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HomeMy WebLinkAbout8A - TIF Shepherd's Path LLC AGENDA ITEM: DISCUSSION: 16200 Eagle Creek Avenue S.E. Prior Lake, MN 55372-1714 CITY COUNCIL AGENDA REPORT June 26, 2006 8A PAUL SNOOK, ECONOMIC DEVELOPMENT DIRECTOR PUBLIC HEARING TO CONSIDER APPROVAL OF RESOLUTION ESTABLISHING THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO.6 AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 6-1 AND THE PROPOSED ADOPTION OF THE TAX INCREMENT FINANCING PLAN THEREFORE (SHEPHERD'S PATH SENIOR HOUSING). Introduction The purpose of this item is to consider the following: 1. The establishment of the Development Program for Development District No.6; and 2. The establishment of TIF District 6-1. City Council is asked to establish Tax Increment Financing District No. 6-1 for the purposes of assisting in the development of a senior independent living facility pursuant to Minnesota Law At its May 15th meeting City Council received from Shepherd's Path LLC an Application for Financial Assistance, and called public hearings on proposed City and Economic Development Authority revenue bonds, and proposed establishment of Tax Increment Financing district 6-1. At the June 5th meeting, the City Council and Economic Development Authority approved bonds for the development. Shepherd's Path Senior Campus is designed to be a full service high quality residential environment and a comprehensive community resource exclusively for adults age 62 and over. Shepherd's Path will serve a wide spectrum of lifestyle needs from active adults 62 and over to very frail adults who need a wide range of support and services. In order to have an affordable residential element to Shepherd's Path, revenue bonds and tax increment financing are necessary to keep the rents at an affordable rate. City Council is asked to hold the required public hearing on the proposed tax increment financing and approve the TIF Plan. Historv The development of the senior residential campus arrives on the heels of the new Shepherd of the Lake Lutheran Church which was completed in 2003. The senior campus represents the implementation of the master plan developed by the church to create a multi-generational community where senior adults, family members, church members, youth, volunteers and the www.cityofpriorlake.com R. \j.\,genda Reports\J une 26 2006\AgEJDRe&f:'9l52~~47>!~i3o'tri?gf~F9S~!~"7~ij.~~6). DOC residents of Prior Lake have an opportunity to benefit from the synergy of cooperative programs. Current Circumstances Shepherd's Path contracted with Maxfield Research to conduct a market analysis of the senior housing needs in Prior Lake. Maxfield's market analysis shows a total potential market base for senior housing of 660 households in the Prior Lake market area. It is estimated that 45% of the market base will need or want subsidized I affordable housing. Thus, demand in the Prior Lake market area exists for 297 subsidized I affordable senior housing units. Some but not all of that demand is or will be met by existing affordable units provided by other sources such as the Scott County HRA. The market analysis also reveals that Scott County is one of the few counties in the state that has an inadequate number of skilled nursing beds to serve the senior population. In fact, there are no skilled nursing facilities in Savage or Prior Lake. Maxfield's calculations reveal the potential to support up to 180 beds in the Prior Lake market area through 2009. Shepherd's Path is proposing to construct a senior housing development containing approximately 154 rental units which consists of 82 independent units, 54 assisted living units and 18 dementia units. The facility will provide affordable housing that is currently lacking within the city. The applicant plans on starting construction as soon as possible, contingent upon City approvals of the site I building plan-design and TIF. Financing for the project will consist of bank financing, tax increment financing and conduit revenue bonds. The tax increment financing plan (attached) indicates that there are up to $5.5 million in eligible expenses for which TIF could be requested. The applicant is requesting TIF funds to be applied toward eligible costs of site improvements and preparation costs. The TIF amount represents approximately 13% of the total long term financing of the project. The proposed use of TIF is "pay-as-you-go" method of reimbursing eligible project costs. Pay-as-you-go TIF is when tax increment receipts generated from the development are used to reimburse the developer and city for qualified costs over the life of the district. This form of tax increment financing does not guarantee a specific amount of benefits and therefore the taxpayer is not at financial risk. In accordance with State Statute, project eligibility is based on proposed redevelopment activities, and passing of the "But For" test (a finding that the proposed TIF assistance is necessary to bring about the proposed development). Both the eligibility and "But For" test have been completed and recommended for approval by city financial consultant Northland Securities as part of the Development Program for Development District No. 6, and Tax Increment Financing Plan for TIF District No. 6-1. The City must also enter into a private development contract with Shepherd's Path. Those items will be before you at a meeting in the near R\Agenda Reports\June 26 2006\Agenda Report - Public Hearing TIF Dist 6-1 (6-26-06).DOC future. Conclusion The Shepherd's Path project meets many of the objectives of the City's 2030 Vision and Strategic Plan under the Housing Quality and Diversity section. Most importantly, the developers of this project will make available various styles and levels of senior housing (lifecycle housing). This project is also consistent with the City's Tax Increment Financing Policy. The proposed project would not happen without the establishment of Development District No.6 and TIF District 6-1. If the Council wishes to proceed, it should by resolution, approve establishment of Development District No.6, TIF District 6-1 and the related TIF Plan. ISSUES: The City Council needs to determine if it is important to have Shepherd's Path be a development that provides opportunity for lifecycle housing, inclusive of affordable units. If so, tax increment financing along with the previously approved bonds will help achieve the affordable residential component of the project, and provide a significantly greater degree of related services than would otherwise occur. In accordance with State Statutes, the proposed Development Program for District NO.6 and TIF Plan for TIF District 6-1 have been sent to the other affected taxing jurisdictions, including Scott County and the Prior Lake Savage School District 719. The City has not received comments from the jurisdictions other than the County regarding the TIF district. At its June 13' 2006 meeting, the County Board acknowledged that the district qualifies for housing purposes and provided comments in support of the project and stressed that the term of the district only extend for the required financing amount which is represented in the TIF Plan as 15 years rather than the 25 years maximum allowed by law. The County asked that their comments be made part of the June 26, 2006 hearing record. FINANCIAL IMPACT: NOTE: all financial approvals for this project are conditioned upon approval of a final plat. The City is proposing to collect taxes that would normally be disbursed to additional taxing jurisdictions and allow the reimbursement of project costs back to the developer over a portion of the duration of the TIF District (The full term of a Housing District is 25 years). According to the cash flow projection, the gross tax increment is estimated by the City financial consultant Northland Securities to be approximately $6.2 million over 15 years of the TIF District, with a present value of $4.2 million. The proposed net TIF financing for the project is $5.5 million to assist in the development. The district would extend 15 years rather than the full 25 years. The cash flow and impacts to the local taxing jurisdictions are presented in greater detail in the attached TIF Plan for TIF District 6-1. Allen Black of Presbyterian Homes I Shepherd's Path, and Nick Skarich of Northland Securities will be in attendance at the public hearing to answer questions you may have. R\Agenda Reports\June 26 2006\Agenda Report - Public Hearing - TIF Dist 6-1 (6-26-06).DOC ALTERNATIVES: 1. Adopt Resolution #06-XX, approving the Development Program for Development District NO.6 and the establishment of TIF District 6-1. 2. Deny the resolution 3. Defer for a specific reason RECOMMENDED MOTION: Alternative 1. ATTACHMENTS: 1. Resolution #06-XX, approving the Development Program for Development District NO.6 and the establishment of TIF District 6-1. 2. Development Program for Development District No.6 3. Tax Increment Financing Plan for establishment of Tax Increment Financing District No. 6-1 R:\Agenda Reports\June 26 2006\Agenda Report - Public Hearing - TIF Dist 6-1 (6-26-06).DOC EXTRACT OF MINUTES OF A MEETING OF THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, MINNESOTA HELD: June 26, 2006 Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Prior Lake, Scott County, Minnesota, was duly called and held on the 26th day of June, 2006, at 7:00 p.m. The following members of the Council were present: and the following were absent: Member introduced the following resolution and moved its adoption: RESOLUTION APPROVING THE DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT NO.6 AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT 6-1 AND APPROVING THE TAX INCREMENT FINANCING PLAN THEREFOR WITHIN DEVELOPMENT DISTRICT NO.6 WHEREAS: A. It has been proposed that the City of Prior Lake, Minnesota (the "City") establish Development District No.6 and establish Tax Increment Financing District 6-1 therein and approve and accept the proposed Tax Increment Financing Plan therefor under the provisions of Minnesota Statutes, Sections 469.174 to 469.1799 (the "Act"); and B. The City Council has investigated the facts and has caused to be prepared a proposed development program for Development District No.6 (the "Development Program"), and has caused to be prepared a proposed tax increment financing plan for Tax Increment District 6-1 therein (the "Tax Increment Financing Plan"); and C. The City has consulted with its Planning Commission regarding the development and the Planning Commission approved the plat for the development on June 12,2006; and D. The City has performed all actions required by law to be performed prior to the establishment of Development District No.6 and Tax Increment Financing District 6-1 therein, and the adoption of a proposed Development Program and Tax Increment Financing Plan therefor, including, but not limited to, notification of Scott County and Independent School District No. 719 having taxing jurisdiction over the property to be included in Tax Increment Financing District 6-1 and the holding of a public hearing upon published and mailed notice as required by law; and NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Prior Lake as follows: 1896145vl 1. Development District No.6. There is hereby established in the City a municipal Development District No.6 (the "Development District"), the initial boundaries of which are fixed and determined as described in the Development Program. 