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HomeMy WebLinkAbout07(A) - Resolution Approving Tax Increment Financing District No 1-6150 South Fifth Street, Suite 3300, Minneapolis, MN 55402 Main: (612) 851-5900 / Direct: (612) 851-4964 / Email: tomdal@northlandsecurities.com Member FINRA and SIPC | Registered with SEC and MSRB MEMORANDUM To: Casey McCabe, Community Development Director From: Tammy Omdal, Managing Director Date: October 26, 2022 Re: Proposed Tax Increment Financing District No. 1-6 (Prior Lake Lofts) The city received an application from Prior Lake B Squared Ventures, LLC (the “Developer”) for public financial assistance to assist with the construction by the Developer of an approximate 98-unit apartment building, a street front restaurant of approximately 2,600 square feet, a rooftop deck for restaurant customers, a separate rooftop deck for tenants, with 134 in-building parking stalls and 28 surface stalls (the “Project”). The Project is to be located on an approximate one-acre site located on Dakota Street SE adjacent to the Prior Lake City Hall (the “Property”). Subject to approval of the request for public financial assistance, the Developer plans to commence construction of the Project by June 1, 2023, and barring unavoidable delays the Project will be substantially completed by December 31, 2024. The cost for the Project is estimated at approximately $32 million (see Exhibit A), which is based on the Developer’s pro forma as of August 2022. The Developer’s request for public financial assistance is to assist with the extraordinary costs of redevelopment. The Developer has represented that it will not undertake the Project as proposed without public financial assistance. It is Northland’s opinion that the Project as proposed, which includes in-building parking, is unlikely to occur but for the proposed public financial assistance, inclusive of the tax increment financing (TIF). Without public financial assistance, the Project is not expected to achieve the level of debt service coverage and returns needed to secure the necessary private financing and equity. Without the enclosed parking, the Project as proposed would not be feasible and the density (number of housing units) would not be possible. Northland finds that it is reasonable for the city to consider public financial assistance for the Project as necessary so that development by private enterprise will occur on the Property. The Project, inclusive of the higher level of density, is possible only with the construction of the enclosed parking, which will not occur solely through private investment within the reasonably foreseeable future. Public Financial Assistance Due to the extraordinary costs associated with acquisition and development of the Project, the Developer is seeking public financial assistance from the city in the form pay-go tax increment financing assistance. The tax increment revenue is proposed to come from the establishment of a new Tax Increment Financing (Redevelopment) District No. 1-6 (the “TIF District”) within the modified Development District No. 1. Prior Lake TIF October 26, 2022 Page 2 Based on Northland’s analysis of the financial information provided by the Developer, the following terms for assistance to the Developer for the Project are proposed: TIF “pay-go” revenue note (the “TIF Note”) to be issued to reimburse of $3,000,000 of qualified costs for the Project plus interest at rate of 4.5% from the date of issue per annum to the earlier of maturity or prepayment. Project costs to be reimbursed include $1,176,000 for land acquisition and $1,824,000 for site improvements. Total estimated payments to the Developer over a period not to exceed 15 years is estimated to be approximately $4.4 million, including principal and interest payments. Proposed terms for assistance to the Developer will be subject to a Development Agreement (the “Agreement”) by and between the Developer and the city. The Agreement may be approved by the city council at any date following the approval of the resolution establishing the TIF District. The Agreement must be executed in advance of the Developer incurring project costs to be reimbursed from tax increments. TIF Note will be payable solely from net available semi-annual tax increments. TIF Note will not be a general obligation of the city. Net available semi-annual tax increments shall be based on 90% of the tax increment collected from the Project within the TIF District. TIF Note shall bear simple, non-compounding interest from the date that the city has determined paid invoices, as paid by the Developer, in compliance with the terms to be included in the Agreement. Property within the TIF District will not be subject to a minimum assessment agreement. The Developer will assume the risk that future tax increments will be sufficient to repay the TIF Note. City will retain 10% of the increment collected to repay itself for qualified costs of the Project, if any, and to cover administrative costs. After the termination date of the TIF Note, the city may retain 100% of the increment collected from the TIF District for the remaining duration of the TIF District, pursuant to the planning document for the TIF District and the TIF Act (TIF Act means Minnesota Statutes, Sections 469.174 through 469.1794, as amended). The draft Tax Increment Financing Plan for the TIF District (the “TIF Plan”) provides for a maximum 26 years of tax increment collection. The TIF Act provides for 25 years of tax increment collection after the first year of collection for a total of 26 years. Exhibit B provides a summary of the estimated tax increment cash flow from the TIF District available to reimburse the Developer for eligible costs for the Project over a 15-year term. Exhibit C provides a preliminary estimated sources and uses for the TIF, based on 15-year duration and 26-year duration. Review of Application for Assistance Northland conducted a review and analysis of the pro forma submitted by the Developer, along with other information provided by the city and the Developer. Northland reviewed project cost estimates to ensure all anticipated sources and uses for the Project were properly included. Exhibit B provides information on the sources and uses of funds for the Prior Lake TIF October 26, 2022 Page 3 Project. Based on a review of the pro forma for the Project and under current market conditions, we find that the Project, as proposed, may not reasonably be expected to occur solely through private investment within the reasonably near future. Due to the costs associated with redevelopment of the proposed site and site improvement costs, the Project as proposed is feasible only through assistance, in part, from TIF. Exhibit C provides a summary pro forma for the Project, as prepared by Northland. The conclusion on the need for the public financial assistance is supported by the following: The Developer plans for the approximate $32 million of project cost for the Project to be funded from a combination of debt (80%), equity (20%). The present value of the estimated future tax increment revenue from the TIF Note payments to the Developer reduces the effective cost of the Project by an additional $3.0 million, or nearly 10% of the total project costs. Based on estimated net operating income, the effective return without the public financial assistance is not at a level the Project would proceed. The total estimated cost per housing unit for the Project is $324,637 for the construction of 98 (luxury apartment) units, including the cost of the parking. The Project will include 16 studio units, 31 one-bedroom units, 9 one-bedroom plus den units, 39 two-bedroom units, and 3 two- bedroom plus den units. Based on market conditions and Northland's understanding of the Project and given the location, we find the estimated cost per unit to be reasonable. The estimated average gross monthly rent for the housing units, in the first stabilized year of the Project, is estimated at approximately $2,028 per month. The annual total gross rental income for the Project is estimated at $2,384,700 in the first year of stabilized occupancy, before adjusting for estimated apartment vacancy and rental loss of 5%. The estimated annual income from rental of the commercial-retail space is approximately $100,000. The total annual expense, including operating and non-operating costs, as well as management fees, is estimated at $6,654 per unit. This average estimated cost per unit is reasonable. The estimated average debt service coverage with tax increment financing is estimated to reach 1.21X in year six of stabilized operations, and without financial assistance is estimated to be 1.07X. The coverage for the mortgage without the tax increment, prior to year thirteen of the district, is not at a level that we would expect the Project to proceed. The financing of this type of project would be expected to be at a minimum of 1.2X coverage. The cash-on-cash return is projected to reach an estimated 9.4% by year ten of stabilized operations with financial assistance and 4.6% without assistance. Prior Lake TIF October 26, 2022 Page 4 Total % of Total Per Unit Sources of Funds First Mortgage $22,314,401 70.1%$227,698 Second Mortgage (TIF Note)$3,000,000 9.4%$30,612 Equity $6,500,000 20.4%$66,327 Total Sources of Funds $31,814,401 100.0%$324,637 Uses of Funds Land Acquisition $1,176,000 3.70%$12,000 Construction Costs $25,337,331 79.64%$258,544 Construction Loan Costs $541,434 1.70%$5,525 Cash Accounts $580,950 1.83%$5,928 Professional Services $1,381,747 4.34%$14,099 Closing Costs $75,210 0.24%$767 Entitlement Costs $965,230 3.03%$9,849 Developer Fee $1,568,000 4.93%$16,000 Marketing Fees $188,500 0.59%$1,923 Total Uses of Funds $31,814,401 100.00%$324,637 Number of Units 98 Square Feet of Commercial-Retail 2500 Prior Lake, MN EXHIBIT A The Beard Group Developer Sources and Uses of Funds for Construction 98 Unit Residential Apartment Building Prior Lake TIF October 26, 2022 Page 5 10.00%90.00%4.50% 1 2025 13,000,000 152,244 98.71% 149,744 14,974 134,770 126,543 2 2026 26,267,800 319,028 98.71% 313,788 31,379 282,409 380,173 3 2027 26,538,358 322,409 98.71% 317,114 31,711 285,403 625,335 4 2028 26,811,703 325,825 98.71% 320,474 32,047 288,427 862,310 5 2029 27,087,864 329,276 98.71% 323,868 32,387 291,481 1,091,371 6 2030 27,366,869 332,762 98.71% 327,297 32,730 294,568 1,312,782 7 2031 27,648,748 336,285 98.71% 330,762 33,076 297,686 1,526,798 8 2032 27,933,530 339,844 98.71% 334,262 33,426 300,836 1,733,665 9 2033 28,221,245 343,439 98.71% 337,799 33,780 304,019 1,933,621 10 2034 28,511,924 347,072 98.71% 341,372 34,137 307,234 2,126,897 11 2035 28,805,597 350,742 98.71% 344,982 34,498 310,483 2,313,715 12 2036 29,102,294 354,449 98.71% 348,628 34,863 313,766 2,494,291 13 2037 29,402,048 358,195 98.71% 352,313 35,231 317,082 2,668,833 14 2038 29,704,889 361,980 98.71% 356,036 35,604 320,432 2,837,541 15 2039 30,010,850 365,803 98.71% 359,796 35,980 323,816 3,000,611 TOTAL = 4,858,235 485,824 4,372,412 3,000,611 Key Asssumptions for Cash Flow: 1 2 3 4 5 6 Exhibit B Available TIF from District is after deductin the State Auditor fee of 0.36% of the total TIF from the Property. Present Value (PV) of Net Available TIF calculated based on semi-annual payments and rate of Original Tax Rate 2 PV Net Available TIF Net Available TIF Available TIF from District Captured Tax Capacity for TIF TIF Retained by City TIF District Year Taxes Payable Year Taxable Market Value (TMV) The Beard Group Projected Tax Increment Financing (TIF) Cash Flow Base Tax Capacity is calculated based on a TMV = $733,500. Includes three parcels owened by Taxable market value (TMV) annual growth assumption = 1.0% Original Tax Capacity Rate estimated based on Taxes Payable Year 2022. Tax Increment Financing District No. 1-6 (Redevelopment) City of Prior Lake Election for captured tax capacity is 100.00%. Captured tax capacity is estimated based election for Fiscal Disparity contribution to be paid from TIF District. Development includes housing and Prior Lake TIF October 26, 2022 Page 6 Total Based on 26-Year Duration for TIF District Total Based on 15-Year Duartion for TIF District Estimated Tax Increment Revenues (from tax increment generated by the district) Tax increment revenues distributed from the county $9,080,000 $4,860,000 Interest and investment earnings $50,000 $50,000 Total Estimated Tax Increment Revenues $9,130,000 $4,910,000 Estimated Project/Financing Costs (to be paid or financed with tax increment) Project costs Land/building acquisition $1,176,000 $1,176,000 Site improvements/preparation costs $1,824,000 $1,824,000 Other qualifying improvements $1,850,000 $385,000 Administrative costs $150,000 $100,000 Estimated Tax Increment Project Costs $5,000,000 $3,485,000 Interest expense $4,130,000 $1,425,000 Total Estimated Project/Financing Costs to be Paid from Tax Increment $9,130,000 $4,910,000 Estimated Financing Total amount of bonds to be issued $5,000,000 $3,485,000 Prior Lake Lofts Exhibit C City of Prior Lake Tax Increment Financing District No. 1-6 Projected Tax Increment Prior Lake TIF October 26, 2022 Page 7 Calendar Year20242025202620272028202920302031203220332034Year of TIF