HomeMy WebLinkAbout2018-04-23 PACKET 06.1.B.STAFF REPORT CASE: CP2018-031
ITEM: 6.1B
PUBLIC MEETING DATE: 4/23/2018 TENTATIVE COUNCIL REVIEW DATE: 5/16/2018
APPLICATION
APPLICANT: RJ Ryan Construction, on behalf of Modern Automotive Performance
REQUEST: Find that a modification to the Development Program for Development
District No. 1 and the establishment of Tax Increment Financing (TIF)
District No. 1-18 for construction of the addition to Modern Automotive
Performance conforms to the Comprehensive Plan.
SITE DATA
LOCATION:
ZONING:
GUIDED LAND USE
9800 Hemingway Avenue South
1-2, General Industry
Industrial
LAND USE OF ADJACENT PROPERTIES: CURRENT
GUIDED
NORTH:
Industrial
Industrial
EAST:
Industrial
Industrial
SOUTH:
Industrial
Industrial
WEST:
Residential
Low Density Residential
SIZE:
Addition = 24,080 square feet
DENSITY:
N/A
RECOMMENDATION
Adopt Resolution PC2018-001.
Cottage
Grove COTTAGE GROVE PLANNING DIVISION
�
here Pride and Prosperity Meet
Planning Staff Contact: Christine Costello, Economic Development Director
651-458-2824 — ccostello(o)cottagegrovemn.gov
Application Accepted:. March 28, 2018 60 -Day Review Deadline: May 27, 2018
City of Cottage Grove Planning Division • 12800 Ravine Parkway South • Cottage Grove, MN 55016
Planning Staff Report
TIF Development District No. 1 Modification
Planning Case SP 2018-026
April 23, 2018
Proposal
The City and the Economic Development Authority (EDA) are considering modifying Tax Incre-
ment Financing (TIF) District No. 1. The EDA will consider creating a new TIF District (No. 1-18)
at their meeting on May 8. The City Council will hold the public hearing on May 16.
Minnesota Statutes require that the Planning Commission review the new district for conformance
to the City's Comprehensive Plan. If the Commission finds that the changes to the TIF district are
consistent with the plan, the attached resolution should be adopted and forwarded to the City
Council.
TIF District No. 1-18 is proposed for the expansion of Modern Automotive Performance within the
Cottage Grove Business Park. A map of the proposed district and the TIF Plan are included with
this report.
This proposed district would capture tax capacity resulting from the development of the property
for a period of nine years. The proceeds (tax increment) would be used to fund supporting infra-
structure and land costs related to the project.
Analysis
Cottage Grove Future Vision 2030 (Comprehensive Plan) includes the following elements which
impact the creation of TIF districts:
Community Vision
• Guiding Principle: Increase Employment. Adding jobs in the City allows more residents to
work in Cottage Grove and spurs overall economic activity. Areas of new industrial and com-
mercial development are proposed which will generate new employment in the city.
Land Use
• The proposed TIF District No. 1-18 is located in the area designated and zoned for industrial
uses consistent with the Comprehensive Plan.
• Goal: Existing residential, commercial and industrial areas will continue to be main-
tained and revitalized. Policy 2.9 "The City and Economic Development Authority will use
available resources to meet redevelopment needs."
Planning Staff Report
TIF Development District No. 1 Modification
April 23, 2018
Page 2 of 2
Recommendation
Given the information provided above, TIF District No. 1-18 (Modern Automotive Performance)
would conform to the Comprehensive Plan by adding jobs and continuing to maintain and revital-
ize an existing industrial area. Staff therefore recommends the Planning Commission approve the
attached resolution finding that TIF District No. 1-18 within Development District No. 1 is in con-
formance with the City's Comprehensive Plan.