2. Development Program. The Development Program for the Development District, a copy of which is on file in the office of the City Manager, is adopted as the development program for the Development District. 3. Tax Increment Financing Plan. The Tax Increment Financing Plan is adopted as the tax increment financing plan for Tax Increment Financing District 6-1, and the City Council makes the following findings: (a) Tax Increment Financing District 6-1 is a housing district as defined in Minnesota Statutes, Section 469.174, Subd. 11, the specific basis for such determination being that the construction of the approximately 154 unit rental housing facility (82 independent living units, 54 assisted living units and 18 memory care units) in the City will provide safe, decent, sanitary housing for residents of the City, help prevent the emergence of blight and result in the preservation and enhancement of the tax base of the State. (b) The proposed development in the opinion of the City Council, would not occur solely through private investment within the reasonably foreseeable future. The reasons supporting this finding are that: (i) Private investment will not finance these development activities because of prohibitive costs relative to rental revenues for low and moderate income senior housing units. It is necessary to finance these development activities through the use of tax increment financing so that development of affordable senior housing and other development by private enterprise will occur within Development District No.6. (ii) A comparative analysis of estimated market values both with and without establishment of Tax Increment Financing District 6-1 and the use of tax increments has been performed as described above. Such analysis is found in Exhibit V of the Tax Increment Financing Plan, and indicates that the increase in estimated market value of the proposed development (less the indicated subtractions) exceeds the estimated market value of the site absent the establishment of Tax Increment Financing District 6-1 and the use of tax increments. (c) In the opinion of the City Council, the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of Tax Increment Financing District 6-1 permitted by the Tax Increment Financing Plan. The reasons supporting this finding are that: 1896145vl 2 (i) The estimated amount by which the market value of the site will increase without the use of tax increment financing is $0, and a small amount attributable to appreciation in land value; (ii) The estimated increase in the market value that will result from the development to be assisted with tax increment financing is $31,184,800 (from $315,200 to $31,500,000); and (iii) The present value of the projected tax increments for the maximum duration of the district permitted by the tax increment financing plan is $4,209,482. (d) The Tax Increment Financing Plan for Tax Increment Financing District 6-1 conforms to the general plan for development or redevelopment of the City of Prior Lake as a whole. The reasons for supporting this finding are that: (i) Tax Increment Financing District 6-1 is properly zoned; and (ii) The Tax Increment Financing Plan will generally compliment and serve to implement policies adopted by the City. (e) The Tax Increment Financing Plan will afford maximum opportunity, consistent with the sound needs of the City of Prior Lake as a whole, for the development or redevelopment of Development District No.6 by private enterprise. The reasons supporting this finding are that: The development activities are necessary so that development and redevelopment by private enterprise can occur within Development District No.6. 4. Public Purpose. The adoption of the Development Program for Development District No.6, and the adoption of the Tax Increment Financing Plan for Tax Increment Financing District 6-1 therein conform in all respects to the requirements of the Act and will help fulfill a need to develop an area of the State which is already built up to provide employment opportunities and provide safe, decent, sanitary housing for all residents of the City, to improve the tax base and to improve the general economy of the State and thereby serves a public purpose. 5. Certification. The Auditor of Scott County is requested to certify the original net tax capacity of Tax Increment Financing District 6-1 as described in Tax Increment Financing Plan, and to certify in each year thereafter the amount by which the original net tax capacity has increased or decreased in accordance with the Act; and the City Manager is authorized and directed to forthwith transmit this request to the County Auditor in such form and content as the Auditor may specify, together with a list of all properties within Tax Increment Financing District 6-1 for which building permits have been issued during the 18 months immediately preceding the adoption of this Resolution. 189614Svl 3 6. Filing. The City Manager is further authorized and directed to file a copy of the Development Program and Tax Increment Financing Plan for Tax Increment Financing District 6-1 with the Commissioner of Revenue. 7. Administration. The administration of Development District No.6 is assigned to the City Manager who shall from time to time be granted such powers and duties pursuant to Minnesota Statutes, Sections 469.130 and 469.131 as the City Council may deem appropriate. The motion for the adoption of the foregoing resolution was duly seconded by and upon vote being taken thereon, the following voted in favor thereof: member and the following voted against the same: Adopted by the City council of the City of Prior Lake, Minnesota, this 26th day of June, 2006. Mayor ATTEST: City Manager 1896145vl 4 STATE OF MINNESOTA COUNTY OF SCOTT CITY OF PRIOR LAKE I, the undersigned, being the duly qualified and acting Manager of the City of Prior Lake, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council of said City, duly called and held on the date therein indicated, insofar as such minutes relate to the establishment of Development District No.6 and Tax Increment Financing District 6-1 therein in the City. WITNESS my hand this _ day of , 2006. City Manager 1896145vl 5 Shepherd's Path Project Dated: June 15, 2006 PLAN DOCUMENTS PREPARED BY NORTHLAND i I SECURITIEl Northland Securities, Inc. 45 South 7th Street - Suite 2500 Minneapolis, MN 55402 (800) 851-2920 Member NASD and SIPC TABLE OF CONTENTS ARTICLE I - DEFINITIONS AND EXHIBITS Section 1.01 Definitions ...... ........................ ........................ ....................................................... 1 Section 1.02 Introduction................................................ ..... ............................. .......................... 2 Section 1.03 Exhibit Reference/Description............................ ............... .................................... 2 ARTICLE II - STATEMENT OF PUBLIC PURPOSE AND AUTHORITY Section 2.01 Statement of Need and Public Purpose.................................................................. 3 Section 2.02 Statutory Authority ......... ........................... ......................................... ................... 3 ARTICLE III - DEVELOPMENT PROGRAM Section 3.01 Statement of Objectives .................. ....................................................................... 4 Section 3.02 Boundaries of Development District ..................................................................... 4 Section 3.03 Development Activities .............................................................. ........................4-5 Section 3.04 Payment f Public Costs ........................................................................... ............... 5 Section 3.05 Environmental Controls; Land Use Regulations ................................................... 5 Section 3.06 Park and Open Space to be Created....................................................................... 5 Section 3.07 Proposed Reuse of Property ...................................................................................5 Section 3.08 Administration and Maintenance of Development District ................................... 6 Section 3.09 Relocation.............. .............. ................................................................. ......... ........ 6 Section 3.10 Amendments ............................ ........................ ...................................................... 6 Section 3.11 Enlargement of Development District ................................................................... 6 Section 3.12 Increase Estimates of Public Costs and Budget..................................................... 6 ARTICLE IV - TAX INCREMENT FINANCING PLAN Section 4.01 Section 4.02 Section 4.03 Section 4.04 Section 4.05 Section 4.06 Section 4.07 Section 4.08 Section 4.09 Section 4.10 Section 4.11 Section 4.12 Section 4.13 Section 4.14 Section 4.15 Section 4.16 Section 4.17 Section 4.18 Section 4.19 Statement of Need and Public Purpose .................................................................. 7 Statutory Authority ........... ..... .................... ...... ................................... ................... 7 Statement Objectives ...................... ........ ........................................... .................... 7 Housing District Designation...... ............................ ..................................... ....... 7-8 Duration of the Tax Increment Financing District................................................. 8 Specific Development Expected to Occur Within the TIF District ....................... 8 Property to be Included in the TIF District............................................................ 8 Property to be Acquired in the TIF District........................................................... 8 Findings and Need for Tax Increment Financing .............................................9-10 Estimated Sources of Revenue /Public Costs ....................................................... 10 Estimated Amount of Bonded Indebtedness........................................................ 10 Original Net Tax Capacity ..............................................................................10-11 Original Local Tax Capacity Rate.. ...................... ........................... .................... 11 Projected Retained Captured Net Tax Capacity and Projected Tax Increment... 11 Use of Tax Increment ................. ........................... ......................................... ..... 12 Excess Tax Increment ..................................................................................... 