District012345678910Project YearYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Year 11Gross Income (before TIF)953,2212,633,2352,685,9002,648,0932,701,0552,755,0762,810,1772,866,3812,923,7092,982,1833,041,826Less Expenses (not include real estate taxes)(163,073)(652,120)(851,610)(865,000)(878,620)(892,474)(906,567)(919,475)(934,044)(948,864)(963,941)Less Real Estate Taxes(23,366)(186,197)(376,369)(380,254)(384,179)(388,144)(392,150)(394,770)(398,845)(402,961)(407,120)Net Operating Income (NOI) before TIF790,1481,981,1151,834,2891,783,0921,822,4341,862,6021,903,6111,946,9051,989,6652,033,3192,077,885Plus Tax Increment Financing (TIF) Revenue-134,770282,409285,403288,427291,481294,568297,686300,836304,019307,234NOI with TIF790,1482,115,8842,116,6992,068,4952,110,8612,154,0832,198,1782,244,5912,290,5012,337,3372,385,120Debt Service (DS)1,059,9341,059,9341,775,8261,775,8261,775,8261,775,8261,775,8261,775,8261,775,8261,775,8261,775,826Net Cash Flow(269,786)1,055,950340,873292,669335,035378,257422,352468,765514,675561,511609,294Cash on Cash with TIF (NOI / Equity)-4.5%16.2%5.2%4.5%5.2%5.8%6.5%7.2%7.9%8.6%9.4%Cash on Cash without TIF -4.5%14.2%0.9%0.1%0.7%1.3%2.0%2.6%3.3%4.0%4.6%Debt coverage with TIF (NOI/DS)0.722.001.191.161.191.211.241.261.291.321.34Debt coverage without TIF0.721.871.031.001.031.051.071.101.121.141.17Notes:1/ Total Development Cost (TDC):31,814,4011/ Total Equity:3,000,000Exhibit DPrior Lake, MNThe Beard Group98 Unit Residential Apartment BuildingPreliminary Estimated Pro Forma as Prepared by NorthlandBased on Developer Pro Forma Provided on February 7, 2022 DRAFT CITY OF PRIOR LAKE, MINNESOTA MODIFIED DEVELOPMENT PROGRAM FOR MUNICIPAL DEVELOPMENT DISTRICT NO. 1 AND TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 (PRIOR LAKE LOFTS) WITHIN MUNICIPAL DEVELOPMENT DISTRICT NO. 1 PUBLIC HEARING DATE: _______________________, 2022 PLAN APPROVED DATE: _____________________, 2022 PLAN CERTIFICATION REQUEST DATE: ____________, 2022 PLAN CERTIFIED DATE: _____________, 2022 Northland Securities, Inc. 150 South Fifth Street, Suite 3300 Minneapolis, MN 55402 (800) 851-2920 Member NASD and SIPC Registered with SEC and MSRB TABLE OF CONTENTS ARTICLE I – INTRODUCTION AND DEFINITIONS .........................................................1 Section 1.01 Introduction ......................................................................................1 Section 1.02 Definitions .........................................................................................1 Section 1.03 Plan Preparation ...............................................................................2 ARTICLE II - DEVELOPMENT PROGRAM .......................................................................3 Section 2.01 Overview ...........................................................................................3 Section 2.02 Statement of Objectives ...................................................................3 Section 2.03 Boundaries of Development District .............................................4 Section 2.04 Development Activities ...................................................................4 Section 2.05 Payment of Public Development Costs .........................................4 Section 2.06 Environmental Controls; Land Use Regulations .........................4 Section 2.07 Park and Open Space to be Created ..............................................4 Section 2.08 Proposed Reuse of Property ...........................................................4 Section 2.09 Administration and Maintenance of Development District ......5 Section 2.10 Amendments .....................................................................................5 ARTICLE III - TAX INCREMENT FINANCING PLAN ......................................................6 Section 3.01 Statutory Authority ..........................................................................6 Section 3.02 Planned Development .....................................................................6 3.02.1 Development Description ...............................................................6 3.02.2 City Plans and Development Program ..........................................6 3.02.3 Land Acquisition ..............................................................................6 3.02.4 Development Activities ...................................................................6 3.02.5 Need for Tax Increment Financing ................................................6 Section 3.03 Tax Increment Financing District ...................................................7 3.03.1 Designation .......................................................................................7 3.03.2 Boundaries of TIF District ...............................................................7 3.03.3 Type of District .................................................................................7 Section 3.04 Plan for Use of Tax Increment ........................................................8 3.04.1 Estimated Tax Increment .................................................................8 3.04.2 Development Costs ..........................................................................9 3.04.3 Estimated Sources and Uses of Funds...........................................9 Figure 3-1 ...........................................................................................9 3.04.4 Administrative Expense ................................................................10 3.04.5 County Road Costs.........................................................................10 3.04.6 Bonded Indebtedness.....................................................................10 3.04.7 Duration of TIF District .................................................................11 3.04.8 Estimated Impact on Other Taxing Jurisdictions .......................11 3.04.9 Prior Planned Improvements .......................................................11 ARTICLE IV – ADMINISTERING THE TIF DISTRICT ....................................................12 Section 4.01 Filing and Certification ..................................................................12 Section 4.02 Modifications of the Tax Increment Financing Plan ..................12 Section 4.03 Correcting Redevelopment Conditions ......................................12 Section 4.04 4-Year Knockdown Rule ................................................................13 Section 4.05 Pooling/5-Year Rule........................................................................13 Section 4.06 Financial Reporting and Disclosure Requirements ...................14 Section 4.07 Business Subsidy Compliance ......................................................14 EXHIBITS..........................................................................................................................15 Exhibit I Present Value Analysis ..................................................................15 Exhibit II Projected Tax Increment ................................................................16 Exhibit III Impact on Other Taxing Jurisdictions..........................................17 Exhibit IV Estimated Tax Increment Over Duration of District .................18 Exhibit V Map of Boundaries of TIF District and Development District 19 Exhibit VI Inspection Report of Property and Coverage Test Analysis ....21 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 1 ARTICLE I – INTRODUCTION AND DEFINITIONS SECTION 1.01 INTRODUCTION The City of Prior Lake proposes to provide tax increment financing assistance through the establishment of Tax Increment Financing (Redevelopment) District No. 1-6 (Beard Group) (the “TIF District”) within Modified Municipal Development District No. 1 to provide public financial assistance for the redevelopment of property for construction by a private developer of an approximate 98-unit apartment building with commercial-retail component, consisting of studio, one-bedroom and two-bedroom units, with 134 in-building parking stalls and 28 surface stalls (the “Project”). The Project is to be located on an approximate 1-acre (43,500 square feet) site on Dakota Street SE adjacent to the Prior Lake City Hall. This document contains the plan for the Modified Development Program for Municipal Development District No. 1 and the Tax Increment Financing Plan for the TIF District located within Municipal Development District No. 1. SECTION 1.02 DEFINITIONS For the purposes of this document, the terms below have the meanings given in this section, unless the context in which they are used indicates a different meaning: 1. “Authority” means the Prior Lake Economic Development Authority. 2. “City” means the City of Prior Lake, Minnesota. 3. “City Council” means the City Council of the City. 4. “County” means Scott County, Minnesota. 5. “County Auditor” means the County Auditor/Treasurer of the County. 6. “Developer” means the party undertaking construction of the Development in the TIF District, which is anticipated to be Prior Lake B Squared Ventures, LLC, its successors or assigns. 7. “Development” means the construction and development of an approximate 98-unit apartment building with commercial-retail component, consisting of studio, one-bedroom and two-bedroom units, with approximately 134 in-building parking stalls and 28 surface stalls . 8. “Development District” means Municipal Development District No. 1, within the City, established and modified pursuant to the Development District Act. 9. “Development District Act” means Minnesota Statutes, Sections 469.124 through 469.134, as amended and supplemented from time to time. 10. “Development Program” means the Development Program for the Development District, as amended and supplemented from time to time. 11. “Project Area” means the geographic area of the Development District. 12. “Public Development Costs” means the cost of the development activities that will or are expected to occur within the Project Area or TIF District. 13. “School District” means Prior Lake-Savage Area School, Independent School District No. 719. 14. “State” means the State of Minnesota. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 2 15. “TIF Act” means Minnesota Statutes, Sections 469.174 through 469.1794, as amended, both inclusive. 16. “TIF District” means Tax Increment Financing (Redevelopment) District No. 1-6 (Prior Lake Lofts). 17. “TIF Plan” means the tax increment financing plan for the TIF District (this document). SECTION 1.03 PLAN PREPARATION This document was prepared for the City by Northland Securities, Inc. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 3 ARTICLE II - DEVELOPMENT PROGRAM SECTION 2.01 OVERVIEW The Development Program included in Artile II provides information on the plan for Municipal Development District No. 1 pursuant to the Develoment District Act. Tax increment financing districts are established within the boundaries of Muncipal Develpoment District No. 1 pursuant to the TIF Act. The City established the Development District and the related Development Program as a tool to achieve the objectives described in Section 2.02. The Development District was first approved in March, 1985, and has been modified subsequently. The Development District serves as the Project Area for tax increment financing districts established within its boundaries. The Development Program describes the City’s objectives for the development of this area and the use of tax increment financing. This current modification to the Development Program include budget revisions to coincide with the TIF Plan relating to the TIF District and is intended to restate and expand on the original Development Program and all prior amendments hereto, which are incorporated herein by reference. Nothing in this modification is intended to supersede or alter the activities described in the original Development Program. SECTION 2.02 STATEMENT OF OBJECTIVES The modifications of the Development District in the City pursuant to the Development District Act are necessary and in the best interests of the City and its residents and are 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 Development is consistent with the established “Statement of Objectives” documented by the original Development Program and prior amendments hereto, which are incorporated herein by reference. The established “Statement of Objectives” for the Development Program provide the City with the ability to achieve certain public purpose goals not otherwise obtainable in the foreseeable future without City intervention in the normal development process. The public purpose goals include: restore and improve the tax base and tax revenue generating capacity of the Development District; increase employment and housing opportunities; realize comprehensive planning goals; remove blighted conditions; revitalize the property within the Development District to create an attractive, comfortable, convenient, and efficient area for residential, commercial and industrial, and related uses. The City seeks to achieve the following Development District program objectives: 1. Promote and secure the prompt development of certain property in the Development District, which property is not now in productive use or in its highest and best use, in a manner consistent with the City’s Comprehensive Plan and with the minimum adverse impact on the environment, and thereby promote and secure the development of other land in the City. 2. Promote and secure additional employment and housing opportunities within the Development District and the City for residents of the City and the surrounding area, thereby improving living standards, reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. 