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EHLERS <br />PUBLIC FINANCE ADVISORS <br />Based on the total development costs and assumed financing for this project, we estimate a <br />business (like Zero Zone) would need to pay a blended lease rate of approximately $10.15 per <br />square foot without any assistance for a developer to achieve an average 7 percent YOC return <br />for this project over 9 years (the anticipated term of tax increment payments). We estimate that a <br />blended market lease rate for Ramsey is in the $7.50 to $9.50 per square foot range. <br />This analysis indicates Zero Zone would need to pay a lease rate that is higher than the market <br />rate to occupy the property, demonstrating assistance for the project may be warranted. If we <br />assume a developer receives $360,000 in TIF assistance, Zero Zone would need to pay a lease <br />rate of approximately $9.20 per square foot for the developer to achieve an average 7 percent <br />YOC return for this project within 9 years. This is within the higher end of the assumed market <br />lease rate. Therefore, if the City chooses to provide $360,000 in TIF assistance, we believe it will <br />help facilitate 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 />