Prepared by:
Christine Costello
Economic Development Director
Attachments:
— TI F No. 1-18 Plan
— Planning Commission Resolution
PLANNING COMMISSION
CITY OF COTTAGE GROVE, MINNESOTA
RESOLUTION NO. PC2018-001
RESOLUTION OF THE CITY OF COTTAGE GROVE PLANNING COMMISSION
FINDING THAT A MODIFICATION TO THE DEVELOPMENT PROGRAM FOR
DEVELOPMENT DISTRICT NO. 1 AND A TAX INCREMENT FINANCING PLAN
FOR TAX INCREMENT FINANCING DISTRICT NO. 1-18 (MODERN AUTOMOTIVE)
CONFORM TO THE GENERAL PLANS FOR THE DEVELOPMENT AND
REDEVELOPMENT OF THE CITY
WHEREAS, the Cottage Grove Economic Development Authority (the "EDA") and
the City of Cottage Grove (the "City") have proposed to adopt a Modification to the
Development Program for Development District No. 1 (the "Development Program
Modification") and a Tax Increment Financing Plan for Tax Increment Financing District
No. 1-18 (Modern Automotive) (the "TIF Plan") therefor (the Development Program
Modification and the TIF Plan are referred to collectively herein as the "Program and
Plan") and have submitted the Program and Plan to the City Planning Commission (the
"Commission") pursuant to Minnesota Statutes, Section 469.175, Subd. 3, and
WHEREAS, the Commission has reviewed the Program and Plan to determine
their conformity with the general plans for the development and redevelopment of the City
as described in the comprehensive plan for the City.
NOW, THEREFORE, BE IT RESOLVED by the Commission that the Program and
Plan conform to the general plans for the development and redevelopment of the City as
a whole.
Passed this 23rd day of April, 2018.
Chair
ATTEST:
Secretary
SHEARAff- 10
As of April 17, 2018
Draft for Planning Commission
Modification to the Development Program
for Development District No. 1
and the
Tax Increment Financing Plan
for the establishment of
Tax Increment Financing District No. 1-18 (Modern Automotive)
(an economic development district)
within
Development District No. 1
Cottage Grove Economic Development Authority
City of Cottage Grove
Washington County
State of Minnesota
Public Hearing: May 2, 2018
Adopted:
Prepared by: EHLERS 651-697-8555 -i306 e Drive, ieinne1EHLERS 6516978500�w.hlesncom
Table of Contents
(for reference purposes only)
Section 1 - Modification to the Development Program
for Development District No. 1 ............................................. 1-1
Foreword............................................................. 1-1
Section 2 - Tax Increment Financing Plan
for Tax Increment Financing District No. 1-18 (Modern Automotive) ................
2-1
Subsection 2-1.
Foreword ...............................................
2-1
Subsection 2-2.
Statutory Authority ........................................
2-1
Subsection 2-3.
Statement of Objectives ...................................
2-1
Subsection 2-4.
Development Program Overview ............................
2-1
Subsection 2-5.
Description of Property in the District and Property To Be Acquired
. 2-2
Subsection 2-6.
Classification of the District .................................
2-2
Subsection 2-7.
Duration and First Year of Tax Increment of the District ...........
2-3
Subsection 2-8.
Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment
and Notification of Prior Planned Improvements ................
2-3
Subsection 2-9.
Sources of Revenue/Bonds to be Issued ......................
2-4
Subsection 2-10.
Uses of Funds ...........................................
2-5
Subsection 2-11.
Fiscal Disparities Election ..................................
2-5
Subsection 2-12.
Business Subsidies .......................................
2-6
Subsection 2-13.
County Road Costs .......................................
2-7
Subsection 2-14.
Estimated Impact on Other Taxing Jurisdictions .................
2-7
Subsection 2-15.
Supporting Documentation .................................
2-9
Subsection 2-16.
Definition of Tax Increment Revenues ........................
2-9
Subsection 2-17.
Modifications to the District .................................
2-9
Subsection 2-18.
Administrative Expenses ..................................
2-10
Subsection 2-19.
Limitation of Increment ...................................
2-11
Subsection 2-20.
Use of Tax Increment ....................................
2-12
Subsection 2-21.
Excess Increments ......................................
2-12
Subsection 2-22.
Requirements for Agreements with the Developer ..............
2-13
Subsection 2-23.
Assessment Agreements .................................
2-13
Subsection 2-24.
Administration of the District ...............................
2-13
Subsection 2-25.
Annual Disclosure Requirements ...........................
2-13
Subsection 2-26.
Reasonable Expectations .................................
2-13
Subsection 2-27.
Other Limitations on the Use of Tax Increment .................