3. Secure the increase of commercial/industrial property subject to taxation by the City, School, County and other taxing jurisdictions in order to better enable such entities to pay for TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 4 governmental services and programs required to be provided by them. 4. Provide for the financing and construction of public improvements in the Development District necessary for the orderly and beneficial development of the Development District and adjacent areas of the City. 5. Promote the concentration of commercial, office, 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 local business expansion, improvement, and development, whenever possible. 7. Create a desirable and unique character within the Development District thorough quality land use alternatives and design quality in new and remodeled buildings, including residential and commercial buildings. 8. Encourage and provide maximum opportunity for private redevelopment of existing areas and structures that are compatible with the Development Program. 9. Encourage redevelopment of substandard buildings, to improve employment opportunities in the Development District and the City, where compatible with other planning and development goals. SECTION 2.03 BOUNDARIES OF DEVELOPMENT DISTRICT The boundaries of the Development District are depicted in Exhibit V. The boundaries of the Development District are coterminous with the municipal boundaries of the City. The City has previously established Tax Increment Financing District Numbers 1 through 5, inclusive, within the boundaries of the Development District. SECTION 2.04 DEVELOPMENT ACTIVITIES The proposed development activities within the Development District, the Development, are consistent with the goals, objectives, and plans expressed by the Development Program. The modification to the Development Program relate to plans by the Developer to redevelop property within the City that will increase residential housing choices within the City. SECTION 2.05 PAYMENT OF PUBLIC DEVELOPMENT COSTS The Public Development Costs and the plan for their payment are described in the tax increment financing plans for the respective tax increment financing districts within the Development District. Public Development Costs of the Development Program will be paid from tax increments from the respetive tax increment financing districts with the Development District. SECTION 2.06 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 of the City. SECTION 2.07 PARK AND OPEN SPACE TO BE CREATED Park and open space within the Development District if created will be created in accordance with the City’s Comprehensive Plan and zoning and subdivision ordinances. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 5 SECTION 2.08 PROPOSED REUSE OF PROPERTY The City or Authority may acquire property and reconvey or convey property to private developers or another entities for purpose of achieving the objectives of the Development Program. The City and Authority will require the execution of a binding development agreement with respect thereto and evidence that tax increments or other funds will be available to pay Public Development Costs associated with the proposed acquisition. Appropriate restrictions regarding the reuse and redevelopment of property shall be incorporated into any development agreement to which the City or Authority is a party. SECTION 2.09 ADMINISTRATION AND MAINTENANCE OF DEVELOPMENT DISTRICT Maintenance and operation of the Development District will be the responsibility of the City Manager who shall serve as administrator of the Development District. Each year the administrator will submit to the Council the maintenance and operation 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 2.10 AMENDMENTS The City reserves the right to alter and amend the Development Program, 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, among other modifications that may be approved. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 6 ARTICLE III - TAX INCREMENT FINANCING PLAN SECTION 3.01 STATUTORY AUTHORITY The TIF District and this TIF Plan are established under the authority of the TIF Act. SECTION 3.02 PLANNED DEVELOPMENT 3.02.1 Development Description The Developer proposes to undertake the construction and development of an approximate 98-unit apartment building with commercial-retail component, consisting of studio, one-bedroom and two-bedroom units, with approximately 134 in-building parking stalls and 28 surface stalls. 3.02.2 City Plans and Development Program In addition to achieving the objectives of the Development Program, the Development is consistent with and works to achieve the development objectives of the City. The TIF Plan for the TIF District conforms to the general plan for development or redevelopment of the City as a whole. The City has adopted land use controls to guide the use of property. The development plans for the Development in the TIF District have been reviewed by the Planning Commission and the City Council, and conform to current land use controls. 3.02.3 Land Acquisition The Developer will acquire the property within the TIF District. 3.02.4 Development Activities The activities proposed in the TIF Plan will be subject to a written agreement with the Developer. The City anticipates entering into a contract with the Developer to construct the Development and provide tax increment financing assistance to the Developer to reimburse Public Development Costs financed and incurred by the Developer. 3.02.5 Need for Tax Increment Financing In the opinion of the City, the Development would not reasonably be expected to occur solely through private investment within the foreseeable future and 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 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 and facts supporting this finding include the following: • The Development requires public financial assistance to offset land and building acquisition, site improvement and preparation costs, and other development costs to allow for the Developer to proceed with construction of the Development. • 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 I. This analysis indicates that the increase in estimated market value of the 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. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 7 SECTION 3.03 TAX INCREMENT FINANCING DISTRICT 3.03.1 Designation This TIF District is designated as Tax Increment Financing (Redevelopment) District No. 1-6 (Beard Group). 3.03.2 Boundaries of TIF District The boundaries of the TIF District are depicted in Exhibit V. The parcels within the boundaries of the TIF District presently include the following parcels: • 259010570 • 259010550 • 259010560 • Portion of 259010582 The property within the boundaries of the TIF District is in the process of being platted into two parcels. Upon completion of platting and the establishment of the TIF District there will be two parcels within the boundaries of the TIF District. The Developer will acquire the two parcels from the Authority for the Development and then seek to combine the two parcels (or lots) into one parcel for the Development. The property within the TIF District is described as follows and is inclusive of the immediate adjacent roads and right-of-way: • Description to be inserted here in final adopted TIF Plan upon completion of the platting of property. 3.03.3 Type of District The TIF District is established as a “redevelopment district” pursuant to Section 469.174, subdivision 10 of the TIF Act. The City has determined that the property in the TIF District meets the statutory criteria for a redevelopment district. Section 469.174, subdivision 10 (a) (1) of the TIF Act requires two tests for occupied parcels be met to qualify as a “redevelopment district”: a conditions test and coverage test. For a “redevelopment district” more than 50% of the buildings, not including outbuildings, must be found to be structurally substandard to a degree requiring substantial renovation or clearance. The conditions test for structurally substandard is defined under Section 469.174, subdivision 10(b) of the TIF Act. For purposes of that subdivision, “structurally substandard” means containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.” Buildings are not eligible to be considered structurally substandard unless they meet certain additional criteria, as set forth in Section 469.174, subdivision 10(c) of the TIF Act. A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15% of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. Items of evidence that support such a conclusion that the building is not disqualified include recent fire or police inspections, on-site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 8 Furthermore, parcels consisting of 70% of the area of the district must be occupied by buildings, streets, utilities, or paved or gravel parking lots to meet the required coverage test. The coverage required by the parcel to be considered occupied is defined under Section 469.174, subdivision 10(e) of the TIF Act. For purposes of such subdivision, a parcel is not occupied by buildings, streets, utilities, or paved or gravel parking lots unless 15% of the area of the parcel contains building, streets, utilities, or paved or gravel parking lots. As summarized in the table below, 100% of the area of the TIF District is occupied by improved parcels, and 100% of the buildings within the TIF District are found to be substandard. The substandard buildings are reasonably distributed. The detailed results of the building inspection and analysis performed by the City’s Building Official, Alan Ernste (License #1935) and the City’s Planning Department are contained in the reports included in Exhibit VI of the TIF Plan. In summary the findings are as follows: Number of Parcels.............................................................................................................2 Site Area Included (square feet without roads) ...................................................43,500 Area of Improved Parcels (square feet) ................................................................43,500 Percent of Area Improved ........................................................................................100% Number of Parcels with Buildings .................................................................................2 Number of Buildings found Substandard .....................................................................2 Percent of Buildings found Substandard ...............................................................100% SECTION 3.04 PLAN FOR USE OF TAX INCREMENT 3.04.1 Estimated Tax Increment The original net tax capacity of value of the TIF District will be set by the County upon request for certification. For the purposes of the TIF Plan, the estimated original net tax capacity is $9,169. This amount is estimated based on the most recent published estimated market value of $733,500 for the parcels within the boundaries of the TIF District with tax capacity value calculated for residential-apartment classification. The total tax capacity value of the property after completion of the Development (for taxes payable in 2026) is estimated at $330,242. This amount is based on a total estimated taxable market value of $26,267,800 with property classified as residential-apartment. The estimated difference between the total tax capacity value after completion of the Development and the original net tax capacity value is the captured tax capacity value in the amount of $319,028 for the creation of tax increment (for taxes payable in 2026). The total local tax rate is estimated at 98.71% based on the tax rates for taxes payable in 2022. The TIF Plan assumes that this rate will be set as the original local tax rate for the TIF District. At the time of the certification of the original net tax capacity for the TIF District, the County Auditor shall certify the original local tax rate that applies to the TIF District. The original local tax rate is the sum of all the local tax rates, excluding that portion of the school rate attributable to the general education levy under Minnesota Statutes Section 126C.13, that apply to a property in the TIF District. The local tax rate to be certified is the rate in effect for the same taxes payable year applicable to the tax capacity values certified as the TIF District’s original tax capacity. The resulting tax capacity rate is the original local tax rate for the duration of the TIF District. Under these assumptions, the estimated annual tax increment after completion is $314,922 (for taxes payable in 2026) before deducting for the State Auditor’s fee (0.36% of the captured tax increments). The actual tax increment will vary according to the certified original tax capacity TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 9 value and original tax rate, the actual property value produced by the Development and the changes in property value and State tax policy over the duratino of the TIF District. The City will retain 100% of the captured tax capacity value for the duration of the TIF district, pursuant to Section 469.177, Subd. 2 of the TIF Act. Exhibit II contains the projected tax increment over the druation of the TIF District. 