12-13 County Road Costs .............................................................................................. 13 Four-Year Rule - Limitations on Property Not Subject to Improvements........... 13 Five-Year Rule - Tax Increment Pooling............................................................. 14 Section 4.20 Section 4.21 Section 4.22 Section 4.23 Section 4.24 Section 4.25 Section 4.26 Section 4.27 Section 4.28 Limitations on Administrative Expenses ............................................................. 15 Estimated Impact on Other Taxing Jurisdictions................................................. 15 Prior Planned Improvements.......................................... ...................................... 15 Development Agreements..................................................... ............................... 16 Assessment Agreements. ......................................... ......................................... ... 16 Modifications of the Tax Increment Financing Plan ........................................... 16 Administration of the Tax Increment Financing Plan.......................................... 17 Financial Reporting and Disclosure Requirements......................................... 18-21 Business Subsidy Compliance .............................................................................22 Map of the Development District.......................................................................................... Map of the Tax Increment Financing District....................................................................... Property Description...................................................................................................... ....... Sources and Uses Statement ......................................................... ......................... ............... TIF District Assumptions Report ................... ....................... ...... ............................ .............. Proj ected Tax Increment Report..... ................. .......................................................... ........... Estimated Impact on Other Taxing Jurisdictions Report ...................................................... Market Value Analysis Report..................... ........................... ............................... ............... EXHIBIT I EXHIBIT IA EXHIBIT IB EXHIBIT II EXHIBIT III EXHIBIT IV EXHIBIT V EXHIBIT V Article I - Definitions, Introduction and Exhibits NORTHLANotSECURITIE Section 1.01 Definitions The terms defmed in this section have the meanings given herein, unless the context in which they are used indicates a different meaning: "Authority" means the City of Prior Lake. "City" means the City of Prior Lake, Minnesota; also referred to as a "Municipality". "City Council" means the City Council of the City; also referred to as the "Governing Body". "County" means Scott County, Minnesota. "Development District Act" means Minnesota Statutes, Sections 469.124 through 469.134, as amended and supplemented from time to time. "Development District" means Municipal Development District No.6 in the City, created and established pursuant to and in accordance with the Development District Act as described in Section 3.02 of the Development Program. "Development Program" means the Development Program for the Development District, as amended and supplemented from time to time. "Housing Project" means a project, or a portion of a project, that meets all of the housing qualifications of a housing district under Minnesota Statutes, Sections 469.174, subdivision 11, whether or not actually established as a housing district. "Land Use Regulations" means all federal, state and local laws, rules, regulations, ordinances and plans relating to or governing the use or development of land in the City, including but not limited to environmental, zoning and building code laws and regulations. "Proiect Area" means the geographic area of the Development District. "Public Costs" means the costs set forth in Sections 4.10 and 4.15 of the Tax Increment Financing Plan, repayment of debt service on any Tax Increment Bonds, and any other eligible costs set forth in the Tax Increment Financing Plan, Development Program, or Minnesota Statutes, Section 469.176, subdivision 4. "Public Improvements" means the public improvements, if any, described in Section 3.03 of the Development Program and Section 4.10 of the Tax Increment Financing Plan. "School District" means Independent School District No. 719, Scott County, Minnesota. "State" means the State of Minnesota. "TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1791, both inclusive. "TIF District" means Tax Increment Financing (Housing) District No.6-I. "TIF Plan" means the tax increment financing plan for the TIF District. City of Prior Lake, Minnesota 1 Article I - Definitions, Introduction and Exhibits NORTHLi\NotSECURITIE Section 1.02 Introduction The City of Prior Lake has agreed to provide tax increment financing assistance to the Shepherd's Path project in an effort to assist in the development related to newly constructed senior housing within the City of Prior Lake. It has been stated, in writing, by Shepherd's Path to the City that the project will not be viable without public participation. The City, through this document, will be establishing Tax Increment Financing District No.6-I. The Municipal Development District is coterminous with the Tax Increment Financing District boundaries. Section 1.03 Exhibit ReferencelDescription Exhibit I This is a map that describes the boundaries of the Development District in which the Tax Increment Financing District will be established. Exhibit IA This is a map that describes the boundaries of the Tax Increment Financing District in which the project(s) generating the tax increment will be located. Exhibit IB This is a property description that describes the property to be included within the boundaries of the TIF district. Exhibit II This is a sources and uses statement that line items the anticipated revenue sources for the project and the anticipated expenditures for those revenues. Exhibit III This report shows the various project and district assumptions for the tax increment financing district including applicable dates, original tax capacity information, projected project valuation, buildout, and various required elections. Exhibit IV This report shows the projected cash flow of the tax increment over a specified period of time. It reflects calculations used to determine "net" tax increment including various additions and deductions. Exhibit V This report shows the estimated impact on the respective taxing jurisdictions if the captured tax capacity was available immediately to the taxing jurisdictions (See Section 4.22). It also shows a comparative market value analysis of the property both with and without the establishment of the TIF district. (See Section 4.09(2)). City of Prior Lake. Minnesota 2 Article II - Statement of Public Purpose and Authority NORTHI.ANotSECURITIE Section 2.01 Statement of Need and Public Purpose The City Council of the City has determined that there is a need for the City to take certain actions designed to encourage, ensure and facilitate development and redevelopment by the private sector of underutilized, and unused land located within the corporate limits of the City in order to provide additional employment opportunities for residents of the City and the surrounding area; to improve the tax base of the City, the County and Independent School District No. 719 (the "school district"), thereby enabling them to better utilize existing public facilities and provide needed public services; and to improve the general economy of the City, the County and the State. Specifically, the City Council has determined that the property within the Development District is either underutilized or unused due to a variety of factors, including inadequate public improvements to serve the property; which has resulted in a lack of private investment; that, as a result, the property is not providing adequate employment opportunities, and is not contributing to the tax base and general economy of the City, the School District, the County and the State to its full potential; and, therefore, that it is necessary for the City to exercise its Authority under the Development District Act and the Tax Increment Financing Act to develop, implement and finance a program designed to encourage, ensure and facilitate the commercial development and redevelopment of the property located in the Development District, to further and accomplish the public purposes specified in this paragraph. The development proposed for the Development District would not occur solely through private investment in the foreseeable future; the Tax Increment Financing Plan will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the property to be located in the Development District by private enterprise. The welfare of the City, the County and the State of Minnesota requires active promotion, attraction, encouragement and development of economically sound industry and commerce by the City. Section 2.02 Statutory Authorization The Development District Act authorizes the City, upon certain public purpose fmdings by the City Council, to establish and designate development districts within the City and to establish, develop and administer development programs therefor to meet the needs and accomplish the public purposes specified in Section 2.01. In accordance with the purposes set forth in Section 469.124 of the Development District Act, the City Council has established the Development District comprising the area described on the attached Exhibit I, lA, and IB and has adopted this Development Program therefor. The TIF Act authorizes the City, upon certain findings by the City Council, to establish and designate tax increment financing districts within the Development District and to adopt and implement a tax increment financing plan to accomplish the Development Program established for the Development District. In accordance with the Tax Increment Financing Act, the City has established Tax Increment Financing District No. 6-1 in the Development District as a housing district described in Section 469.174 subdivision 11, and has adopted therefor the Tax Increment Financing Plan set forth in Article IV hereof, which provides for the use of tax increment financing to fmance the costs of qualified public activities and improvements in the Development District, as specified in the Development Program and the Tax Increment Financing Plan. City of Prior Lake, Minnesota 3 Article III - Development Program NORTHLANotSECURITlE DEVELOPMENT PROGRAM Section 3.01 Statement of Objectives The establishment of the Development District in the City pursuant to the Development District Act, is necessary and in the best interests of the City and its residents and is necessary to give the City the ability to meet certain public purpose objectives that would not be obtainable in the foreseeable future without intervention by