2-14
Subsection 2-28.
Summary ..............................................
2-14
Appendix A
Project Description...................................................... A-1
Appendix B
Map of Development District No. 1 and the District ............................. B-1
Appendix C
Description of Property to be Included in the District ............................ C-1
Appendix D
Estimated Cash Flow for the District ........................................ D-1
Appendix E
Minnesota Business Assistance Form ....................................... E-1
Appendix F
Findings Including But/For Qualifications ..................................... F-1
Section 1 - Modification to the Development Program
for Development District No. 1
Foreword
The following text represents a Modification to the Development Program for Development District No. 1.
This modification represents a continuation ofthe goals and objectives set forth in the Development Program
for Development District No. 1. Generally, the substantive changes include the establishment of Tax
Increment Financing District No. 1-18 (Modern Automotive).
For further information, a review of the Development Program for Development District No. 1, adopted,
January 7, 1985, is recommended. It is available from the City Administrator at the City of Cottage Grove.
Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment
Financing Districts located within Development District No. 1.
Cottage Grove Economic Development Authority
Modification to the Development Program for Development District No. 1 1-1
Section 2 - Tax Increment Financing Plan
for Tax Increment Financing District No. 1-18 (Modern Automotive)
Subsection 2-1. Foreword
The Cottage Grove Economic Development Authority (the "EDA"), the City of Cottage Grove (the "City"),
staff and consultants have prepared the following information to expedite the establishment of Tax Increment
Financing District No. 1-18 (Modern Automotive) (the "District"), an economic development tax increment
financing district, located in Development District No. 1.
Subsection 2-2. Statutory Authority
Within the City, there exist areas where public involvement is necessary to cause development or
redevelopment to occur. To this end, the EDA and City have certain statutory powers pursuant to Minnesota
Statutes ("M.S.'), Sections 469.090 to 469.1082, inclusive, as amended, and M.S., Sections 469.174 to
469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing
public costs related to this project.
This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant
information is contained in the Modification to the Development Program for Development District No. 1.
Subsection 2-3. Statement of Objectives
The District currently consists of one parcel of land and adjacent and internal rights-of-way. The District is
being created to facilitate an approximately 24,000 square foot expansion to an existing office/warehouse
facility in the City. Please see Appendix A for further District information. The EDA has not entered into
an agreement, but development is anticipated to start before the end of 2018. This TIF Plan is expected to
achieve many of the objectives outlined in the Development Program for Development District No. 1.
The activities contemplated in the Modification to the Development Program and the TIF Plan do not
preclude the undertaking of other qualified development or redevelopment activities. These activities are
anticipated to occur over the life of Development District No. 1 and the District.
Subsection 2-4. Development Program Overview
1. Property to be Acquired -Selected property located within the District maybe acquired by
the EDA or City and is further described in this TIF Plan.
Relocation - Relocation services, to the extent required by law, are available pursuant to
M.S., Chapter 117 and other relevant state and federal laws.
3. Upon approval of a developer's plan relating to the project and completion of the necessary
legal requirements, the EDA or City may sell to a developer selected properties that it may
acquire within the District or may lease land or facilities to a developer.
4. The EDA or City may perform or provide for some or all necessary acquisition, construction,
relocation, demolition, and required utilities and public street work within the District.
5. The City proposes both public and private infrastructure within the District. The proposed
use of private property within the District will be fora office/warehouse space, and there will
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-1
be continued operation of Development District No. 1 afterthe capital improvements within
Development District No. 1 have been completed.
Subsection 2-5. Description of Property in the District and Property To Be Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information
on the location of the District.
The EDA or City may acquire any parcel within the District including interior and adjacent street rights of
way. Any properties identified for acquisition will be acquired by the EDA or City only in order to
accomplish one or more of the following: storm sewer improvements; provide land for needed public streets,
utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to
accomplish the uses and objectives set forth in this plan. The EDA or City may acquire property by gift,
dedication, condemnation or direct purchase from willing sellers in orderto achieve the objectives ofthis TIF
Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition
and related costs.