3.04.2 Public Development Costs The City will use tax increment to pay Public Development Costs. A written agreement between the City and the Developer will define the means for verifying Public Development Costs financed and incurred by the Developer that will be eligible for reimbursement from tax increments from the TIF District and the terms for payment of tax increments collected by the City to the Developer. The City will use tax increment to pay financing costs. The interest rate payable on bonds issued will be set pursuant to terms within the written agreement with the Developer. 3.04.3 Estimated Sources and Uses of Funds The estimated sources of revenue, along with the estimated Public Development Costs of the TIF District, are itemized in Figure 3-1 that follows. Such costs are eligible for reimbursement from tax increments, and other listed sources of revenue from the TIF District. The City reserves the right to administratively adjust the amount of any of the Public Development Cost items listed in Figure 3-1, so long as the Estimated Tax Increment Project Costs amount, not including financing costs, is not increased. FIGURE 3-1ESTIMATED SOURCES AND USES OF FUNDS Total Estimated Tax Increment Revenues (from tax increment generated by the district) Tax increment revenues distributed from the county $9,080,000 Interest and investment earnings $50,000 Total Estimated Tax Increment Revenues $9,130,000 Estimated Project/Financing Costs (to be paid or financed with tax increment) Project costs Land/building acquisition $1,176,000 Site improvements/preparation costs $1,824,000 Utilities $0 Other qualifying improvements $1,850,000 Administrative costs $150,000 Estimated Tax Increment Project Costs $5,000,000 Estimated financing costs Interest expense $4,130,000 Total Estimated Project/Financing Costs to be Paid from Tax Increment $9,130,000 Estimated Financing Total amount of bonds to be issued $5,000,000 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 10 3.04.4 Administrative Costs The City plans to use tax increment revenues to pay for administrative expenses for the TIF District. The use of tax increment revenues to pay administrative expenses will not exceed the maximum amount of 10% of tax increment revenues pursuant to the TIF Act. The City will use these monies to pay for and reimburse itself for costs of administering the TIF District as allowed by the TIF Act. The estimated amount of tax increment revenue planned to pay administrative expense is shown in Figure 3-1. Anticipated administrative expenses of the TIF District include annual audit of the fund for the TIF District, preparation of annual reporting, legal publication of annual report, and administration of the development agreement. 3.04.5 County Road Costs The Development will not substantially increase the use of county roads and necessitate the need to use tax increments to pay for county road improvements. 3.04.6 Bonded Indebtedness Bonds are broadly defined in the TIF Act and are the primary methods of financing Public Development Costs within a tax increment financing district. Any bond to which payment for tax increment is pledged is a tax increment bond. A tax increment bond issued in connection with “any project for which tax increment financing has been undertaken” must be one of the types of bonds expressly authorized by Section 469.178 of the TIF Act.2 The types of bonds expressly authorized by Section 469.178 are: • general obligation bonds; • revenue bonds (including pay-as-you-go, or PAYG, obligations); and • interfund loans or advances. The total amount of bonds that may be issued to finance the Public Development Costs for the TIF District is shown in Figure 3-1. The City does not plan to issue general obligation bonds as a result of the TIF Plan. Pursuant to Section 469.178, subdivision 7 of the TIF Act, the City may advance or loan money to finance expenditures under Section 469.176, subdivision 4 of the TIF Act, from the general fund of the City or any other legally authorized fund under which it has legal authority to do so, subject to the following provisions: (a) Not later than 60 days after money is transferred, advanced, or spent, whichever is earliest, the loan or advance must be authorized by resolution of the City. (b) The resolution may generally grant to the City the power to make interfund loans under one or more tax increment financing plans or for one or more districts. The resolution may be adopted before or after the adoption of the tax increment financing plan or the creation of the tax increment financing district from which the advance or loan is to be repaid. (c) The terms and conditions for repayment of the loan must be provided in writing. The written terms and conditions may be in any form, but must include, at a minimum, the principal amount, the interest rate, and maximum term. Written terms may be modified or amended in writing by the City before the latest decertification of any tax increment financing district from which the interfund loan is to be repaid. The maximum rate of interest permitted to be charged is limited to the greater of the rates specified under Minnesota Statutes, Section 270C.40 or 549.09 as of the date the loan or advance is authorized, unless the written agreement states that the maximum interest rate will fluctuate as the interest rates specified under Minnesota Statutes, Section 270C.40 or 549.09 are from time to time adjusted. Loans or advances may be structured as draw- down or line-of-credit obligations of the lending fund. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 11 (d) The City shall report in the annual report submitted under Section 469.175, subdivision 6 of the TIF Act: (1) the amount of any interfund loan or advance made in a calendar year; and (2) any amendment of an interfund loan or advance made in a calendar year. 3.04.7 Duration of TIF District The City elects the maximum duration of the TIF District pursuant to the TIF Act. The collection of tax increments will not exceed twenty-five (25) years from the date of receipt of the first tax increment for a total of twenty-six (26) years of tax increment collection. Under the current schedule for development, the first tax increment will be collected in 2025 (construction commencement in 2023) creating the authority to collect tax increments through 2050. The anticipated decertification date based on the estimated first year of tax increment collection is December 31, 2050. 3.04.8 Estimated Impact on Other Taxing Jurisdictions Exhibits III and IV show 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 City believes that there will be no adverse impact on other taxing jurisdictions during the duration of the TIF District, since the 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 anticipates minimal impact of the Development on City-provided services. There may be minimal borrowing costs to the City for the Development. A manageable increase in water and sewer usage is expected. It is anticipated that there may be a slight but manageable increase in police and fire protection duties due to the Development. 3.04.9 Prior Planned Improvements There have been no building permits issued in the last 18 months in conjunction with any of the properties within the TIF District. The City will include this statement with the request for certification to the County Auditor. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 12 ARTICLE IV – ADMINISTERING THE TIF DISTRICT SECTION 4.01 FILING AND CERTIFICATION The filing and certification of the TIF Plan consists of the following steps: 1. Upon adoption of the TIF Plan, the City shall submit a copy of the TIF Plan to the Minnesota Department of Revenue and the Office of the State Auditor. 2. The City shall submit a request to the County Auditor to certify the original net tax capacity and net tax capacity rate of the TIF District. To assist the County Auditor in this process, the City shall submit copies of the TIF Plan, the resolution establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. 3. If applicable, the City shall send the County Assessor any assessment agreement establishing the minimum market value of land and improvements within the TIF District and shall request that the County Assessor review and certify the assessment agreement as reasonable. SECTION 4.02 MODIFICATIONS OF THE TAX INCREMENT FINANCING PLAN The City reserves the right to modify the TIF District and the TIF Plan. Under current State law, the following actions can only be approved after satisfying all the necessary requirements for approval of the original TIF Plan (including notifications and public hearing):  Reduction or enlargement in the geographic area of the Development District 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 City.  Increase in the total estimated Public Development Costs, including administrative costs of the City.  Designation of additional property to be acquired by the City. Other modifications can be made by resolution of the City. In addition, the original approval process does not apply if (A) (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 (B) the City 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 City 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. SECTION 4.03 CORRECTING REDEVELOPMENT CONDITIONS Section 469.176, subdivision 4j of the TIF Act requires that at least 90% of the revenues derived from tax increments from the TIF District be used to finance the cost of correcting conditions that allow designation of the TIF District as a redevelopment district. These costs include, but are not limited to, acquiring properties containing structurally substandard buildings TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 13 or improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary to provide a site of sufficient size to permit development, demolition and rehabilitation of structures, clearing of the land, the removal of hazardous substances or remediation necessary for the development of the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated administrative expenses of the City, including the cost of preparation of the development action response plan, may be included in the qualifying costs. SECTION 4.04 FOUR-YEAR KNOCKDOWN RULE The provision of the TIF Act referred to as the Four-Year Knockdown Rule requires development activity to take place on each parcel within a tax increment financing district within four years from the date of certification of the original net tax capacity of such tax increment financing district. If development activity on a parcel has not begun within the required time frame, no additional tax increment may be collected from that parcel and its value must be excluded from the district’s original net tax capacity. Development activity includes demolition, rehabilitation, renovation or site improvement, including a qualified improvement of an adjacent street, on a parcel located within the TIF District. If no development activity has occurred within four years from the date of certification then that parcel shall be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. The City 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 City or owner of the parcel subsequently commences any of the above activities, the City shall recertify 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 4.05 POOLING AND FIVE-YEAR RULE An amount equal to at least 75% of the total revenue derived from tax increments paid by properties in the TIF District must be expended on activities in the TIF District or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities in the TIF District or to pay, or secure payment of, debt service on credit enhanced bonds. Not more than 25% of the total revenue derived from tax increments paid by properties in the TIF District may be expended, through a development fund or otherwise, on activities outside of the TIF District but within the defined geographic area of the Project Area except to pay, or secure payment of, debt service on credit enhanced bonds. Revenue derived from tax increments paid by properties in the TIF District are considered to have been “spent” within the TIF District if such amounts are: • actually paid to a third party for activities performed within the TIF District within five years after certification of the district; • 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 period or a reasonable temporary period or are deposited in a reasonably required reserve or replacement fund. • 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 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 14 • used to reimburse a party for payment of eligible costs (including interest) incurred within five years from certification of the district. It is anticipated that all revenue derived from tax increments paid by properties in the TIF District will be spent or obligated within the first five years after certification of the TIF District and spent on Public Development Costs within the boundaries of the TIF District. SECTION 4.06 FINANCIAL REPORTING AND DISCLOSURE REQUIREMENTS The City will comply with the annual reporting requirements of the TIF Act pursuant to the guidelines of the Office of the State Auditor. Under current law, the City must prepare and submit a report on the TIF District on or before August 1 of each year. The City must also annually publish in a newspaper of general circulation in the City an annual statement for the TIF District, in the format as prescribed by the Office of the State Auditor. The reporting and disclosure requirements outlined in this section begin with the year a tax increment financing district is 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 increments. SECTION 4.07 BUSINESS SUBSIDY COMPLIANCE The City will comply with the business subsidy requirements specified in Minnesota Statutes, Sections 116J.993 to 116J.995, as amended. TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 15 469.175(3)(2) of the TIF Act 1 Estimated Future Market Value w/ Tax Increment Financing 33,591,715 1 2 Payable 2022 Market Value 733,500 3 Market Value Increase (1-2)32,858,215 4 Present Value of Future Tax Increments 5,281,646 5 Market Value Increase Less PV of Tax Increments 27,576,568 6 Estimated Future Market Value w/o Tax Increment Financing 947,674 1 7 Payable 2022 Market Value 733,500 8 Market Value Increase (6-7)214,174 9 Increase in MV From TIF 27,362,394 2 1 Assume 1.03% annual appreciation over 26 year life of district. 