: October 20, 2014 <br />Subject: COR Tax Exempt Property Swap Impact <br />As we understand, the city is contemplating a land swap that would give up a 10-acre <br />parcel of land within the COR development area in exchange for land that is outside of <br />the COR. Further, this swap would include no monetary compensation and the entity <br />receiving land within the COR would develop it as a tax-exempt use. <br />You asked us to estimate how this might impact the city's ability to repay obligations <br />connected to the COR project as a result of reduced tax increment and potential <br />proceeds from the sale of the COR property for development. <br />For purposes of this analysis we have assumed that area would develop by 2022 as <br />currently contemplated in the larger TIF analysis for the COR project. In addition, we <br />have assumed development of office and retail with 35% building coverage on the 10 <br />acres. The assumed development scenario and valuation are depicted in the table <br />below. <br />Use <br />Square <br />Feet <br />Value per <br />Sq. Ft. <br />Total <br />Value <br />Office 32,460 $80 $2,596,800 <br />Retail 120,000 $119 $14,280,000 <br />Tota I 152,460 $16,876,800 <br />Using this scenario, we estimated the resale price of the property based on $20 per <br />building square foot, which is consistent with previous analyses in the COR area. In <br />addition, we calculated the tax increment that would be lost if the property were to <br />become exempt, rather than fully developed by 2022. The table below contains those <br />figures. <br />wv+ w,ehlers-Inc.com <br />EHLERS <br />LEADERS IN PUBLIC FINANCE <br />Minnesota phone 651-697-8500 3060 Centre Pointe Drive <br />Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 55113-1122 <br />toll free 800-552-1171 <br />