Subsection 2-6. Classification of the District
The EDA and City, in determining the need to create a tax increment financing district in accordance with
M.S., Sections 469.174 to 469.1794, as amended, inclusive, find that the District, to be established, is an
economic development district pursuant to M.S., Section 469.174, Subd. 12 as defined below:
"Economic development district" means a type of tax increment financing district which consists of any
project, or portions of a project, which the authority finds to be in the public interest because:
(1) it will discourage commerce, industry, or manufacturing from moving their operations
to another state or municipality; or
(2) it will result in increased employment in the state; or
(3) it will result in preservation and enhancement of the tax base of the state.
The District is in the public interest because it will meet the statutory requirement from clause 1, 2, and 3.
Pursuant to M.S., Section 469.176, Subd. 4c, revenue derived from tax increment from an economic
development district may not be used to provide improvements, loans, subsidies, grants, interest rate
subsidies, or assistance in any form to developments consisting of buildings and ancillary facilities, if more
than 15 percent of the buildings and facilities (determined on the basis of square footage) are used for a
purpose other than:
(1) The manufacturing or production of tangible personal property, including processing resulting
in the change in condition of the property;
(2) Warehousing, storage, and distribution of tangible personal property, excluding retail sales;
(3) Research and development related to the activities listed in items (1) or (2);
(4) Telemarketing if that activity is the exclusive use of the property; or
(5) Tourism facilities;
(6) Space necessary for and related to the activities listed in items (1) to (5)
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-2
In meeting the statutory criteria the EDA and City rely on the following facts and findings:
The facilities in the District meet the conditions of Purposes 1, 2, and 6.
The proposed facility will be used for manufacturing automotive parts and related activities.
Pursuant to MS, Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that
qualified under the provisions of M.S., Sections 273.111, 273.112, or 273.114 or Chapter 473H for taxes
payable in any of the five calendar years before the filing of the request for certification of the District.
Subsection 2-7. Duration and First Year of Tax Increment of the District
Pursuant to MS, Section 469.175, Subd. 1, andMS., Section 469.176, Subd. 1, the duration of the District
must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b., the duration of the
District will be 8 years after receipt of the first increment by the EDA or City. The date of receipt by the City
of the first tax increment is expected to be 2020. Thus, it is estimated that the District, including any
modifications of the TIF Plan for subsequent phases or other changes, would terminate after 2028, or when
the TIF Plan is satisfied. If increment is received in 2019, the term of the District will be 2027. The EDA or
City reserves the right to decertify the District prior to the legally required date.
Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements
Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity
(ONTC) as certified for the District will be based on the market values placed on the property by the assessor
in 2017 for taxes payable 2018.
Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning
in the payment year 2020) the amount by which the original value has increased or decreased as a result of
Change in tax exempt status of property;
Reduction or enlargement of the geographic boundaries of the district;
Change due to adjustments, negotiated or court-ordered abatements;
Change in the use of the property and classification;
Change in state law governing class rates; or
Change in previously issued building permits.
In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTO, no
value will be captured and no tax increment will be payable to the EDA or City.
The original local tax rate for the District will be the local tax rate for taxes payable 2018, assuming the
request for certification is made before June 30, 2018. The ONTC and the Original Local Tax Rate for the
District appear in the table below.
Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTC) of the District, within Development District No. 1, upon completion of
the projects within the District, will annually approximate tax increment revenues as shown in the table
below. The EDA and City request 100 percent of the available increase in tax capacity for repayment of its
obligations and current expenditures, beginning in the tax year payable 2020. The Project Tax Capacity (PTC)
listed is an estimate of values when the projects within the District are completed.
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-3
Project Estimated Tax Capacity upon Completion (PTC)
$61,730
Original Estimated Net Tax Capacity (ONTO)
$22,969
Fiscal Disparities Contribution
$13,011
Estimated Captured Tax Capacity (CTC)
$25,750
Original Local Tax Rate
1.08862 Pay 2018
Estimated Annual Tax Increment (CTC x Local Tax Rate)
$28,032
Percent Retained by the EDA
100%
Tax capacity includes a 3% inflation factor for the duration of the District. The tax capacity included in this
chart is the estimated tax capacity of the District in year 9. The tax capacity of the District in year one is
estimated to be $48,730.