2 Exhibit I City of Prior Lake Statutory compliance achieved if increase in market value from TIF (Line 9) is greater than or equal to zero. Present Value Analysis As Required By Section Tax Increment Financing District No. 1-6 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 16 1 2025 13,000,000 163,438 9,169 152,244 98.71%150,285 (541) 149,744 141,581 2 2026 26,267,800 330,242 9,169 319,028 98.71%314,922 (1,134) 313,788 426,742 3 2027 26,538,358 333,643 9,169 322,409 98.71%318,260 (1,146) 317,114 703,735 4 2028 26,811,703 337,080 9,169 325,825 98.71%321,632 (1,158) 320,474 972,793 5 2029 27,087,864 340,552 9,169 329,276 98.71%325,038 (1,170) 323,868 1,234,142 6 2030 27,366,869 344,059 9,169 332,762 98.71%328,480 (1,183) 327,297 1,488,002 7 2031 27,648,748 347,603 9,169 336,285 98.71%331,957 (1,195) 330,762 1,734,588 8 2032 27,933,530 351,184 9,169 339,844 98.71%335,470 (1,208) 334,262 1,974,107 9 2033 28,221,245 354,801 9,169 343,439 98.71%339,019 (1,220) 337,799 2,206,760 10 2034 28,511,924 358,455 9,169 347,072 98.71%342,605 (1,233) 341,372 2,432,744 11 2035 28,805,597 362,147 9,169 350,742 98.71%346,228 (1,246) 344,982 2,652,250 12 2036 29,102,294 365,877 9,169 354,449 98.71%349,888 (1,260) 348,628 2,865,463 13 2037 29,402,048 369,646 9,169 358,195 98.71%353,586 (1,273) 352,313 3,072,562 14 2038 29,704,889 373,453 9,169 361,980 98.71%357,322 (1,286) 356,036 3,273,723 15 2039 30,010,850 377,300 9,169 365,803 98.71%361,096 (1,300) 359,796 3,469,115 16 2040 30,319,961 381,186 9,169 369,666 98.71%364,909 (1,314) 363,595 3,658,902 17 2041 30,632,257 385,112 9,169 373,569 98.71%368,762 (1,328) 367,434 3,843,246 18 2042 30,947,769 389,079 9,169 377,512 98.71%372,654 (1,342) 371,312 4,022,301 19 2043 31,266,531 393,086 9,169 381,496 98.71%376,586 (1,356) 375,230 4,196,220 20 2044 31,588,576 397,135 9,169 385,520 98.71%380,559 (1,370) 379,189 4,365,149 21 2045 31,913,939 401,226 9,169 389,586 98.71%384,573 (1,384) 383,189 4,529,230 22 2046 32,242,652 405,358 9,169 393,694 98.71%388,628 (1,399) 387,229 4,688,603 23 2047 32,574,752 409,534 9,169 397,844 98.71%392,724 (1,414) 391,310 4,843,402 24 2048 32,910,272 413,752 9,169 402,037 98.71%396,863 (1,429) 395,434 4,993,758 25 2049 33,249,247 418,013 9,169 406,273 98.71%401,045 (1,444) 399,601 5,139,798 26 2050 33,591,715 422,319 9,169 410,553 98.71%405,270 (1,459) 403,811 5,281,646 TOTAL = 9,108,361 (32,790) 9,075,571 5,281,646 Key Assumptions for Cash Flow: 1 2 3 4 Captured TIF Original Tax Rate 2 Less State Fee Available TIF from District Exhibit II The Beard Group Projected Tax Increment Financing (TIF) Cash Flow Captured Tax Capacity for TIF Base Tax Capacity is calculated based on a TMV = $733,500. Taxable market value (TMV) annual growth assumption = 1.0% Original Tax Capacity Rate estimated based on Taxes Payable Year 2022. Taxes Payable Year Tax Capacity Original Base Tax Capacity Taxable Market Value (TMV) Tax Increment Financing District No. 1-6 (Redevelopment) City of Prior Lake Election for captured tax capacity is 100.00%. Captured tax capacity is estimated based election for Fiscal Disparity contribution to be paid from TIF District. Development includes housing and commercial. Only commercial valuation is subject to Fiscal Disparities. PV Available TIF TIF District Year TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 17 Estimated Annual Captured Tax Capacity (Full Development)$410,553 Payable 2022 Local Tax Rate 98.713% Estimated Annual Tax Increment $405,270 Net Tax Capacity (NTC) Captured Tax Capacity Percent of Total NTC City of Prior Lake 44,570,254 410,553 0.92% Scott County 224,178,978 410,553 0.18% ISD 719 72,006,648 410,553 0.57% Net Tax Capacity (NTC) % of Total Tax Increment Share Added Local Tax Rate City of Prior Lake 30.465%30.862%125,075 0.281% Scott County 30.488%30.885%125,168 0.056% ISD 719 27.877%28.240%114,450 0.159% Other 9.883%10.012%40,576 Totals 98.713%100.000%405,269 NOTE NO. 1: Assuming that ALL of the captured tax capacity would be available to all taxing jurisdictions even if the City does not create the Tax Increment District, the creation of the District will reduce tax capacities and increase the local tax rate as illustrated in the above tables. NOTE NO. 2: Assuming that NONE of the captured tax capacity would be available to the taxing jurisdiction if the City did not create the Tax Increment District, then the plan has virtually no initial effect on the tax capacities of the taxing jurisdictions. However, once the District is established, allowable costs paid from the increments, and the District is terminated, all taxing jurisdictions will experience an increase in their tax base. Annual Tax Increment Exhibit III Impact on Other Taxing Jurisdictions (Taxes Payable 2022) Percent of Tax Base City of Prior Lake Tax Increment Financing District No. 1-6 Dollar Impact of Affected Taxing Jurisdictions TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 18 Based on Pay 2022 Tax Rate = 98.713%30.465% 30.488% 27.877%9.883% New Estimated City County School Other TIF Taxes Taxable New Base Captured Total TIF TIF TIF TIF District Payable Market Tax Tax Tax Tax Related Related Related Related Year Year Value Capacity Capacity Capacity Increments Share Share Share Share 1 2025 13,000,000 163,438 9,169 152,244 150,285 46,381 46,416 42,441 15,047 2 2026 26,267,800 330,242 9,169 319,028 314,922 97,192 97,264 88,936 31,530 3 2027 26,538,358 333,643 9,169 322,409 318,260 98,222 98,295 89,878 31,865 4 2028 26,811,703 337,080 9,169 325,825 321,632 99,263 99,336 90,830 32,203 5 2029 27,087,864 340,552 9,169 329,276 325,038 100,314 100,389 91,792 32,543 6 2030 27,366,869 344,059 9,169 332,762 328,480 101,376 101,452 92,764 32,888 7 2031 27,648,748 347,603 9,169 336,285 331,957 102,449 102,526 93,746 33,236 8 2032 27,933,530 351,184 9,169 339,844 335,470 103,533 103,611 94,738 33,588 9 2033 28,221,245 354,801 9,169 343,439 339,019 104,629 104,707 95,741 33,942 10 2034 28,511,924 358,455 9,169 347,072 342,605 105,735 105,814 96,753 34,303 11 2035 28,805,597 362,147 9,169 350,742 346,228 106,854 106,933 97,776 34,665 12 2036 29,102,294 365,877 9,169 354,449 349,888 107,983 108,063 98,810 35,032 13 2037 29,402,048 369,646 9,169 358,195 353,586 109,124 109,206 99,854 35,402 14 2038 29,704,889 373,453 9,169 361,980 357,322 110,277 110,359 100,909 35,777 15 2039 30,010,850 377,300 9,169 365,803 361,096 111,442 111,525 101,975 36,154 16 2040 30,319,961 381,186 9,169 369,666 364,909 112,619 112,703 103,052 36,535 17 2041 30,632,257 385,112 9,169 373,569 368,762 113,808 113,893 104,140 36,921 18 2042 30,947,769 389,079 9,169 377,512 372,654 115,009 115,095 105,239 37,311 19 2043 31,266,531 393,086 9,169 381,496 376,586 116,223 116,309 106,350 37,704 20 2044 31,588,576 397,135 9,169 385,520 380,559 117,449 117,536 107,472 38,102 21 2045 31,913,939 401,226 9,169 389,586 384,573 118,687 118,776 108,605 38,505 22 2046 32,242,652 405,358 9,169 393,694 388,628 119,939 120,028 109,750 38,911 23 2047 32,574,752 409,534 9,169 397,844 392,724 121,203 121,294 110,907 39,320 24 2048 32,910,272 413,752 9,169 402,037 396,863 122,481 122,572 112,076 39,734 25 2049 33,249,247 418,013 9,169 406,273 401,045 123,771 123,863 113,257 40,154 26 2050 33,591,715 422,319 9,169 410,553 405,270 125,075 125,168 114,450 40,577 Total 9,108,361 2,811,038 2,813,133 2,572,241 911,949 Note: The Estimated Total Tax Increment shown above is before deducting the State Auditor's fee, which is payable at a rate of 0.36% of the Total Tax Increment collected. Exhibit II provides Estimated Total Tax Increment after deducting for the State Auditor's fee. Exhibit IV City of Prior Lake Tax Increment Financing (Redevelopment) District No. 1-6 Estimated Tax Increments Over Maximum Duration of TIF District TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 19 Exhibit V Map of Boundaries of Tax Increment Financing District No. 1-6 and Municipal Development District No. 1 (Boundaries of Municipal District No. 1 are coterminous with the municipal boundaries of the City of Prior Lake)CITY OF PRIOR LAKEMUNICIPAL DEVELOPMENT DISTRICT NO.1 TIF District 1-6(Prior Lake Lofts) PID: 259010570 PID: 259010550 PID: 259010560 PID: p/o 259010582The boundaries of Municipal Development District No. 1 are being expanded to be coterminous with the city limits of the City of Prior LakeDevelopment District No. 1 TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 20 Exhibit V - Continued TIF District 1-6 Dakota Street Redevelopment Prior Lake B Squared Ventures, LLC TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 21 Exhibit VI Inspection Report of Property and Coverage Test Analysis TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 22 PROPERTY INSPECTION REPORT FOR THE PURPOSE OF DETERMINING CONDITION OF BUILDINGS TEST AS DEFINED BY MN STATUTES, SECTION 469.174, SUBDIVISION 10 1. Building Name: 4662 Dakota Street SE 2. Parcel No: 250010570 3. Building Address: 4662 Dakota Street SE, Prior Lake, MN 55372 4. Inspector(s) Name(s): Alan Ernste 5. Inspection Date: October 22, 2021 6. Inspection Time: 1:30 PM 7. Inspection Type: Interior Yes Exterior Yes 8. Building Vacant: Yes X No 9. Estimated Replacement Cost: $171,456 10. Estimated Cost to Correct Building Code Deficiencies: $81,661 11. Percentage of Replacement Cost: 47.63% Note: Details supporting the calculation of Items 9 and 10 above should be included as an attachment to the report. DESCRIPTION OF CONDITION DEFICIENCIES: Minnesota Statutes, Section 469.174, Subdivision 10, states that a building is Structurally Substandard if it contains “defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.” 12. Details on Defects in Structural Elements: There are cracks in the building foundation; the rear cedar deck is rotting and needs to be replaced; the roof is approximately 23 years old with curling shingles and needs to be replaced; the front stoop is in disrepair and needs to be replaced; and floor joists are over spanned 13. Combination of Deficiencies: 1. Essential Utilities and Facilities ➢ Main level restroom sink is not properly vented ➢ Kitchen sink is not properly vented Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 23 ➢ No smoke or carbon monoxide detectors exist ➢ Window on west building wall needs to be replaced ➢ Window on north building wall needs to be replaced ➢ No electrical service is provided to the property 2. Light and Ventilation ➢ No bath fan in lower-level restroom 3. Fire Protection/Adequate Egress ➢ East building wall overhang is within 5 feet of side property line and not properly fire rated ➢ East building wall has window and door openings that exceed 25% of wall area 4. Layout and Condition of Interior Partitions/Materials ➢ Floor joists are over spanned ➢ Lower-level stair to main level needs to be replaced as it does not meet riser height, run, or head clearance ➢ Main-level stair to upper level needs to be replaced as it does not meet riser height, run, or head clearance 5. Exterior Construction ➢ Front stoop is in disrepair and needs to be replaced ➢ Roof is approximately 23 years old with curling shingles and needs to be replaced ➢ Rear cedar deck is rotting and needs to be replaced ➢ Soffit repairs needed on west building wall ➢ Exterior siding in poor condition; residing of home is needed ➢ Cracks in foundation 6. Other 14. Overview of Condition Deficiencies: The home is in poor condition and has not been maintained. There are foundation cracks, siding in disrepair, soffit falling away, gutters are full of debris and not properly draining stormwater from the home, rotting windows, rotting decking material, roof in need of replacement, front stoop in need of replacement, and several plumbing repairs needed. 