the City in the normal development process. The City intends, to the extent permitted by law, to accomplish the following objectives through the implementation of the Development Program: (1) Provide for the acquisition of land and construction and financing of the Site Improvements in the Development District which are necessary for the orderly and beneficial development of the Development District and adjacent areas of the City. (2) Promote and secure the prompt and unified development of certain property in the Development District, such property is not now in productive use or in its highest and best use, with a minimum adverse impact on the environment, and thereby promote and secure the desirable development of other land in the City. (3) Promote and secure additional employment opportunities within the Development District and the City for residents of the City and the surrounding area, thereby improving living standards and reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. (4) Secure the increase of assessed values of property subject to taxation by the City, the County, the Independent School District No. 719, the County, and other taxing jurisdictions in order to better enable such entities to pay for governmental services and programs that they are required to provide. (5) Promote the concentration of new unified development consisting of desirable industrial and other appropriate development in the Development District so as to maintain the area in a manner compatible with its accessibility and prominence in the City. (6) Encourage the expansion and improvement of local business, economic activity and development, whenever possible. (7) Create a desirable and unique character within the Development District through quality land use alternatives and design quality in new buildings. (8) Encourage and provide assistance for residential development, including single and multifamily housing accommodations for low and moderate income families. Section 3.02 Boundaries of the Development District The area within the Development District is described in the attached Exhibit I. Section 3.03 Development Activities The City will perform or cause to be performed, to the extent permitted by law, all project activities pursuant to the Development District Act, the Tax Increment Financing Act and other applicable state City of Prior Lake, Minnesota 4 Article III - Development Program NORTHLANOOSECURITlE laws. In doing so the City anticipates that the following may, but are not required, to be undertaken by the City: (1) The making of studies, planning and other formal and informal activities relating to the Development Program. (2) The implementation and administration of the Development Program. (3) The rezoning of land within the Development District. (4) The acquisition of property, or interests in property, by purchase or condemnation, when such acquisition is consistent with the objectives ofthe Development Program. (5) The preparation of property for use and development in accordance with applicable Land Use Regulations and the development agreement, including demolition of structures, clearance of sites, placement of fill and grading. (6) The resale of property to private parties. (7) The construction or reconstruction of site improvements described in Section 4.07 hereof. (8) The issuance of tax increment bonds to finance the Public Costs of the Development Program, and the use of tax increments, or other funds available to the City, to payor finance the Public Costs of the Development Program incurred or to be incurred by it pursuant to the Development Agreement. (9) The use of tax increments to pay debt service on tax increment bonds or otherwise payor reimburse with interest the Public Costs of the Development Program. Section 3.04 Payment of Public Costs It is anticipated that the Public Costs of the Development District will be paid primarily from proceeds of tax increment bonds or from tax increments. The City reserves the right to use other sources of revenue including, but not limited to, special assessments and user charges, which the City may apply to pay a portion of the Public Costs. Section 3.05 Environmental Controls; Land Use Regulations All municipal actions, public improvements and private development shall be carried out in a manner consistent with existing environmental controls and all applicable Land Use Regulations. Section 3.06 Park and Open Space to be Created Park and open space created within the Development District will be done so in accordance with the zoning and platting ordinances of the City. Section 3.07 Proposed Reuse of Property The Development Program contemplates that the City may acquire property and reconvey the same to another entity. Prior to formal consideration of the acquisition of any property, the City Council will require the execution of a binding development agreement with respect thereto and evidence that tax increments or other funds will be available to repay the Public Costs associated with the proposed acquisition. It is the intent of the City to negotiate the acquisition of property whenever possible. Appropriate restrictions regarding the reuse and redevelopment of property shall be incorporated into any development agreement to which the City is a party. City of Prior Lake, Minnesota 5 Article III - Development Program NORTHI.ANotSECURITlE Section 3.08 Administration and Maintenance Maintenance and operation of the Development District will be the responsibility of the City Clerk- Treasurer who shall serve as administrator of the Development District. Each year the administrator will submit to the City Council the maintenance and operating budget for the following year. The administrator will administer the Development District pursuant to the provisions of Section 469.131 of the Development District Act; provided, however, that such powers may only be exercised at the direction of the City Council. No action taken by the administrator pursuant to the above-mentioned powers shall be effective without authorization by the City Council. Section 3.09 Relocation Any person or business that is displaced as a result of the Development Program will be relocated in accordance with Minnesota Statutes, Sections 117.50 to 117.56. The City accepts its responsibility for providing such relocation assistance pursuant to Section 469.133 of the Development District Act. Section 3.10 Amendments The City reserves the right to alter and amend the Development Program, and the Tax Increment Financing Plans, subject to the provisions of state law regulating such action. The City specifically reserves the right to enlarge or reduce the size of the Development District and the Tax Increment Financing District, the Development Program and the Public Costs of the Development Program and the amount of Tax Increment Bonds to be issued to fmance such costs by following the procedures specified in Minnesota Statutes, Section 469.175, Subdivision 4. Section 3.12 Increased Estimates of Public Costs and Budget The additional costs eligible to be incurred by the City, directly or indirectly, in carrying out the Development Program, as modified are amended to include the Public Costs set forth in the Tax Increment Financing Plan City of Prior Lake, Minnesota 6 Article IV - Tax Increment Financing Plan NORTHLANotSECURITIE TAX INCREMENT FINANCING PLAN Section 4.01 Statement of Need and Public Purpose See Section 2.01 of the Statement of Public Purpose and Authority. Section 4.02 Statutory Authorization See Section 2.02 of the Statement of Public Purpose and Authority. Section 4.03 Statement of Objectives See Section 3.01 of the Development Program for the Development District. Section 4.04 Housing District Designation Housing districts are a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in: (1) Chapter 462A, Title II ofthe National Housing Act of 1934; (2) the National Housing Act of 1959; (3) the United States Housing Act of 1937, as amended; (4) Title V of the Housing Act of 1949, as amended; and (5) any other similar present or future federal, state, or municipal legislation, or the regulations promulgated under any of those acts, and that satifies the requirements of M.S. Sections 469.1761. A district will qualify as a housing district if in addition to the income limitations set forth below no more than 20% of the square footage of buildings that receive assistance from tax increments consist of commercial, retail, or other non-residential uses. Revenue derived from tax increment from a housing district must be used solely to finance the cost of housing projects as defined in Section 469.174, subdivision 11. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the Authority may be included in the cost of a housing project. In addition, in order to qualify as a housing district certain income limitations must be satisfied. The following requirements apply to residential property receiving assistance financed by tax increments: (1) Owner occupied residential property. 95% of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section l43(f) of the Internal Revenue Code. City of Prior Lake, Minnesota 7 Article IV - Tax Increment Financing Plan NORTH I.ANOtSECU RI TI E (2) Residential rental property. The property must satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. A property also satisfies the requirements of section 142 (d) if 50 percent of the residential units in the project are occupied by individuals whose income is 80 percent or less of the area median gross income. The above income limitations apply for the duration of the tax increment fmancing district. Failure to comply with these income limitations is subject to Section 469.1771. The TIF District qualifies as a housing district in that it meets all of the criteria listed above. It is anticipated that 100% of the planned improvements in the TIF District will be for low and moderate income housing purposes. Section 4.05 Duration of the TIF District Housing districts may remain in existence 25 years from the date of receipt of the first tax increment. Modifications of this plan shall not extend these limitations. The Authority reserves the right to allow the TIF District to remain in existence the maximum duration allowed by law (projected to be through the year 2034) though intends to decertify the TIF District at an earlier date, projected to be following the taxes payable 2023 collection. All tax increments from taxes payable in the year the TIF District is decertified shall be paid to the Authority. Section 4.06 Specific Development Expected to Occur Within the TIF District See Exhibit IA & lB. The City intends to enter into a contract with Shepherd's Path Senior Housing regarding their proposal to develop approximately 154 senior housing rental units within the City and the TIF District boundaries described in Exhibit IA. This will break down to 82 independent units, 54 assisted-living units and 18 dementia units. The facility will provide affordable housing that is currently lacking within the City. The project will