Pursuant to MS, Section 469.177, Subd. 4, the EDA shall, after a due and diligent search, accompany its
request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S.,
Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which
building permits have been issued during the eighteen (18) months immediately preceding approval of the
TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase
the original net tax capacity of the District by the net tax capacity of improvements for which a building
permit was issued.
The City has reviewed the area to be included in the District and found no parcels for which building
permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the
City.
Subsection 2-9. Sources of Revenue/Bonds to be Issued
The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax
increments. The EDA or City reserves the right to incur bonds or other indebtedness as a result of the TIF
Plan. As presently proposed, the projects within the District will be financed by a pay-as-you-go
note/interfund loan/transfer. Any refunding amounts will be deemed a budgeted cost without a formal TIF
Plan Modification. This provision does not obligate the EDA or City to incur debt. The EDA or City will
issue bonds or incur other debt only upon the determination that such action is in the best interest of the City.
The total estimated tax increment revenues for the District are shown in the table below:
SOURCES OF FUNDS TOTAL
Tax Increment $207,774
Interest $20,777
TOTAL $228,551
The EDA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax increments
from the District in a maximum principal amount of $189,25 8. Such bonds maybe in the form of pay-as-you-
go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total bonded
indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval.
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-4
Subsection 2-10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate an approximately 24,000 square foot
expansion to an existing office/warehouse facility. The EDA and City have determined that it will be
necessary to provide assistance to the project(s) for certain District costs, as described. The EDA has studied
the feasibility of the development or redevelopment of property in and around the District. To facilitate the
establishment and development or redevelopment of the District, this TIF Plan authorizes the use of tax
increment financing to pay for the cost of certain eligible expenses. The estimate of public costs and uses of
funds associated with the District is outlined in the following table.
USES OF TAX INCREMENT FUNDS TOTAL
Site Improvements/Preparation $145,000
Utilities $20,000
Other Qualifying Improvements $3,481
Administrative Costs (up to 10%) $20,777
PROJECT COST TOTAL $189,258
Interest $39,293
PROJECT AND INTEREST COSTS TOTAL $228,551
The total project cost, including financing costs (interest) listed in the table above does not exceed the total
projected tax increments for the District as shown in Subsection 2-9.
Estimated capital and administrative costs listed above are subject to change among categories by
modification of the TIF Plan without hearings and notices as required for approval of the initial TIF Plan, so
long as the total capital and administrative costs combined do not exceed the total listed above. Further, the
EDA or City may spend up to 20 percent of the tax increments from the District for activities (described in
the table above) located outside the boundaries of the District but within the boundaries of the Project
(including administrative costs, which are considered to be spend outside the District), subject to all other
terms and conditions of this TIF Plan.
Subsection 2-11. Fiscal Disparities Election
Pursuant to MS., Section 469.177, Subd. 3, the EDA or City may elect one of two methods to calculate fiscal
disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b, (within the District) are
followed, the following method of computation shall apply:
(1) The original net tax capacity shall be determined before the application of the fiscal disparity
provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal
disparity commercial -industrial net tax capacity increase between the original year and the
current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section
276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6. Where the original net tax
capacity is equal to orgreater than the current net tax capacity, there is no captured tax capacity
and no tax increment determination. Where the original tax capacity is less than the current tax
capacity, the difference between the original net tax capacity and the current net tax capacity
is the captured net tax capacity. This amount less any portion thereof which the authority has
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-5
designated, in its tax increment financing plan, to share with the local taxing districts is the
retained captured net tax capacity of the authority.
(2) The county auditor shall exclude the retained captured net tax capacity of the authority from the
net tax capacity of the local taxing districts in determining local taxing district tax rates. The
local tax rates so determined are to be extended against the retained captured net tax capacity
of the authority as well as the net tax capacity of the local taxing districts. The tax generated by
the extension of the less of (A) the local taxing district tax rates or (B) the original local tax rate
to the retained captured net tax capacity of the authority is the tax increment of the authority.
The EDA or City shall submit to the County Auditor at the time of the request for certification which method
of computation of fiscal disparities the EDA or City elected.
The EDA will choose to calculate fiscal disparities by clause b.
According to M.S., Section 469.177, Subd. 3.