15. Description of Code Deficiencies: Floor joists are over spanned and need to be corrected; restroom fan is needed; two stairwells exist and neither meets required riser height, run, or head clearance; proper venting is needed on restroom and kitchen sinks; smoke and CO detectors are needed throughout the home; rear deck is a hazard and needs to be replaces; and adequate repairs are needed to make sure exterior walls are properly fire rated and meet codes related to percentage of wall openings. 16. Energy Code [The city may decide is does not want to count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.174, Subdivision 10(b)) defined as “structurally substandard. The city will need to provide direction to the Inspector as to whether energy code deficiencies should be counted toward meeting the conditions test.] Energy code deficiencies were not specifically evaluated. Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 24 17. Photographs Documenting Interior and Exterior of Building Attached to this report are photos of the subject property offered as supporting documentation to the information included in this report. 18. Summary of Inspector’s Qualifications: Al Ernste is a Minnesota Certified Building Official and currently serves as the Building Official for the City of Prior Lake. Mr. Ernste’s experience includes 20 years working in the construction industry, serving as a laborer, carpenter, and Project Superintendent. Mr. Ernste operated his own Residential Construction Contracting and Estimating business for nine years and has 24 years of experience in building inspections, including 21 years serving as a Building Official for the cities of Faribault and Prior Lake. 19. Summary of Deficiencies: It is my professional opinion that this building is Substandard as defined by Minnesota Statutes, Section 469.174, Subdivision 10c. a) Building Code deficiencies total more than 15% of replacement cost. b) Substantial renovation is required to correct conditions found. Date 10/27/2021 Title Building Official License # 1935 Name Alan Ernste Signature Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 25 Condition of Building Test Interior and Exterior Photo Documentation 4662 Dakota Street SE, Prior Lake, MN 55372 Photo #Description Photo Estimated Cost of Repair / Replacement Description 1 Exterior foundation crack $4,511 The average cost to repair foundation problems is $4,511, with most homeowners spending between $2,318 and $6,750. Minor crack repairs cost $620 or more to fix, while major repairs that require hydraulic piers can cost $10,000 to $15,000 2 3 4 Soffit repairs needed $400 Soffit repairs are estimated at $20 to $30 per linear foot. This area is approximatley 20 linear feet. $10,750Exterior siding repairs needed The cost to side a house, including materials, installation and site cleanup, typically ranges from $5,400 to $16,000, or about $10,750 on average. Common siding materials include vinyl siding, which costs about $3 to $12 per square foot. Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 26 5 Exterior openings exceeding 25% and located within 5 feet of side property line $2,000 estimated cost of $2,000 to close existing opening(s). 6 Overhang within 5 feet of side property line and not properly fire rated $1,500 Estimated cost of $1500 to properly fire rate the wall. 7 New window needed $625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 ($175). 8 Rear deck repairs needed to replace rotting wood $15,200 A cedar deck can cost $20-$75, or more, per square foot; average ($47.50). The deck is 320 SF, with a replacement cost of $15,200.Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 27 9 No electrical service to the property $2,500 Electrical repairs are estimated at $2,500. 10 Roof in poor condition and needs to be replaced; approx. age 23 years $7,000 A typical range for roof replacement costs for a home of this size is between $5,100 and $10,000. 11 12 Repairs or replacement of front stoop needed $2,500 Full stoop replacement is anticipated at an estimated cost of $2,500.Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 28 13 14 15 16 Window replacement or combination window needed $625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 ($175). Main level stair to upper level needs to be replaced; does not meet riser height, run or head clearance $5,000 A complete stair replacement inlcuding new balusters, treads and risers usually osts between $4,000 and $8,000. Repairs or replacement of front stoop needed $2,500 Full stoop replacement is anticipated at an estimated cost of $2,500.Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 29 17 There are no smoke and carbon monoxide detectors in the home $1,200 $1,200 is estimated to install smoke and CO detercters throughout the home. 18 Plumbing: kitchen sink not properly vented $1,000 Estimated cost to properly vent sink is $400 plus $600 for the wall patch. 19 Plumbing: bathroom sink not properly vented $1,000 Estimated cost to properly vent sink is $400 plus $600 for the wall patch. 20 No bath fan in lower level restroom $850 Estimated cost of $850 to install a fan, including labor.Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 30 21 22 23 24 Estimated cost to correct, repair, or replace $81,661 A complete stair replacement inlcuding new balusters, treads and risers usually osts between $4,000 and $8,000. Over spanned floor joists $20,000 Costs to correct over spanned floor joists can run $10,000 to $30,000 or more for a typical home, depending on the size and the ease of access to repair. Lower level stair to main level needs to be replaced; does not meet riser height, run or head clearance $5,000 Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 31 Replacement Cost Estimate 4662 Dakota Street SE Prior Lake, MN 55372 SINGLE FAMILY ATTACHED: 1st Floor Wood Frame $109.00 x =-$ 2nd Floor $57.00 x 0 =-$ SINGLE FAMILY DETACHED: 1st Floor Wood Frame $118.00 x 1140 =134,520.00$ 2nd Floor $60.00 x 195 =11,700.00$ GARAGE: Wood Frame $47.80 x 0 =-$ Slab On Grade Garage $22.00 x 0 =-$ BASEMENT: Finished $30.00 x 0 =-$ Unfinished $23.00 2 972 =22,356.00$ Crawl Space $22.00 x 0 =-$ 3 Season Porch $47.00 x 0 =-$ Screen Porch or front Stoop $32.00 x 0 =-$ Deck $15.00 x 192 =2,880.00$ Fireplace: Masonry $7,000.00 x 0 =-$ Stacked Masonry $5,000.00 x 0 =-$ Gas $3,000.00 x 0 =-$ Other Total Valuation 171,456.00$ Contractor's Valuation Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 32 PROPERTY INSPECTION REPORT FOR THE PURPOSE OF DETERMINING CONDITION OF BUILDINGS TEST AS DEFINED BY MN STATUTES, SECTION 469.174, SUBDIVISION 10 1. Building Name: 4664 Dakota Street SE 2. Parcel No: 250010550 3. Building Address: 4664 Dakota Street SE, Prior Lake, MN 55372 4. Inspector(s) Name(s): Alan Ernste 5. Inspection Date: October 22, 2021 6. Inspection Time: 2:15 PM 7. Inspection Type: Interior Yes Exterior Yes 8. Building Vacant: Yes X No 9. Estimated Replacement Cost: $148,368 10. Estimated Cost to Correct Building Code Deficiencies: $69,915 11. Percentage of Replacement Cost: 47.12% Note: Details supporting the calculation of Items 9 and 10 above should be included as an attachment to the report. DESCRIPTION OF CONDITION DEFICIENCIES: Minnesota Statutes, Section 469.174, Subdivision 10, states that a building is Structurally Substandard if it contains “defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.” 12. Details on Defects in Structural Elements: There are several cracks in the building foundation; the rear cedar deck is rotting and needs to be replaced; the roof is approximately 23 years old with curling shingles and needs to be replaced; and floor joists are over spanned 13. Combination of Deficiencies: 1. Essential Utilities and Facilities ➢ Main level restroom sink is not properly vented ➢ Kitchen sink is not properly vented Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 33 ➢ No carbon monoxide detectors exist ➢ Several windows need to be replaced ➢ Flat sanitary sewer line needs to be corrected ➢ Existing 60 Amp electrical service needs to be upgraded to 100 Amp ➢ Water heater not connected and is not vented properly ➢ New furnace is needed ➢ Basement plumbing not vented properly 2. Light and Ventilation 3. Fire Protection/Adequate Egress 4. Layout and Condition of Interior Partitions/Materials ➢ Floor joists are over spanned ➢ Lower-level stair to main level needs to be replaced as it does not meet riser height, run, or head clearance ➢ Main-level stair to upper level needs to be replaced as it does not meet riser height, or run 5. Exterior Construction ➢ Roof is approximately 23 years old with curling shingles and needs to be replaced ➢ Rear cedar deck is rotting and needs to be replaced ➢ Several cracks in all sides of the home foundation ➢ Chimney repair and roof vents are needed 6. Other 14. Overview of Condition Deficiencies: The home is in poor condition and has not been maintained. There are foundation cracks, rotting windows, rotting decking material, roof in need of replacement, and several plumbing repairs needed. 15. Description of Code Deficiencies: Floor joists are over spanned and need to be corrected; two stairwells exist and neither meets required riser height, run, or head clearance; proper venting is needed on restroom and kitchen sinks; CO detectors are needed throughout the home; and rear deck is a hazard and needs to be replaces. 16. Energy Code [The city may decide is does not want to count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.174, Subdivision 10(b)) defined as “structurally substandard. The city will need to provide direction to the Inspector as to whether energy code deficiencies should be counted toward meeting the conditions test.] Energy code deficiencies were not specifically evaluated. 17. Photographs Documenting Interior and Exterior of Building Attached to this report are photos of the subject property offered as supporting documentation to the information included in this report. Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 34 18. Summary of Inspector’s Qualifications: Al Ernste is a Minnesota Certified Building Official and currently serves as the Building Official for the City of Prior Lake. Mr. Ernste’s experience includes 20 years working in the construction industry, serving as a laborer, carpenter, and Project Superintendent. Mr. Ernste operated his own Residential Construction Contracting and Estimating business for nine years and has 24 years of experience in building inspections, including 21 years serving as a Building Official for the cities of Faribault and Prior Lake. 19. Summary of Deficiencies: It is my professional opinion that this building is Substandard as defined by Minnesota Statutes, Section 469.174, Subdivision 10c. a) Building Code deficiencies total more than 15% of replacement cost. b) Substantial renovation is required to correct conditions found. Date 10/28/2021 Title Building Official License # 1935 Name Alan Ernste Signature Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 35 Condition of Building Test Interior and Exterior Photo Documentation 4664 Dakota Street SE, Prior Lake, MN 55372 Photo #Description Photo Estimated Cost of Repair / Replacement Description 1 2 3 4 The average cost to repair foundation problems is $4,511, with most homeowners spending between $2,318 and $6,750. Minor crack repairs cost $620 or more to fix, while major repairs that require hydraulic piers can cost $10,000 to $15,000. Due to extensive foundation work needed on the entire foundation, repair costs are estimated at $8,000 $8,000Exterior foundation cracks Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 36 5 6 7 8 Front deck in disrepair and needs maintenance $1,000 The areas in need of repair are approximatley 50 SF, plus railing repairs; estimated repair cost is $1,000 A cedar deck can cost $20-$75, or more, per square foot; average ($47.50). The deck is 204 SF, with a replacement cost of $9,690 $9,690Rear deck repairs needed to replace rotting wood Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 37 9 10 11 12 Additional roof venting needed $900 Installing a roof vent costs between $300 and $650 on average, including labor and materials; three additional vents at $300 ea. = $900 A typical range for roof replacement costs for a home of this size is between $5,100 and $10,000. $7,000 Roof in poor condition and needs to be replaced; approx. age 23 years Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 38 13 Chimney is rusted and should be replaced $600 Average repair costs, including labor, for a metal chimney is $250 - $1,200 14 There are no carbon monoxide detectors in the home $1,200 $1,200 is estimated to install smoke and CO detercters throughout the home 15 Plumbing: kitchen sink not properly vented $1,000 Estimated cost to properly vent sink is $400 plus $600 for the wall patch 16 Plumbing: main level restroom sink not properly vented no photo $1,000 Estimated cost to properly vent sink is $400 plus $600 for the wall patch Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 39 17 Window in front porch not tempered glass and needs to be replaced $625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 ($175). 