be part of a larger development. There have been no contracts entered into for the proposed development at this time. The entire project should be 100% assessed and on the tax rolls as of January 2, 2008 for taxes payable in 2009. Section 4.07 Parcel(s) to be Included in the TIF District The property to be included in the TIF District includes an undeveloped portion of land located within the City. The boundaries of the TIF District are reflected on a map attached as Exhibit IA. The following parcel identification number(s) (PID#'s) and corresponding legal description(s), along with adjacent rights-of-way, will be included in the TIF District: See Exhibit IB for the PID#'s and legal description ofthe parcels. Section 4.08 Property to be Acquired in the TIF District Shepherd's Path currently owns all of the property within the TIF district. The City reserves the right to reimburse the developer for TIF eligible costs as specified in Section 4.10 and Exhibit II. City of Prior Lake, Minnesota 8 Article IV - Tax Increment Financing Plan NORTHLANotSECURITlE Section 4.09 Findings and Need for Tax Increment Financing Pursuant to Minnesota Statutes, the City makes the following findings in conjunction with the approval of this tax increment fmancing plan: (1) Tax Increment Financing District No. 6-1 is a housing district as defmed in Minnesota Statutes, Section 469.174, Subd. 11. The reasons and supporting facts for this determination will be documented in writing and retained and made available to the public by the City until the district has been terminated. The determination is described in Section 4.04 of this TIF Plan. (2) The proposed development or redevelopment, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future, and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the TIF Plan; The reasons supporting this finding are that: (i) Shepherd's Path has represented to the City in writing that it would not be viable to undertake the proposed development without tax increment financing assistance. Due to the current revenue and expense structure funding would not be available for this project without public assistance; and (ii) A comparative analysis of estimated market values both with and without establishment of the TIF District and the use of tax increments has been performed as described above and is shown in Exhibit V. This analysis indicates that the increase in estimated market value of the proposed development (less the present value of the projected tax increments for the maximum duration permitted by the TIF Plan) exceeds the estimated market value of the site prior to the establishment of the TIF District. (3) The Tax Increment Financing Plan for Tax Increment Financing District No. 6-1 conforms to the general plan for development or redevelopment of the City of Prior Lake as a whole. The reasons for supporting this finding are that: a. Tax Increment Financing District No. 6-1 is properly zoned; and b. The Tax Increment Financing Plan will generally compliment and serve to implement policies adopted in the City's comprehensive plan. The TIF Plan has been adopted by the City Planning Commission after review and making the determination that the TIF Plan complies with the City's comprehensive plan. (4) The Tax Increment Financing Plan will afford maximum opportunity, consistent with the sound needs of the City of Prior Lake as a whole, for the development or redevelopment of Municipal Development District No.6, as modified, by private enterprise. City of Prior Lake, Minnesota 9 Article IV - Tax Increment Financing Plan NORTHlANDtSECURITlE The reasons supporting this finding are that: The City fmds that the development activities are necessary so that development and redevelopment by private enterprise can occur within the Project Area, including but not limited to, the proposed Shepherd's Path project. Section 4.10 Estimated Sources of RevenuelPublic Costs The estimated sources of revenue, along with the estimated public costs of the TIP District, are itemized and attached as Exhibit II. Such costs are eligible for reimbursement from tax increments, and other listed sources of revenue from the TIF District. The Authority reserves the right to administratively adjust the amount of any of the items in Exhibit II or to incorporate additional eligible items, so long as the total estimated public cost (uses) is not increased. The Authority anticipates providing financial assistance to the proposed development through the use of a pay-as-you-go technique. As tax increments are collected from the TIF District in future years, a portion of these taxes will be reimbursed to the developer for TIF eligible costs. The Authority reserves the right to fmance any or all public costs of the TIF District using pay-as-you-go assistance, internal funding, general obligation or revenue debt, or any other financing mechanism authorized by law. The Authority also reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such costs including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income. Section 4.11 Estimated Amount of Bonded Indebtedness The Authority does not anticipate issuing tax increment bonds to finance the estimated public costs of the TIF District, but reserves the right to issue such bonds in an amount not to exceed $6,186,000. Section 4.12 Original Net Tax Capacity Upon or after adoption of the tax increment plan, the County Auditor, upon request of the Authority, shall certify the original net tax capacity of the TIF District. This value will be equal to the total net tax capacity of all property in the TIF District as certified by the Commissioner of Revenue plus any amount determined under M.S. Section 469.177 subd. 4. For districts certified between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts certified between July 1 and December 31, inclusive, this value is based on the current assessment year. This will be based on the Estimated Market Value of all property within the TIF District as of January 2, 2005, for taxes payable in 2006 which is estimated to be $315,200. Upon establishment of the TIF District it is estimated that the original net tax capacity of the TIF District will be approximately $3,940. Reclassification of property will be incorporated into this calculation. City of Prior Lake, Minnesota 10 Article IV - Tax Increment Financing Plan NORTHLANotSECURITlE Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as a result of: (1) changes in the tax-exempt status of property; (2) reductions or enlargements of the geographic area of the TIP District; (3) changes due to stipulation agreements or abatements; or (4) changes in property classification rates. Section 4.13 Original Tax Capacity Rate At the time of the initial certification of the original net tax capacity for the tax increment financing district, the County Auditor shall certify the original local tax capacity rate that applies to the TIF District. This is the sum of all the local tax rates that apply to the property in the TIF District. This rate certified is the rate in effect for the same taxes payable year as the certified original net tax capacity. The tax generated by the extension of the lesser of (a) the local taxing district tax rates or (b) the original local tax capacity rate, to the retained captured net tax capacity of the TIF District is the tax increment. The sum of all local tax rates that apply to property in the TIF District, for taxes levied in 2005 and payable in 2006, is 105.733%. The County Auditor shall certify this amount as the original tax capacity rate of the TIF District. For purposes of estimating the tax increment generated by the TIF District, the sum of the local tax rates for taxes levied in 2005 and payable in 2006, is 105.733% as shown below: Taxing Jurisdiction 2005/2006 Local Tax Rate City of Prior Lake Scott County Independent School District No. 719 Other 31.305% 34.099% 33.311% 7.018% Total 105.733% Section 4.14 Projected Retained Captured Net Tax Capacity and Projected Tax Increment Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax capacity of the TIF District. The County Auditor shall certify to the Authority the amount of captured net tax capacity each year. The Authority may choose to retain any or all of this amount. It is the Authority's intention to retain 100% of the captured net tax capacity of the TIF District. Such amount shall be known as the retained captured net tax capacity of the TIF District. Exhibit III gives a listing of the various information and assumptions used in preparing a number of the exhibits contained in this TIF Plan, including Exhibit IV, which shows the projected tax increment generated over the anticipated life of the TIF District. City of Prior Lake, Minnesota 11 Article IV - Tax Increment Financing Plan NORTHI.ANDtSECURITlE Section 4.15 Use of Tax Increment Each year the County Treasurer shall deduct 0.36% of the annual tax increment generated by the TIF District and pay such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of fmancial reporting and auditing of tax increment fmancing information throughout the state. Exhibit IV shows the projected deduction for this purpose over the anticipated life of the TIF District. The Authority has determined that it will use the remaining tax increment generated by the portion of the captured net tax capacity specified above (See Section 4.14) for any of the following purposes: (1) pay for the estimated public costs of the TIF District (see Section 4.10) and County administrative costs associated with the TIF District (see Section 4.20); (2) pay principal and interest on tax increment bonds or other bonds issued to finance the estimated public costs of the TIP District; (3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to fmance the estimated public costs of the TIF District; (4) pay all or a portion of the county road costs as may be required by the County Board under M.S. Section 469.175, Subdivision 1a (see Section 4.17); or (5) return excess tax increments to the County Auditor for redistribution to the City, County and School District. Tax increments from property located in one county must be expended for the direct and primary benefit of a project located within that county, unless both county boards involved waive this requirement. Tax increments shall not be used to circumvent levy limitations applicable to the City. Tax increment shall not be used to fmance the acquisition, construction, renovation, operation, or maintenance of a building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any other local unit of government or the State or federal government, or for a commons area used as a public park, or a facility used for social, recreational or conference purposes. This prohibition does not apply to the construction or renovation of a parking structure, or a privately owned facility for conference purposes. If there exists any type of agreement or arrangement providing for the developer, or other beneficiary of assistance, to repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be subject