(c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or
(b) shall remain the same for the duration of the district, except that the governing body may
elect to change its election from the method of computation in paragraph (a) to the method in
paragraph (b).
Subsection 2-12. Business Subsidies
Pursuant to M.S., Section 116J.993, Subd. 3, the following forms of financial assistance are not considered
a business subsidy:
(1) A business subsidy of less than $150,000;
(2) Assistance that is generally available to all businesses or to a general class of similar businesses,
such as a line of business, size, location, or similar general criteria;
(3) Public improvements to buildings or lands owned by the state or local government that serve a
public purpose and do not principally benefit a single business or defined group of businesses at
the time the improvements are made;
(4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3;
(5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts, provided that
the assistance is equal to or less than 50% of the total cost;
(6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to
provide those services;
(7) Assistance for housing;
(8) Assistance for pollution control or abatement, including assistance for a tax increment financing
hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23;
(9) Assistance for energy conservation;
(10) Tax reductions resulting from conformity with federal tax law;
(11) Workers' compensation and unemployment compensation;
(12) Benefits derived from regulation;
(13) Indirect benefits derived from assistance to educational institutions;
(14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and
bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-6
(15) Assistance for a collaboration between a Minnesota higher education institution and a business;
(16) Assistance for a tax increment financing soils condition district as defined under M.S., Section
469.174, Subd. 19;
(17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more of the assessor's current year's estimated market value;
(18) General changes in tax increment financing law and other general tax law changes of a principally
technical nature;
(19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
(20) Funds from dock and wharf bonds issued by a seaway port authority;
(21) Business loans and loan guarantees of $150,000 or less;
(22) Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration; and
(23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to
valuation under Minnesota Rules, chapter 8100.
The EDA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions.
Subsection 2-13. County Road Costs
Pursuant to M.S., Section 469.175, Subd. ]a, the county board may require the EDA or City to pay for all or
part of the cost of county road improvements if the proposed development to be assisted by tax increment
will, in the judgment of the county, substantially increase the use of county roads requiring construction of
road improvements or other road costs and if the road improvements are not scheduled within the next five
years under a capital improvement plan or within five years under another county plan.
If the county elects to use increments to improve county roads, it must notify the EDA or City within forty-
five days of receipt of this TIF Plan. In the opinion of the EDA and City and consultants, the proposed
development outlined in this TIF Plan will have little or no impact upon county roads, therefore the TIF Plan
was not forwarded to the county 45 days prior to the public hearing. The EDA and City are aware that the
county could claim that tax increment should be used for county roads, even after the public hearing.
Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF
Plan would occur without the creation of the District. However, the EDA or City has determined that such
development or redevelopment would not occur "but for" tax increment financing and that, therefore, the
fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as
follows if the "but for" test was not met:
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-7
IMPACT ON TAX BASE
2017/Pay 2018 Estimated Captured
Total Net Tax Capacity (CTC) Percent of CTC
Tax Capacity Upon Completion to Entity Total
Washington County 311,176,974 25,750 0.0083%
City of Cottage Grove 31,648,068 25,750 0.0814%
ISD No. 833 105,111,241 25,750 0.0245%
Washington County
City of Cottage Grove
ISD No. 833
Other
Total
IMPACT ON TAX RATES
Pay 2018 Percent
Extension Rates of Total
0.299830
0.405830
0.333030
0.049930
1.088620
27.54%
37.28%
30.59%
4.59%
100.00%
CTC
25,750
25,750
25,750
25,750
Potential
Taxes
7,721
10,450
8,576
1,286
28,032
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the actual Pay 2018 rate. The total net capacity for the entities listed above are based
on actual Pay 2018 figures. The District will be certified under the actual Pay 2018 rates.
Pursuant to M.S. Section 469.175 Subd. 2(b):
(1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be
generated over the life of the District is $207,774;
(2) Probable impact of the District on city provided services and ability to issue debt. An impact of the
District on police protection is not expected. With any addition of new residents or businesses, police
calls for service may be increased. New developments may add an increase in traffic, and additional
overall demands to the call load. The City does not expect that the proposed development, in and of
itself, will necessitate new capital investment.
The probable impact ofthe District on fire protection is not expected to be significant. Typically new
buildings generate few calls, if any, and are of superior construction.
