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IllgS <br />...EHLERS <br />ii. PUBLIC FINANCE ADVISORS <br />SOURCES <br />WITH ASSISTANCE WITHOUT ASSISTANCE <br />Developer Financing - 1st Mortgage <br />Developer Financing - Tax Abatement <br />Revolving Loan - Ramsey <br />Developer Equity <br />TOTAL SOURCES <br />USES <br />Acquisition Costs <br />Construction Costs / Site Work <br />Financing Costs Prof. Services <br />Site Improvements <br />Machinery and Equipment <br />TOTAL USES <br />Amount <br />5,760,000 <br />100,000 <br />150,000 <br />1,440,000 <br />7,450,000 <br />Amou nt <br />1,895,000 <br />5,175,000 <br />130,000 <br />100,000 <br />150,000 <br />7,450,000 <br />Pct. <br />77.32% <br />1.34% <br />2.01% <br />19.33% <br />100.00% <br />% of Cost <br />25.44% <br />69.46% <br />1.74% <br />1.34% <br />2.01% <br />100.00% <br />Amou nt <br />5,760,000 <br />0 <br />0 <br />1,690,000 <br />7,450,000 <br />Amou nt <br />1,895,000 <br />5,175,000 <br />130,000 <br />100,000 <br />150,000 <br />7,450,000 <br />Pct. <br />77.32% <br />0.00% <br />0.00% <br />22.68% <br />100.00% <br />% of Cost <br />25.44% <br />69.46% <br />1.74% <br />1.34% <br />2.01% <br />100.00% <br />Based on the total development costs and proposed financing for this project, we estimate a <br />business (like SA Group) would need to pay a blended lease rate of approximately $13.55 per <br />square foot without any assistance for a developer to achieve an average 10 percent COC return <br />for this project over 6.5 years (the anticipated term of tax abatement payments). We estimate <br />that a blended market lease rate for Ramsey is in the $7.50 to $9.50 per square foot range. <br />This analysis indicates SA Group would need to pay a lease rate that is higher than the market rate <br />to occupy the property, demonstrating assistance for the project may be warranted. If we assume <br />a developer received the requested $250,000 in assistance, SA Group would need to pay a lease <br />rate of approximately $13.40 per square foot for the developer to achieve an average 10 percent <br />COC return for this project within 6.5 years. This is still above the assumed market lease rate. <br />Therefore, if the City chooses to provide the requested assistance, we believe it will help facilitate <br />the project and not unduly enrich the applicant. <br />Please contact me at 651-697-8512 if you have any questions or require further information. <br />BUILDING COMMUNITIES. IT'S WHAT WE DO. <br />info@ehlers-inc.com yL) 1(800) 552-1171 <br />www.ehlers-inc.com <br />