to all of the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the cost of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate subsidies, utility service connections, roads, or other similar assistance that would otherwise be paid for by the developer or beneficiary. Section 4.16 Excess Tax Increment In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated public costs authorized by the TIF Plan, the Authority shall use the excess tax increments to: (1) prepay any outstanding tax increment bonds; (2) discharge the pledge of tax increments thereof; City of Prior Lake, Minnesota 12 Article IV - Tax Increment Financing Plan NORTHI.ANotSECURITIE~ (3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or (4) return excess tax increments to the County Auditor for redistribution to the City, County and School District. The County Auditor must report to the Commissioner of Education the amount of any excess tax increment redistributed to the School District within 30 days of such redistribution. Section 4.17 County Road Costs The County Board may require the Authority to pay all, or a portion of, the cost of county road improvements out of increment revenues, if the following conditions occur: (1) the proposed development will, in the judgment of the county, substantially increase the use of county roads requiring construction of road improvements or other road costs; and (2) the road improvement or other road costs are not scheduled for construction within five years under the county capital improvement plan, or another formally adopted county plan and in the opinion of the county, would not reasonably be expected to be needed within the reasonably foreseeable future if the TIF plan were not implemented. If the county elects to use tax increments to finance the road improvements, the county must notify the Authority and municipality within 45 days after receipt of the proposed TIF plan under subdivision 2 and the county and municipality must comply with the terms in M.S. Section 469.175, subd. 2(b). Section 4.18 Four-Year Rule - Limitation on Property Not Subject to Improvements If after four years from certification of the TIF District no demolition, rehabilitation, renovation or site improvement, including a qualified improvement of an adjacent street, has commenced on a parcel located within the TIP District, then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial reconstruction or rebuilding of an existing street. The Authority must submit to the County Auditor, by February 1 of the fifth year, evidence that the required activity has taken place for each parcel in the TIF District. If a parcel is excluded from the TIF District and the Authority or owner of the parcel subsequently commences any of the above activities, the Authority shall certify to the County Auditor that such activity has commenced and the parcel shall once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF District. Section 4.19 Five-Year Rule - Tax Increment Pooling 100% of the tax increments (net of administrative expenses) from the TIF District must be expended on activities within the district or to pay for bonds used to fmance the estimated public costs of the TIF District (see Section 4.04 for additional restrictions). All administrative expenses are considered to have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF District if such amounts are: (1) actually paid to a third party for activities performed within the TIF District within five years after certification of the district; (2) used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably expected on the date of issuance to be spent within the later of the five-year City of Prior Lake, Minnesota 13 Article IV - Tax Increment Financing Plan NORTHLANotSECURITlE period or a reasonable temporary period or are deposited in a reasonably required reserve or replacement fund. (3) used to make payments or reimbursements to a third party under binding contracts for activities performed within the TIF District, which were entered into within five years after certification of the district; or (4) used to reimburse a party for payment of eligible costs (including interest) incurred within five years from certification of the district; or (5) in the case of a housing district, used for a housing project, as defined in section 469.174, subdivision 11. Beginning with the sixth year following certification of the TIP District, at 100% of the tax increments must be used to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding bonds have been defeased and sufficient money has been set aside to pay for such contractual obligations, the TIF District must be decertified. The Authority may also elect to increase by up to ten percentage points the permitted amount of expenditures for activities located outside of the geographic area of the district. As permitted by M.S. Section 469.176, subdivision 4k, the expenditures, including the prior permitted expenditures, need not be made within the geographic area of the project if the expenditures: (1) are used exclusively to assist housing that meets the requirement for a qualified low- income building, as that term is used in Section 42 of the Internal Revenue Code; (2) do not exceed the qualified basis of the housing, as defmed under Section 42 (c) of the Internal Revenue Code, less the amount of any credit allowed under Section 42 of the Internal Revenue Code; and (3) be used to: a) acquire and prepare the site of the housing; b) acquire, construct, or rehabilitate the housing; or c) make public improvements directly related to the housing. City of Prior Lake, Minnesota 14 Article IV - Tax Increment Financing Plan NORTHLANOOSECURITlE Section 4.20 Limitation on Administrative Expenses Administrative expenses are defined as all costs of the Authority other than: (1) amounts paid for the purchase of land; (2) amounts paid for materials and services, including architectural and engineering services directly connected with the proposed development within the TIF District; (3) relocation benefits paid to, or services provided for, persons or businesses residing or located within the TIF District; or (4) amounts used to pay interest on, fund a reserve for, or sell at a discount, tax increment bonds. Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, planning or economic development consultants, and actual costs incurred by the County in administering the TIF District. Tax increments may be used to pay administrative expenses of the TIF District up to the lesser of (a) 10% of the total estimated tax increment expenditures authorized by the TIF Plan or (b) 10% of the total tax increments from the district. Section 4.21 Estimated Impact on Other Taxing Jurisdictions Exhibit V shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The Authority believes that there will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed development would not have occurred without the establishment of the TIF District and the provision of public assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the development therein becomes part of the general tax base. The City of Prior Lake anticipates minimal impact of the Shepherd's Path TIF District No. 6-1 on city- provided services. There will be no borrowing costs to the City for the project. A slight increase in water and sewer usage is expected and has been accommodated by continual monitoring and correction of inflow and infiltration issues. It is anticipated that there may be a slight but manageable increase in police and fire protection duties due to the development. Section 4.22 Prior Planned Improvements The Authority shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a listing of all properties within the TIF District for which building permits have been issued during the 18 months immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the TIF District by the net tax capacity of each improvement for which a building permit was issued. There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. City of Prior Lake, Minnesota 15 Article IV - Tax Increment Financing Plan NORTHI.ANDtSECURITlE Section 4.23 Development Agreements No more than 10%, by acreage, of the property to be acquired within a project containing a housing district may be purchased by the City with the proceeds of bonds issued pursuant to M.S. 469.178 to which tax increment from the property being acquired is pledged unless prior to acquisition the City has entered into an agreement for development which provides recourse for the property should the development or redevelopment not be completed. The City intends to enter into an agreement for development. Section 4.24 Assessment Agreements The Authority may, upon entering into a development agreement, also enter into an assessment agreement with the developer, which establishes a minimum market value of the land and improvements for each year during the life of the TIF District. The assessment agreement shall be presented to the County or City Assessor who shall review the plans and specifications for the improvements to be constructed, review the market value previously assigned to the land, and so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate, shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the office of the County Recorder of each county where the property is located. Any modification or premature termination of this agreement must first be approved by the City, County and School District. The City does not intend to enter into an assessment agreement. Section 4.25 Modifications of the Tax Increment Financing Plan Any reduction or enlargement in the geographic area of the Project Area or the TIF District; increase in the amount of bonded indebtedness to be incurred; increase in the amount of capitalized interest; increase in that portion of the captured net tax capacity to be retained by the Authority; increase in the total estimated public costs; or designation of additional property to be acquired by the Authority shall be approved only after satisfying all the necessary requirements for approval of the original TIF Plan. This paragraph does not apply if: (1) the only modification is elimination of parcels from the TIF District; and (2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of those parcels in the TIF District's original net tax capacity, or the Authority agrees that the TIF District's original net tax capacity will be reduced by no more than the current net tax capacity of the parcels eliminated. The Authority must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of certification. City of Prior Lake, Minnesota 16 Article IV - Tax Increment Financing Plan NORTHLANDOSECURITIE Section 4.26 Administration of the Tax Increment Financing Plan Upon adoption of the TIF Plan, the Authority shall submit a copy of such plan to the Minnesota Department of Revenue and the Office of the State Auditor. The Authority shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the Authority shall submit copies of the TlF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. The