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MEMORANDUM <br />TO: <br />FROM: <br />DATE: <br />SUBJECT: <br />Sean Sullivan, Economic Development Manager <br />Jason Aarsvold - Ehlers <br />June 30, 2021 <br />Oppidan, Inc TIF Request <br />gi.„„ EHLERS <br />PUBLIC FINANCE ADVISORS <br />The City of Ramsey (the "City") received a request for tax increment financing (TIF) assistance from <br />Oppidan, Inc, (the "Developer") to facilitate development of 3 industrial buildings totaling 405,300 <br />sq. ft. located north of Bunker Lake Blvd. and west of Armstrong Blvd (PID# 20-32-25-43-0005). <br />The Developer is requesting $2.9 million in tax increment assistance to off -set the extraordinary <br />construction costs given current market fluctuations. The proposed project qualifies for inclusion <br />in an economic development TIF district, which has a nine-year maximum duration. <br />The purpose of this memorandum is to review the need for TIF assistance based on our analysis of <br />the Developer's project budget and projections, generally known as a pro forma. This analysis is <br />commonly referred to as the "but for" test, meaning the project would not occur on this site "but <br />for" the public assistance being provided. Based on this analysis, we determined TIF assistance in <br />the amount of $1.172 million is warranted for the project as further described in the <br />recommendations section below. <br />Pro Forma Analysis <br />Generally, this project meets the expectations of a flex industrial project with regards to project <br />costs, financing, projected revenues, and return on investment. The proposed sources and uses of <br />funds for the project are included below, followed by our findings relating to the analysis of the <br />project: <br />Source <br />First Mortgage <br />TIF Mortgage <br />Equity <br />TOTAL SOURCES <br />Amount <br />30,877,947 <br />1,172,000 <br />10,683,316 <br />42,733,263 <br />Pct. <br />72% <br />3% <br />25% <br />100% <br />Amount <br />Acquisition Costs 4,050,000 <br />Construction Costs 31,076,396 <br />Professional Services 3,824,068 <br />Financing Costs 1,792,553 <br />Developer Fee 1,500,000 <br />Cash Accounts 490,246 <br />TOTAL USES 42,733,263 <br />Pct. <br />9.48% <br />72.72% <br />8.95% <br />4.19% <br />3.51% <br />1.15% <br />100% <br />Per Sq. Ft. <br />9.99 <br />76.68 <br />9.44 <br />4.42 <br />3.70 <br />1.21 <br />105.44 <br />BUILDING COMMUNITIES. IT'S WHAT WE DO. <br />17-' info@ehlers-inc.com 1 (800) 552-1171 <br />www.ehlers-inc.com <br />