18 Window by stairwell not tempered glass and needs to be replaced $625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 ($175). 19 Upper window by stairwell not tempered glass and does not meet egress requirements; needs to be repaired and replaced $625 Average replacement windown costs $150 to $750 ($450) for the window alone. Labor costs average an extra $100 to $250 ($175). 20 Lower level stair to main level needs to be replaced; does not meet riser height, run, or head clearance $5,000 A complete stair replacement inlcuding new balusters, treads and risers usually osts between $4,000 and $8,000 Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 40 21 Main level stair to upper level needs to be replaced; does not meet riser height and run $5,000 A complete stair replacement inlcuding new balusters, treads and risers usually osts between $4,000 and $8,000 22 Upper level does not provide adequate clearance; ceiling or roof would need to be raised to make habitable The estimated cost of this repair far exceeds the value that would result. For this reason, this space is viewed as non- habitable and no cost estimate is provided 23 Plumbing repairs needed to correct flat sanitary sewer line $400 Plumbing repairs to correct this issue are estimated at $400 24 Basement plumbing not propely vented $1,000 Estimated cost of $1,000 to properly vent plumbing Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 41 25 Over spanned floor joists $20,000 Costs to correct over spanned floor joists can run $10,000 to $30,000 or more for a typical home, depending on the size and the ease of access to repair 26 Existing 60-amp electrical service needs to be upgraded to 100 Amp $1,500 Average cost, inlcuding labor, to install a 100 Amp service is $1,200 - $2,500 27 Furnace not functioning and needs to be replaced $4,000 A furnace replacement costs $2,000 to $5,400 on average for a new home furnace and installation labor 28 Water heater not connected $750 Estimated cost of $750 to correct this issue and replace venting Estimated cost to correct, repair, or replace $69,915 Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 42 Replacement Cost Estimate 4664 Dakota Street SE Prior Lake, MN 55372 SINGLE FAMILY ATTACHED: 1st Floor Wood Frame $109.00 x 0 =-$ 2nd Floor $57.00 x 0 =-$ SINGLE FAMILY DETACHED: 1st Floor Wood Frame $118.00 x 1044 =123,192.00$ 2nd Floor $60.00 x 0 =-$ GARAGE: Wood Frame $47.80 x 0 =-$ Slab On Grade Garage $22.00 x 0 =-$ BASEMENT: Finished $30.00 x 360 =10,800.00$ Unfinished $23.00 2 492 =11,316.00$ Crawl Space $22.00 x 0 =-$ 3 Season Porch $47.00 x 0 =-$ Screen Porch or front Stoop $32.00 x 0 =-$ Deck $15.00 x 204 =3,060.00$ Fireplace: Masonry $7,000.00 x 0 =-$ Stacked Masonry $5,000.00 x 0 =-$ Gas $3,000.00 x 0 =-$ Other Total Valuation 148,368.00$ Contractor's Valuation Exhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 43Tax Increment Financing District No. 1-6Coverage Test AnalysisDakota Street Redevelopment TIF Coverage Test Final plat approval prior to Redevelopment TIF approval Parcel AddressPIDTotal Land SFOccupied Land (structure)Occupied Land (public utilities)Total Occupied Land SFTotal Occupied Land as % of LotLand SF Occupied Pursuant to TIF ActTotal Land SF Occupied Pursuant to TIF Act Compared to Total Land 1New Lot 1 (70' X 300') 4662 Dakota St. SE 25001057021,0002,8141,4214,23520.17%21,0002New Lot 2 (75' X 300') 4664 & 4666 Dakota St. SE250010550 & 25001056022,5001,9111,5273,43815.28%22,50043,5004,7252,9487,67317.64%43,500100.00%Structure and Deck1,628Sidewalks214Garage and Driveway972Public Utilities 1,421TOTAL4,235Structure, Deck and Parking1,669Shed162Concrete80Public Utilities 1,527TOTAL3,4384664 & 4666 Dakota St. Coverage4662 Dakota St. CoveragePrepared by Casey McCabe, City of Prior LakeSeptember 6, 2022Planning DepartmentExhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 44NOTES CORRESPONDING TO SCHEDULE B EXCEPTIONS(Owner: City of Prior Lake)The following were provided in Old Republic National Title Insurance Company, Commitment No. (insert number), Commitment Date: August28, 2020 at (insert time) a.m, Schedule B - Part II Exceptions. The Items referenced are followed by comments made by Bolton & Menk, Inc.addressing the Item and are referenced on survey map by item number.Items, 1 & 3-9, Schedule B - Part II Exceptions are not addressed on this survey (general or non-survey related).Item 2: Roadways, streams or easements, if any, not shown by the public records, riparian rights and the title to any filled in lands.- Only those roadways, streams, easements or riparian rights contained in the above mentioned title commitment are shown on this survey.(Owner: Prior Lake Economic Development Authority)The following were provided in Old Republic National Title Insurance Company, Commitment No. (insert number), Commitment Date: August28, 2020 at (insert time) a.m, Schedule B - Part II Exceptions. The Items referenced are followed by comments made by Bolton & Menk, Inc.addressing the Item and are referenced on survey map by item number.Items, 1 & 3-9, Schedule B - Part II Exceptions are not addressed on this survey (general or non-survey related).Item 2: Roadways, streams or easements, if any, not shown by the public records, riparian rights and the title to any filled in lands.- Only those roadways, streams, easements or riparian rights contained in the above mentioned title commitment are shown on this survey.Item 10: Perpetual Easement for Sewer by Otto H. Dorn and Elsa P. Dorn in favor of the Village of Prior Lake recorded August 7, 1959 in Bookof Deeds 145, Page 427. (Parcel 1)- Said easement is graphically shown on this survey map.Item 11: Perpetual Easement for Sewer by Nick Wolf and Della S. Wolf in favor of the Village of Prior Lake recorded August 7, 1959 in Book ofDeeds 145, Page 424. (Parcel 2)- Said easement is graphically shown on this survey map.Item 12: Perpetual Easement for Sewer by Simon L. Tussing and Anna Tussing, in favor of the Village of Prior Lake recorded August 7, 1959 inBook of Deeds 145, Page 421. (Parcel 3)- Said easement is graphically shown on this survey map.LEGAL DESCRIPTION(Owner: City of Prior Lake)The following were provided in Old Republic National Title Insurance Company, Commitment No. (insert number), Commitment Date: August 28, 2020 at (insert time) a.m, Schedule A.Parcel 1: The Easterly 120 feet, measured parallel to 2nd Street, of Lots 3, 4, 5, and 6, Block 7, except the Westerly 75 feet thereof, City of Prior Lake, Scott County, Minnesota, ANDParcel 2: Lots 1 and 2, Block 8, Prior Lake, Scott County, Minnesota, and the East 70 feet of Lots 11 and 12, Block 8, Prior Lak, Scott County, Minnesota, together with the West 20feet of the East 70 feet of Lots 7, 8, 9 and 10, Block 8, Prior Lake, Scott County, Minnesota, together with the alley lying in said Block 8, Prior Lake, ANDThe East 50 feet of Lots 7, 8, 9 and 10, Block 8, Prior Lake, Scott County, Minnesota, together with the alley lying in said Block 8, Prior Lake, ANDThat part of Lots 7, 8, 9, 10, 11 and 12, Block 8, plat of Original Town of Prior Lake, Scott County, Minnesota, lying West of the East 70.00 feet thereof, together with the East 1/2 ofthe vacated Second Street according to the plat of Original Town of Prior Lake, lying adjacent to said Lots 7, 8, 9, 10, 11 and 12 of said Block 8.(Owner: Prior Lake Economic Development Authority)The following were provided in Old Republic National Title Insurance Company, Commitment No. (insert number), Commitment Date: August 28, 2020 at (insert time) a.m, Schedule A.Parcel 1: The Westerly Seventy (70) feet of Lots 3, 4, 5 and 6, Block 8, City of Prior Lake, Scott County, Minnesota; ANDParcel 2: The East 37.5 feet of Lots 3, 4, 5 and 6, Block 8, City of Prior Lake, according to the recorded plat thereof, Scott County, MN; ANDParcel 3: The East 75 feet of Lots 3, 4, 5 and 6, except the East 37.5 feet thereof, all in Block 8, City of Prior Lake, Scott County, MN.UTILITY AND SITE DATAUTILITIES:Underground utility lines and structures are shown in an approximate way only,according to information provided by others. A request that utilities be located forthis survey was made through Gopher State One Call (Ticket No. 202732729,202732760, 202732797, 202732837, 202732910 & 202802969). The undergroundutility lines and structures shown on this map represent the information provided toBolton & Menk, Inc. as a result of that request. The surveyor does not guaranteethat the information provided was either complete or accurate. The surveyor doesnot guarantee that there are no other underground utility lines and structures,active or abandoned, on or adjacent to the subject property.EXISTING AREA:City of Prior Lake:Parcel 1 = 15,600 sq. ft. (0.358 ac.)Parcel 2 = 70,900 sq. ft. (1.628 ac.)Prior Lake Economic Development Authority:Parcel 1 = 14,000 sq. ft. (0.321 ac.)Parcel 2 = 7,500 sq. ft. (0.172 ac.)Parcel 3 = 7,500 sq. ft. (0.172 ac.)Total = 115,500 sq. ft. (2.651 ac.)PROPOSED AREAS:Lot 1: 72,000 sq. ft. (1.653 ac.)Lot 2: 21,000 sq. ft. (0.482 ac.)Lot 3: 18,000 sq. ft. (0.413 ac.)Outlot A: 4,500 sq. ft. (0.103 ac.)ZONING CODE:Existing zoning classification: TC - Town CenterMinimum Lot Width: 30 ft.Building Setbacks:Front Yard:Minimum Setback: NoneMaximum Setback: 10 feet measured from the right-of-waySide Yard:Minimum Setback: NoneMaximum Setback: 10 feet unless parking is located within the side yardRear Yard:Minimum Setback: NoneMinimum Floor Area Ratio: 0.5Build-To Line: Along Main Avenue a build-to line is established a distance of 5 feetfrom the inner edge of the street right-of-way (in most cases, this is the inner edgeof the sidewalk). At least 70% of the building facade that fronts Main Avenue mustbe built out to this line.Maximum Height: 55 feetMinimum Height: 25 feet or two storiesSURVEYOR'S NOTES1.The subject property is Abstract property.2.Orientation of the bearing system is based upon the north line of the NortheastQuarter of Section 2, Township 114, Range 22, Scott County, Minnesota, whichis assumed to bear North 89 degrees 36 minutes 02 seconds West.3.The vertical datum is based upon Minnesota Department of TransportationGeodetic Monument "7001 Q" which has an elevation of 948.52 feet (NAVD 88).4.Bolton & Menk, Inc. did not determine ownership of adjacent land.5.The exterior building lines shown are of the building footprint as measured atground level. The building foundation, which is not visible, may extend beyondthe exterior building lines shown.6.Subject property has constructed vehicular and pedestrian ingress and egressto/from Dakota Street SE.7.Field work was completed on October 13, 2020.OWNER/SUBDIVIDER City of Prior Lake &Prior Lake Economic Development Authority4646 Dakota St. SEPrior Lake, MN 55372SURVEYORBolton & Menk, Inc.12224 Nicollet AvenueBurnsville, MN 55337-1649 12224 NICOLLET AVENUEBURNSVILLE, MINNESOTA 55337(952) 890-0509H:\PLAK\0T1122828\CAD\C3D\122828_V_PROP_E1.dwg 8/23/2021 3:04 PM©Bolton & Menk, Inc. 2021, All Rights ReservedFOR:DRAWN BY:FIELD BOOK:JOB NUMBER:RPRELIMINARY PLAT4646, 4662, 4664 & 4666 DAKOTA ST. SE, PRIOR LAKE, MN 55372ALL OF BLOCK 8& PART OF LOTS 3 - 6, BLOCK 7PRIOR LAKESCOTT COUNTY, MNCITY OF PRIOR LAKEH:\PLAK\0T1122828\CAD\C3D\SDB_122828_Scott Co0T1.122828MEA & ERWFILE NO. 5384 DWG. NO. 3939S2-T114-R22-12CITY HALL PLAZAPRELIMINARY PLATSHEET 1 OF 2 SHEETS_____________________________________Eric R. WilfahrtLicense Number 46166SURVEYOR'S CERTIFICATIONI hereby certify that this survey, plan, or report was prepared by me orunder my direct supervision and that I am a duly Licensed Land Surveyorunder the laws of the State of Minnesota. ________________Date8/23/2021DRAFTExhibit VI TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 DRAFT FOR PUBLIC HEARING, NOVEMBER 7, 2022 45I=954.85GF F EEEEEEEEG G G G XX X X X G G GGXXXXXXXXXXXXXXXXXXXGG GGGGGGGGGGGGGGGGGCCCCCCCC C G GGGGGGGGGGGGGGGGGGGGGGGGG G E E E EEEEEEEEEEEEEEE E E E EE>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> > > > > > > > >> >> >> >> >>>>>>>>>> >> >>>>>>>>>>>>>>>>>>>> >> >> > > >>>> >> >> >>>>>>>>>>NO TRE S P A S S I N G S I G N PIPE INT A K E FROM A C UNIT BOULDERBOULDERBOULDERBOULDERVISITOR P A R K I N G S I G N OVERHANGOUTLET OUTLETHANDICAPPEDPARKING SIGNVISITOR PARKING SIGNROCKSBOULDER METAL STATUEBOULDERMEMORI A L PLAQUE BOULDER CONDUIT WATERFAL L F E A T U R E STATUEON CONBOULDERPARK RULES SIGN1 5 " P V C FIRE PITCHAIN LI N K F E N C E ( 4 ' H E I G H T )BITBITBIT BIT BITBITBITBITCON ELEC. TRA N S F O R M E R ( 6 . 3 5 ' x 3 . 