Authority shall also send the County Assessor any assessment agreement establishing the minimum market value of land and improvements in the TlF District, and shall request that the County Assessor review and certify this assessment agreement as reasonable. The County shall distribute to the Authority the amount of tax increment as it becomes available. The amount of tax increment in any year represents the applicable property taxes generated by the retained captured net tax capacity of the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other development, inflation of property values, or changes in property classification rates or formulas. In administering and implementing the TIF Plan, the following actions should occur on an annual basis: (1) prior to July I, the Authority shall notify the County Assessor of any new development that has occurred in the TIF District during the past year to insure that the new value will be recorded in a timely manner. (2) if the County Auditor receives the request for certification of a new TIF District, or for modification of an existing TIF District, before July 1, the request shall be recognized in determining local tax rates for the current and subsequent levy years. Requests received on or after July 1 shall be used to determine local tax rates in subsequent years. (3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF District. The amount certified shall reflect any changes that occur as a result of the following: a) the value of property that changes from tax-exempt to taxable shall be added to the original net tax capacity of the TIF District. The reverse shall also apply; b) the original net tax capacity may be modified by any approved enlargement or reduction of the TIF District; c) if laws governing the classification of real property cause changes to the percentage of estimated market value to be applied for property tax purposes, then the resulting increase or decrease in net tax capacity shall be applied proportionately to the original net tax capacity and the retained captured net tax capacity of the TIF District. The County Auditor shall notify the Authority of all changes made to the original net tax capacity of the TIF District. City of Prior Lake, Minnesota 17 Article IV - Tax Increment Financing Plan NORTHLANDtSECURITlE Section 4.27 Financial Reporting and Disclosure Requirements The State Auditor shall enforce the provisions of the TIF Act and shall have full responsibility for financial and compliance auditing of the Authority's use of tax increment financing. On or before August 1 of each year, the Authority must annually submit to the State Auditor, County Auditor and to the governing body of the municipality a report which shall: (1) provide full disclosure of the sources and uses of public funds in the TIF District; (2) permit comparison and reconciliation of the accounts and financial reports; (3) permit auditing of the funds expended on behalf of the TIF District; and (4) be consistent with generally accepted accounting principles. The report shall include, among other items, the following information: (1) the original net tax capacity of the district and any subdistrict under 469.177, subdivision 1; (2) the net tax capacity for the reporting period of the district and any subdistrict; (3) the captured net tax capacity of the district; (4) any fiscal disparity deduction from the captured net tax capacity under section 469.177, subdivision 3; (5) the captured net tax capacity retained for tax increment fmancing under 469.177, subdivision 2, paragraph (a), clause (1); (6) any captured net tax capacity distributed among affected taxing districts under 469.177, subdivision 2, paragraph (a), clause (2); (7) the type of district; (8) the date the municipality approved the tax increment fmancing plan and the date of approval of any modification of the tax increment financing plan, the approval of which requires notice, discussion, a public hearing, and findings under subdivision 4, paragraph (a); (9) the date the Authority first requested certification of the original net tax capacity of the district and the date of request for certification regarding any parcel added to the district; (10) the date the county auditor first certified the original net tax capacity of the district and the date of certification of the original net tax capacity of any parcel added to the district; (11) the month and year in which the Authority has received or anticipates it will receive the first increment from the district; (12) the date the district must be decertified; (13) for the reporting period and prior years of the district, the actual amount received from, at least, the following categories: City of Prior Lake, Minnesota 18 Article IV - Tax Increment Financing Plan NORTHl^NOOSECU RITlE a) tax increments paid by the captured net tax capacity retained for tax increment financing under section 469.177, subdivision 2, paragraph (a), clause (1), but excluding any excess taxes; b) tax increments that are interest or other investment earnings on or from tax increments; c) tax increments that are proceeds from the sale or lease of property, tangible or intangible, purchased by the Authority with tax increments; d) tax increments that are repayments of loans or other advances made by the Authority with tax increments; e) bond or loan proceeds; f) special assessments; g) grants; h) transfers from funds not exclusively associated with the district; and i) the market value homestead credit paid to the Authority under M.S. Section 273.1384; (14) for the reporting period and for the prior years of the district, the amount budgeted under the tax increment financing plan, and the actual amount expended for, at least, the following categories: a) acquisition ofland and buildings through condemnation or purchase; b) site improvements or preparation costs; c) installation of public utilities, parking facilities, streets, roads, sidewalks, or other similar public improvements; d) administrative costs, including the allocated cost of the Authority; and e) public park facilities, facilities for social, recreational, or conference purposes, or other similar public improvements; and f) transfers to funds not exclusively associated with the district; (15) the amount of any payments for activities and improvements located outside of the district that are paid for or financed with tax increments; (16) the amount of payments of principal and interest that are made during the reporting period on any non-defeased: a) general obligation tax increment financing bonds; b) other tax increment fmancing bonds; and c) notes and pay-as-you-go contracts; City of Prior Lake, Minnesota 19 Article IV - Tax Increment Financing Plan NORTHLANOOSECURITIE (17) the principal amount, at the end of the reporting period, of any non-defeased: a) general obligation tax increment financing bonds; b) other tax increment fmancing bonds; and c) notes and pay-as-you-go contracts; (18) the amount of principal and interest payments that are due for the current calendar year on any non-defeased: a) general obligation tax increment financing bonds; b) other tax increment fmancing bonds; and c) notes and pay-as-you-go contracts; (19) if the fiscal disparities contribution under chapter 276A or 473F for the district is computed under section 469.177, subdivision 3, paragraph (a). the amount of increased property taxes imposed on other properties in the municipality that approved the tax increment financing plan as a result of the fiscal disparities contribution; (20) the estimate, if any, contained in the tax increment fmancing plan of the amount of the cost of the project, including administrative expenses, that will be paid or fmanced with tax increment; (21) any additional information the state auditor may require. The Authority must also annually publish in a newspaper of general circulation in the City an annual statement for each tax increment fmancing district showing: (1) the original net tax capacity of the district and any subdistrict under 469.177, subdivision 1; (2) the net tax capacity for the reporting period of the district and any subdistrict; (3) the captured net tax capacity ofthe district; (4) the month and year in which the Authority has received or anticipates it will receive the first increment from the district; (5) the date the district must be decertified; (6) the amount of principal and interest payments that are due for the current calendar year on any non-defeased obligations; (7) if the fiscal disparities contribution under chapter 276A or 473F for the district is computed under section 469.177, subdivision 3, paragraph (a). the amount of increased property taxes imposed on other properties in the municipality that approved the tax increment financing plan as a result of the fiscal disparities contribution; (8) the amounts of tax increment received and expended in the reporting period; (9) and any additional information the Authority deems necessary. City of Prior Lake, Minnesota 20 Article IV - Tax Increment Financing Plan NORTHLANotSECURITlE The annual statement must inform readers that additional information regarding each district may be obtained from the Authority, and must explain how the additional information may be requested. The Authority must publish the annual statement for a year no later than August 15 of the next year. The Authority must identify the newspaper of general circulation in the municipality to which the annual statement has been or will be submitted for publication and provide a copy of the annual statement to the county board, county auditor, the school board, the state auditor, and the governing body of the municipality on or before August 1 of the year in which the statement must be published. The reporting and disclosure requirements outlined in this section shall begin with the year the district was certified, and shall end in the year in which both the district has been decertified and all tax increments have been spent or returned to the county for redistribution. Failure to meet these requirements, as determined by the State Auditors Office, may result in suspension of distribution of tax increment. City of Prior Lake, Minnesota 21 Article IV - Tax Increment Financing Plan NORTHLANDOSECURITlE Section 4.28 Business Subsidy Compliance The City, or other local government agency, must comply with the business subsidies law when providing business subsidies to private entities. The requirements are specified in Minnesota Statutes, Sections l16J.993 to l16J.995. The City must adopt business subsidy criteria prior to granting a business subsidy. The requirements include: (1) the grantor must adopt the criteria following a public hearing; (2) the criteria may not be adopted on a case-by-case basis; (3) the criteria must set specific minimum requirements that recipients must meet in order to be eligible to receive business subsidies; (4) the criteria must include a specific wage floor for the wages to be paid for the jobs created. The wage floor may be stated as a specific dollar