5 5 ' ) ON CON C R E T E B A S E CON CONCONCONCON CONCONCRET E CONCRETECONCONCONWOOD S T E P S CONCON CONCONPAVERSCONCONCRETE C&GCONCRETE C&GSTOP SIG N NO PARKINGSIGNPED CROSSING SIGNSTOP SIGNNO PARKING SIGNLANDSCAPINGMULCHMULCH, P L A N T S , & T R I M LANDSCAPINGMULCH W I T H ROCK ED G I N G RAIN GA R D E N WITH RO C KEDGING LANDS C A P I N GLANDSCAPING L A N D S C A P IN G MUL C H , P L A N T S , & T R I M BOULDER RET. WALLR E T . W A L L BOULDER R E T . W A L L CONCRETE RET. WALLWOODRET. WALLBLOCK RE T . W A L L BLOCK RE T . W A L L BLOCK RE T . W A L L BLOCK RET. WALLBLOCK RET. WALL6" PVC15" R C P 1 5 " R C P 12" PVC12" P V C 12" PV C 10" P V C 6" PVC 1 0 " P V C 6" PVC OVERHEAD PARK ENTRANCE SIGN12" RCP12" RCP8" VCP8" VCP 8" VCP 8" VCP8" VCP8" VCP8" VCP >>10" PVC8 " V C P 8" VCP6" P V C BITBENCHMARKTOP NUT HYDRANTELEV: 963.81 (NAVD 88)BENCHMARKTOP NUT HYDRANTELEV: 965.48 (NAVD 88)BENCHMARKTOP NUT HYDRANTELEV: 964.70 (NAVD 88)BENCHM A R K TOP NUT H Y D R A N T ELEV: 96 0 . 9 2 ( N A V D 8 8 )C-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-DC-D C-D C-D C-D C-D C-D C-D C-D C-D C-D C-D C-D C-D C- D C-D MEDIACO M PRIOR LAKE CITY HALLCENTERPOINT ENERGYCENTERPOINT ENERGYXCEL ENERGYPILL A R GRATEWOOD WALKWAYWITH RAILINGPLANTER BOXBRICK WALLGENERATOR (5.25' HEIGHT)TRANSFORMER (5' HEIGHT)ELEC. MET E R ( 5 ' H E I G H T ) GARAGE SHED12" PVC8" PVCBUILDINGOVERHANGBOULDER BOULDE R OVERHA N G PILLARDE C K DECK PAVERSPAVERSDECK DECKHOUSE HOUSE WOOD S T E P S RAILING CHAIN LIN K F E N C E RAILING CON STE P S CONCRET E STEPS WOOD S T E P S LANDSCAPINGWOOD RET.WALLOVERHA N G CONBITCONCRET E C & G 15" RCP15" RCPMETAL GATE>>>>>> OUTLET CITY VEHICLEPARKING SIGNEDGE OF WATERWATER ELEV. ON 10/13/2020 = 920.99 (NAVD 88)WOOD F E N C E MULTIPL E T E N A N T B U I L D I N G DECK DECKlllllllllllllllllllllllllllll l l 15" RCPBUILDIN GOVERHA N G MHSNR=955.50I=E (8" VCP)950.30I=I=I=I=I=MHSNR=962.28I=S (8" VCP)W (8" VCP)N (8" VCP)W (8" VCP)945.72945.49I=I=945.53I=949.68I=I=CBCCR=948.87I=W (15" RCP)NE (15" RCP)943.91943.97I=I=I=I=I=MHSTR=943.04I=N (15" RCP)SW (15" RCP)938.14938.10I=I=I=I=I=CBCCR=929.02I=NE (15" PVC)W (6" PVC)S (15" RCP)SUMP927.02925.36I=I=924.94I=919.22I=I=MHSNR=958.08I=N (8" VCP)S (8" VCP)E (8" VCP)945.43945.45I=I=945.79I=I=I=MHSNR=959.78I=S (8" VCP)E (8" VCP)W (8" VCP)N (6" VCP)949.04948.83I=I=948.46I=948.74I=I=MHSNR=957.21I=E (8" VCP)W (8" VCP)946.11946.12I=I=I=I=I=CBCCR=956.00I=SW (6" PVC)NE (10" PVC)951.16951.20I=I=I=I=I=MHSNR=956.77I=S (8" VCP)E (8" VCP)W (8" VCP)SW (8" VCP)946.10946.09I=I=951.17I=946.35I=I=CBCCR=950.77I=N (12" PVC)S (12"PVC)946.83946.76I=I=I=I=I=CBCCR=929.42I=SW (15" PVC)926.69I=I=I=I=I=CBCCR=952.68I=S (10" PVC)N (12" PVC)949.83949.88I=I=I=I=I=MHSTR=958.48I=N (15" RCP)W (15" RCP)951.33951.32I=I=I=I=I=MHSTR=957.06I=NW (15" RCP)E (15" RCP)951.35951.36I=I=I=I=I=MHSTR=956.97I=N (15" RCP)S (15" RCP)950.72947.06I=I=I=I=I=CBCCR=948.56I=E (15" RCP)SW (15" RCP)SE (10" PVC)944.46944.46I=I=944.51I=I=I=MHSTR=949.75I=S (15" RCP)NE (15" RCP)945.18946.75I=I=I=I=I=CBRC CGFL1R=955.53I=SE (15" RCP)SUMP945.53951.48I=I=I=I=I=CBRC CGFLR=958.48I=NE (12" RCP)956.08I=I=I=I=I=CBRC CGFL ER=957.09I=NW (12" RCP)955.09I=I=I=I=I=CBRC CGFL1R=957.43I=SW (12" RCP)SE (12" RCP)N (12" PVC)955.03955.21I=I=954.98I=I=I=HOUSE 707020504512075707537.5(CITY - PARCEL 2)(EDA - P A R C E L 1 ) (EDA - P A R C E L 3 ) (EDA - P A R C E L 2 )DAKOTA STREET SEERIE AV E N U E S E (NOT CO N S T R U C T E D ) 66 666660.560.55.55.566 66 66 66 6666(CITY - P A R C E L 1 )S 73°20'04" E 333.00S 16°40'1 7 " W 3 0 0 . 0 0N 73°20'04" W 411.00N 16°40' 1 7 " E 2 0 0 . 0 0 S 73°20'04" E 78.00N 16°40' 1 7 " E 1 0 0 . 0 0 125.00 70.00188.00266.0070.0060.00N 16°40' 1 7 " E 3 0 0 . 0 0 N 16°40' 1 7 " E 3 0 0 . 0 0 N 89°36'02" W 1445.96S 16°40'1 7 " W 5 1 8 . 4 4(PUBLIC ROADWAY)ARCADI A AVENUE S E (PUBLIC ROADW A Y ) ERIEAVENUE S E (PUBLIC ROADW A Y ) (PUBLIC R O A D W A Y )OWNER: CITY OF PRIOR LAKEPID: 259020010ADDRESS: NONEZONE: R-1OWNER: CITY OF PRIOR LAKEPID: 250150030ADDRESS: NONEZONE: R-1OWNER: HOLY TRINITY UNITED METHODISTPID: 250010440ADDRESS: 16150 ARCADIA AVE. SE.ZONE: TC-TOWNER: CITY OF PRIOR LAKEPID: 250010420ADDRESS: 4649 DAKOTA ST. SE.ZONE: TCOWNER: S C O T T D . & D E B O R A H J . CARLSONPID: 250 0 1 0 4 3 0 ADDRESS : 4 6 6 7 D A K O T A S T . S E . ZONE: TC OWNER: M E R T E N S PROPERT I E S L L C PID: 250 0 1 0 4 0 0 ADDRESS : N O N E ZONE: T C OWNER: MULTIPLEPID: MULTIPLEADDRESS: MULTIPLEZONE: TCOWNER: JOSEPH A. FELDMANPID: 250010530ADDRESS: 4580 DAKOTA ST. SE.ZONE: TCADDITIO N A L R E A L E S T A T E CIC NO. 1 1 2 1 , L A K E F R O N T P L A Z A C O N D O M I N I U M LOT 1LOT 3LOT 21/2" IRON PIPE IN CONC.1/2" IRON PIPE1/2" IRON PIPERLS#42309REBAR1/2" IRON PIPE1/2" IRON PIPERLS# 101832" IRON PIPE2 FT. ABOVE GRADE1/2" PINCHED IRON PIPEREBAR1/2" IRON PIPERLS# ?1 / 2 " I RON P I P E 1/2" IRON PIPERLS# 86251/2" IRON PIPERLS# 423092" IRON PIPERR SPIKE1/2" IRON PIPERLS# 10183T-POSTTIPPED S O U T H1/2" IRON PIPEMAG NAIL & DISKRLS# 184071/2" IRON PIPERLS#42309NORTH LINE OF NE 1/4 OFSEC. 2, TWP. 114, RGE. 22NW COR. OF NE 1/4 OFSEC. 2, TWP. 114, RGE. 22R/W PAINT MARKING(READING UNDER PAVEMENT)960960955950 9 5 5 95 0 9 4 5 9 4 0 9359309259209 6 0 960 960955950945940935930925920955950945940930925PROPERTY CORNER NOT SET(LIES IN WATER)OUTLOT A 60.0015.0015.00N 16°40' 1 7 " E 3 0 0 . 0 0 PROPOSED 10 FT. DRAINAGE& UTILITY EASEMENTPROPOSE D 5 F T . D R A I N A G E & UTILIT Y E A S E M E N T PROPOSED 10 FT. DRAINAGE& UTILITY EASEMENTPROPOSED 10 FT.DRAINAGE & UTILITYEASEMENTPROPOSED 5 FT.DRAINAGE & UTILITYEASEMENTPROPOSE D 5 F T . D R A I N A G E & UTILITY E A S E M E N TPROPOSED 10 FT. DRAINAGE& UTILITY EASEMENTPROPOSED 10 FT. DRAINAGE& UTILITY EASEMENTPROPOSED 9 FT. DRAINAGE& UTILITY EASEMENTVILLAGE OF PRIOR LAKESANITARY SEWER EASEMENTPER BK. 145 D., PG. 427(ITEM 10)VILLAGE O F P R I O R L A K E SANITAR Y S E W E R E A S E M E N T PER BK. 1 4 5 D . , P G . 4 2 4 (ITEM 11) VILLAGE O F P R I O R L A K E SANITARY S E W E R E A S E M E N T PER BK. 1 4 5 D . , P G . 4 2 1 (ITEM 12 )12224 NICOLLET AVENUEBURNSVILLE, MINNESOTA 55337(952) 890-0509RSCALE IN FEET03060H:\PLAK\0T1122828\CAD\C3D\122828_V_PROP_E1.dwg 8/23/2021 3:04 PM©Bolton & Menk, Inc. 2021, All Rights ReservedFOR:DRAWN BY:FIELD BOOK:JOB NUMBER:RPRELIMINARY PLAT4646, 4662, 4664 & 4666 DAKOTA ST. SE, PRIOR LAKE, MN 55372ALL OF BLOCK 8& PART OF LOTS 3 - 6, BLOCK 7PRIOR LAKESCOTT COUNTY, MNCITY OF PRIOR LAKEH:\PLAK\0T1122828\CAD\C3D\SDB_122828_Scott Co0T1.122828MEA & ERWFILE NO. 5384 DWG. NO. 3939S2-T114-R22-12CITY HALL PLAZAPRELIMINARY PLAT_____________________________________Eric R. WilfahrtLicense Number 46166SURVEYOR'S CERTIFICATIONI hereby certify that this survey, plan, or report was prepared by me orunder my direct supervision and that I am a duly Licensed Land Surveyorunder the laws of the State of Minnesota. ________________Date8/23/2021SHEET 2 OF 2 SHEETSBENCHBUSHCATCH BASINCURB STOPCATCH BASINCLEAN OUTFLARED END / APRONHANDICAP PARKINGFIRE HYDRANTMAILBOXMANHOLE-SANITARY SEWERMANHOLE-STORM SEWERMANHOLE-UTILITYPEDESTRIAN PUSH BUTTONPEDESTAL-COMMUNICATIONVALVE POST INDICATORLIGHT POLEPOSTPICNIC TABLETREE-DECIDUOUSSIGN TRAFFICWATER SPIGOTIRRIGATION SPRINKLER HEADIRRIGATION VALVE BOXTRANSFORMER-ELECTRICTRASH CANVALVETREE-CONIFEROUSMETERBIRD FEEDERAIR CONDITIONERAUTO SPRINKLER CONNECTIONLIGHT-GROUNDSIGN NON TRAFFICMONUMENT FOUNDBENCH MARKCAST IRON MONUMENT FOUNDELECTRIC UNDERGROUNDGAS UNDERGROUNDCOMMUNICATION UNDERGROUNDFIBER UNDERGROUNDWATER SYSTEMSTORM SEWERSANITARY SEWERINTERMEDIATE CONTOURINDEX CONTOURSECTION LINE>>>>CCEEFFGGllEASEMENTADJACENTFENCERIGHT OF WAYXXXXCURB & GUTTERWATER EDGEEDGE OF TREESUTILITY MARKERRETAINING WALL1/2" IRON PIPE MONUMENT TO BE SETMARKED BY RLS# 46166DRAFTExhibit VI RC 18- PROPOSED TAX INCREMENT FINANCING (REDEVELOPMENT) DISTRICT NO. 1-6 City Council Meeting November 7, 2022 Tammy Omdal, Northland Public Finance RC 18- City Council Consideration City Council is asked to consider a resolution approving the enlargement of Municipal Development District No. 1 and a Modified Development Program related thereto; approving the establishment of Tax Increment Financing District No. 1-6 (Prior Lake Lofts) within Municipal Development District No. 1 and approving a Tax Increment Financing Plan thereto; and authorizing an interfund loan 2 RC 18- TIF Plan The laws that govern TIF require the following, among other requirements for the TIF Plan: Describe the project to be financed with tax increment and provides specific information about the development activity that is to occur TIF plan created by the City, reviewed by the county and school district, and approved by the City, authorizes the establishment of the TIF district Each type of TIF district has different statutory requirements governing its creation which require specific findings to be included in the TIF Plan 3 RC 18-Proposed TIF District Application from Prior Lake B Squared Ventures, LLC Project includes a 98-unit apartment building, a street front restaurant of approximately 2,600 square feet, a rooftop deck for restaurant customers, a separate rooftop deck for tenants, with 134 in-building parking stalls and 28 surface stalls 4 RC 18- Project Site Site is currently occupied by two residential single- family buildings, upon inspection were found to be sub - standard pursuant to the TIF Act Condition of the buildings and overall area of the site meet the statutory criteria for establishment of a “redevelopment” TIF district 5 RC 18- Proposed Boundaries of TIF District 6 RC 18- What is Tax Increment Financing (TIF)? TIF is a financing method to capture increase in value from new development Tax increments are generated by an increase in property taxes resulting from the increase in taxable market value Property taxes (increments) attributed to the increase in valuation are used to finance or reimburse (pay-go basis) TIF eligible project costs 7 RC 18- How Does TIF Work? Property taxes on base valuation, value that existed before development, will be payable to local taxing jurisdictions and are not captured for TIF Difference between base valuation and new valuation will be captured for TIF 8 RC 18- $0.7 $25.5 Base Value vs. Captured Value New construction by Developer (Captured Value) Existing buildings and land value in TIF District (Base Value) Estimated $26.3 Million Total Taxable Market Value at Completion 9 RC 18-Estimated Annual Property Taxes and TIF from TIF District Taxing Jurisdictions Current Taxes Received Taxes Received by Taxing Jurisdictions from Property within TIF District Captured Taxes (Tax Increment) from TIF District City $1,345 $4,149 $97,192 School District $2,026 $49,868 $88,936 Scott County $1,346 $2,795 $97,264 Other Taxing Jurisdictions $411 $4,635 $31,530 Total $5,128 $61,447 $314,922 Notes: 1. Estimated based on estimated taxable market value upon completion of project and tax rates for tax year 2022. 10 RC 18-TIF Plan –Budget for TIF District Total Based on 26-Year Duration for TIF District Total Based on 15-Year Duartion for TIF District Estimated Tax Increment Revenues (from tax increment generated by the district) Tax increment revenues distributed from the county $9,080,000 $4,860,000 Interest and investment earnings $50,000 $50,000 Total Estimated Tax Increment Revenues $9,130,000 $4,910,000 Estimated Project/Financing Costs (to be paid or financed with tax increment) Project costs Land/building acquisition $1,176,000 $1,176,000 Site improvements/preparation costs $1,824,000 $1,824,000 Other qualifying improvements $1,850,000 $385,000 Administrative costs $150,000 $100,000 Estimated Tax Increment Project Costs $5,000,000 $3,485,000 Interest expense $4,130,000 $1,425,000 Total Estimated Project/Financing Costs to be Paid from Tax Increment $9,130,000 $4,910,000 Estimated Financing Total amount of bonds to be issued $5,000,000 $3,485,000 11 RC 18- Terms for Assistance to Developer City Council to consider approval of a TIF agreement with the Developer after approval of the TIF District EDA reviewed the TIF Plan and recommended approval TIF Plan provides the “framework” for the terms for assistance to the Developer Specific terms for assistance with the Developer to be included in the TIF agreement remain subject to review 12 RC 18- Terms for Assistance to Developer Based on current market conditions, the Project as proposed, would not happen solely through private investment in the “reasonably foreseeable future” Without TIF, return to investors and debt service coverage are not at sufficient levels that it is reasonable to assume the Project would proceed 13 RC 18-Terms for Assistance to Developer Decision to not approve the TIF Plan and establishment of the TIF District does not necessarily mean no development will occur… but rather that the “Project as proposed” would not proceed 14 RC 18- Key Steps in TIF Approval Process October 7 -Draft TIF Plan was distributed to county and school district for 30-day review/comment period TIF Plan has been updated to incorporate County comments received October 10 -EDA recommended City Council approve TIF District/Plan October 24 -Planning Commission approved findings that plans conform to the City plans for development November 7 -Public hearing and City Council consideration of approval of TIF District/Plan* * At a future meeting date, after November 7, City Council may consider approval of TIF assistance agreement with the Developer 15 RC 18- Northland Public Finance The public finance group of Northland Securities, Inc. 150 South Fifth Street, Suite 3300 Minneapolis, Minnesota 55402 800-851-2920 www.northlandsecurities.com/public_finance Member of FINRA and SIPC | Registered with SEC and MSRB Questions Tammy Omdal 612-851-4964 tomdal@northlandsecurities.com 16