amount or a formula that will generate a specific dollar amount (5) a grantor may deviate from its criteria by documenting in writing the reason for deviation and attaching a copy of the document to its next annual report to the Department of Trade and Economic Development; (6) a copy of the criteria must be submitted to the Department of Trade and Economic Development. In addition, the City must enter into a subsidy agreement with the recipient of the subsidy. For subsidies greater than $100,000 the grantor must provide public notice and a hearing on the subsidy. The subsidy agreement must include: (1) a description of the subsidy, including the amount and type of subsidy, and type of district if the subsidy is tax increment fmancing; (2) a statement of the public purpose for the subsidy; (3) measurable, specific, and tangible goals for the subsidy; (4) a description of the financial obligation of the recipient if the goals are not met; (5) a statement of why the subsidy is needed; (6) a commitment to continue operations in the jurisdiction where the subsidy is used for at least five years after the benefit date; (7) the name and address of the parent corporation ofthe recipient, if any; and (8) a list of all financial assistance by all grantors for the project. The statute provides specific requirements in the event the subsidy agreement goals are not met by the recipient. Recipients are required to report to the grantor specific information as defined in statute. The grantor is also required, as specified in the statute, to report specific information annually to the Department of Trade and Economic Development. Because the intended subsidy for the project specified in this document is anticipated to be 100% for housing assistance it is exempt from the requirements of Minnesota Statutes U6J.993 to 116J.99S. City of Prior Lake, Minnesota 22 City of Prior Lake, Minnesota GO Bonds of 2006 PRIOR LAKE BQ ANALYSIS FI I SINGLE PURPOSE I 612112006 I 11 :24 AM Northland Securities Public Finance EXHIBIT I - Municipal Dev. District No.6 NORTHLANDOSECURITI ES The boundaries of Municipal Development District No.6 are coterminous with TIF District No. 6-1. DESCRJP1K)N SKETCH R:B Sl-EPHERDS PA 1H PROPOSED PARCEL CE!3CRlFlllCN Lot 2. Block .2. SH EPHERD'S PATH ADDITION. ac:cDrdlng to thll I"IIcan:llld plat ~..reDf. Scott County. ....inn..lICIta. AREt\-.357.88. SQ. FT. lOr 8.21 ..... BIB N88~.47~ 405. 58 Ar::. ...... Iia4D NBS '-D'20 'E .121. It ,~v~ .~ tP . . i :;-t Ir-Dr tr-OM~.:-" .;jr-J r:::. I (7 L., l U ..:::J f'J r..; ~ . . i I R "'= is t .....'T'" " ~ '-.....t ..:.. f ? ~ II """'TY ...... C- ~ .....u t L.L..' 1 . C) II -., r J 1 n I rl .... ii'"- ~ J ...,.,.. .II r. L..' r t ~ ]:;, ( ..., ,..,~t" ~ r....L.v_r' PARK 279.lJ5 WE:5T I ADD/TID/V ...:nBW J'I:M8 LANE I N'n~T n T VVI'-.....t u L -L --.rJ COlMTY IfQAD IG. (IIID1H tlI. ,1 EXHIBIT IA - Tax Increment Financio2 District NORTHLAND.SECURITlES TIF District No. 6-1 DElIC/P1K)/f/ 8ItE1f:H FOB SI-EF'fERD'S.PATH PlClPcsm PARCn N:'W!RIP'naN Let 2. 81ack 2. ..SHfPHEfID'5 PATH ADmTION.. ........ to thll nlGardlld plat v...... SaItt Ctl:IuntJ. MiA Jt:iatD. ~.... so.FT.. CI' ..21 All:. ~ 4Gl!l. a:I1D NU"arZQIF , .~~ , ....,. ,," I -, 1C"t:)L''''''a'''''>> -. t ~r'l'-.. . rJc.nL.l ;:)~ , J ",,. . L&.II r i!: Qr 1"'1'."''' , ~r._v""", t a.... ., L t " ., '" ZlII.lNI .- WEST FJAnf PARK I --.d - DDIIII'rIltJlltD M:I. {IIIIIIH ...... d I ~ ~.1 'I la J I ~ I lit i,.,., ""'T I..t'U ,. LLot c- ~ I AD/JITtON .a8IWJI:MIt I.ME lotfn.or D T L -L EXHmIT IB - Property Description NORTHLANDOSECURITl.ES PID# A Parcel ID# has not yet been assigned to this property as replatted. TIF District 6-1 is comprised of a portion of the PID# 25-922004-3. Legal Description Lot 2, Block 2, Shepherd's Path Addition, according to the recorded plat thereof, Scott County, Minnesota. EXHIBIT II - Sources & Uses Statement NORTHLAND.SECURITIES City of Prior Lake Tax Increment Financing (Housing) District No. 6-1 Shepherd's Path Project Sources of Funds Tax increment revenue $6,186,000 Interest on invested funds 0 Bond proceeds 0 Loan Proceeds 0 Real estate sales 0 Special assessments 0 Rent/lease revenue 0 Grants 0 Other (describe) 0 Transfers in 0 Total Sources of Funds $6,186,000 Uses of Funds Land/building acquisition $0 Site improvements/preparation costs 2,388,000 Installation of public utilities 0 Parking facilities 0 Streets and sidewalks 0 Public park facilities 0 Social, recreational, conference facilities 0 Interest reduction payments 0 Bond principal payments 0 Bond interest payments 0 Loan principal payments 0 LOmVnoteinterestpayments 2,534,000 Administrative expenses 617,000 Capitalized Interest 624,000 Transfers out (State Auditor) 23,000 Total Uses of Funds $6,186,000 Prepared by: Northland Securities, Inc. - 6/21/200612:44 PM TIF 061506 for printSource&Use EXHIBIT III - TIF District Assumptions NORTHLAND.SECURITIES City of Prior Lake Tax Increment Financing (Housing) District No. 6-1 Shepherd's Path Project Certification Request Date 08/01/06 Decertification Date 12/01/23 (15 Years ofIncrement) Present Value Date 08/01/06 Present Value Rate 7.00% Type of TIF District: Housing Type of Debt: Bonds (Tax-Exempt) Fiscal Disparities Election: NA Fiscal Disparities Rate: 0.0000% Local Tax Capacity Rate: 105.733% 2005/06 Administration: 10.00% Pooling/Sharing: 0.00% Percentage of Tax Capacity Retained: 100.00% Market Value Inflator: 100.00% Base Value Information 2006/2007 2006/2007 2006/2007 CLASS RATE CLASS RATE 2006/2007 Class PID# EMV 1st Tier 2nd Tier NTC REN 25-922004-3 315,200 1.25% 1.25% 3,940 REN xxx 0 1.25% 1.25% 0 Total 315,200 3,940 2007/2008 2008/2009 2009/2010 2010/2011 Base EMV $315,200 $315,200 $315,200 $315,200 Increase in EMV Project 1 315,200 31,500,000 31,500,000 31,500,000 Project 2 0 0 0 0 Project 3 0 0 0 0 Project 4 0 0 0 0 Total Estimated Market Value $630,400 $31,815,200 $31,815,200 $31,815,200 NTC Project 1 REN 3,940 393,750 393,750 393,750 Project 2 REN 0 0 0 0 Project 3 REN 0 0 0 0 Project 4 REN 0 0 0 0 Total Net Tax Capacity $3,940 $393,750 $393,750 $393,750 Prepared by: Northland Securities, Inc. - 6/21/2006 12:44 PM TIF 061506 for print - Assumptions EXHIBIT IV - Projected Tax Increment Cash Flow NORTHLAND_SHeu Rlt I ES ke g) District No. 6-1 ro . ect Less: Less: Retained Annual School Less: Less: Less: Annual Total Base Fiscal Captured Gross Tax City County District Other State Admin. Additional Annual Period Net Tax Net Tax Disp.@ Net Tax Increment @ @ @ @ Aud. Ded. Retainage Pooling Net Tax Ending Capacity Capacity 0.00% Capacity 105.733% 31.305% 34.099% 33.311% 7.018% 0.36% 10.00% 0.00% Increment 12131/07 3,940 3,940 0 0 0 0 0 0 0 0 0 0 0 12/31/08 3,940 3,940 0 0 0 0 0 0 0 0 0 0 0 12131/09 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/10 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/11 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/12 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/13 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/14 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/15 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/16 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/17 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/18 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 . 12131/19 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/20 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/21 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/22 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/23 393,750 3,940 0 389,810 412,158 122,030 132,921 129,850 27,357 1,484 41,067 0 369,607 12131/24 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/25 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/26 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/27 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/28 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/29 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/30 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/31 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/32 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/33 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/34 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 12131/35 393,750 393,750 0 0 0 0 0 0 0 0 0 0 0 6,182,370 1,830,450 1,993,820 1,947,744 410,353 22,260 616,005 0 5,544,105 Prepared by: Northland Securities, Inc. - 6/21/2006 12:44 PM TIF 061506 for print - TaxlncAnn EXHIBIT V - Projected Tax ImpactlMarket Value Analysis NORTHI.ANI>.SE.CURlTl E.~ City ofPrlor Lake Tax Increment Financing (Housing) District No. 6-1 Shenherd's Path Prolect Estimated Impact on Other Taxing Jurisdictions City of Scott I.S.D. #719 Prior Lake County Prior Lake Other 21,522,699 118,094,536 36,668,810 NA 389,810 389,810 389,810 0 21,912,509 118,484,346 37,058,620 NA 31.305% 34.099% 33.311% 7.018% 30.748% 33.987% 32.961% 7.018% 0.557% 0.112% 0.350% NA 119,859 132,484 128,484 NA Total Total Taxable NTC 2005/2006 Projected Retained NTC Hypothetical New NTC Existing Local Tax Rate 2005/2006 Hypothetical Adj. Local Tax Rate Difference Hypothetical Taxes on Retained NTC 176,286,045 105.733% 104.714% 1.019% Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each of the taxing jurisdictions above, the result would be a lower local tax rate (see Hypothetical Adjusted Tax Rate above) which would produce the same amount of taxes for each taxing jurisdiction. In such a case, the total local tax rate would decrease by 1.019% (see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that the Retained Captured Net Tax Capacity oCthe TIP District would generate is also shown above. Statement 2: Since the projected Retained Captured Net Tax Capacity oCthe TIF District is not available to the taxing jurisdictions, then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity = total net tax capacity - captured TIP - Fiscal Disparities Contribution (2) The impact on these taxing jurisdictions is negligible since they represent only 6.64% of the total tax rate. Annual Present Gross Tax Value @ Year Increment 7.00% I 2008 0 0 2 2009 412,158 332,671 3 2010 412,158 310,908 4 2011 412,158 290,568 5 2012 412,158 271 ,559 6 2013 412,158 253,793 7 2014 412,158 237,190 8 2015 412,158 221,673 9 2016 412,158 207,171 10 2017 412,158 193,618 11 2018 412,158 180,951 12 2019 412,158 169,113 13 2020 412,158 158,050 14 2021 412,158 147,710 15 2022 412,158 138,047 16 2023 412,158 129,016 17 2024 412,158 120,575 18 2025 412,158 112,687 19 2026 412,158 105,315 20 2027 412,158 98,425 21 2028 412,158 91,986 22 2029 412,158 85,969 23 2030 412,158 80,344 24 2031 412,158 75,088 25 2032 412,158 70,176 26 2033 412,158 65,585 27 2034 412,158 61,294 28 2035 0 0 10,716,108 4,209,482 Prepared by: Northland Securities, Inc. - 6/21/2006 12:44 PM Market Value Analysis Present Value Date Present Value Rate (Gross TIP) 08/01/06 7.00% Increase in EMV With TIP District Less: P.V of Gross Tax Increment $31,500,000 4,209,482 Subtotal Less: Increase in EMV Without TIP $27,290,518 o Difference $27,290,518 TIF 061506 for print - MVA-Impacl