The impact of the District on public infrastructure is expected to be minimal. The development is
not expected to significantly impact any traffic movements in the area. The current infrastructure for
sanitary sewer, storm sewer and water will be able to handle the additional volume generated from
the proposed development. Based on the development plans, there are no additional costs associated
with street maintenance, sweeping, plowing, lighting and sidewalks. The development in the District
is expected to contribute to sanitary sewer (SAC) connection fees.
The probable impact of any District general obligation tax increment bonds on the ability to issue
debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-8
general obligation debt issued in relation to this project, therefore there will be no impact on the
City's ability to issue future debt or on the City's debt limit.
(3) Estimated amount of tax increment attributable to school district levies. It is estimated that the
amount of tax increments over the life of the District that would be attributable to school district
levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions
remained the same, is $63,558;
(4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of
tax increments over the life of the District that would be attributable to county levies, assuming the
county's share of the total local tax rate for all taxing jurisdictions remained the same, is $57,221;
(5) Additional information requested by the county or school district. The City is not aware of any
standard questions in a county or school district written policy regarding tax increment districts and
impact on county or school district services. The county or school district must request additional
information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax
increment financing plan.
No requests for additional information from the county or school district regarding the proposed
development for the District have been received.
Subsection 2-15. Supporting Documentation
Pursuant to M.S. Section 469.175, Subd. I (a), clause 7 the TIF Plan must contain identification and
description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd.
3, clause (b)(2) and the findings are required in the resolution approving the District. Following is a list of
reports and studies on file at the City that support the EDA and City's findings:
• A list of applicable studies will be listed here prior to the public hearing.
Subsection 2-16. Definition of Tax Increment Revenues
Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing
district include all of the following potential revenue sources:
Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S.,
Section 469.177;
The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was
purchased by the authority with tax increments;
Principal and interest received on loans or other advances made by the authority with tax increments;
Interest or other investment earnings on or from tax increments;
Repayments or return of tax increments made to the Authority under agreements for districts for
which the request for certification was made after August 1, 1993; and
The market value homestead credit paid to the Authority under M.S., Section 273.1384.
Subsection 2-17. Modifications to the District
In accordance with M.S., Section 469.175, Subd. 4, any:
1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-9
requirements of M.S., Section 469.175, Subd. 4(e);
Increase in amount of bonded indebtedness to be incurred;
A determination to capitalize interest on debt if that determination was not a part of the original TIF
Plan;
Increase in the portion of the captured net tax capacity to be retained by the EDA or City;
Increase in the estimate ofthe cost ofthe District, including administrative expenses, that will be paid
or financed with tax increment from the District; or
Designation of additional property to be acquired by the EDA or City,
shall be approved upon the notice and after the discussion, public hearing and findings required for approval
of the original TIF Plan.
Pursuant to M.S, Section 469.175 Subd. 4()9, the geographic area of the District may be reduced, but shall
not be enlarged after five years following the date of certification of the original net tax capacity by the
county auditor. If an economic development district is enlarged, the reasons and supporting facts for the
determination that the addition to the district meets the criteria of M.S., Section 469.174, Subd. 12 must be
documented in writing and retained. The requirements of this paragraph do not apply if (1) the only
modification is elimination of parcel(s) from the District and (2) (A) the current net tax capacity of the
parcel(s) eliminated from the District equals or exceeds the nettax capacity of those parcel(s) in the District's
original net tax capacity or (B) the EDA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the
original net tax capacity will be reduced by no more than the current net tax capacity of the parcel(s)
eliminated from the District.
The EDA or City must notify the County Auditor of any modification to the District. Modifications to the
District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF
Plan.
Subsection 2-18. Administrative Expenses
In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the
EDA or City, other than:
Amounts paid for the purchase of land;
Amounts paid to contractors or others providing materials and services, including architectural and
engineering services, directly connected with the physical development of the real property in the
District;
Relocation benefits paid to or services provided for persons residing or businesses located in the
District;
Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to M.S., Section 469.178; or
Amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clauses (1) to (3).
For districts for which the request for certification were made before August 1, 1979, or after June 30, 1982,
and before August 1, 2001, administrative expenses also include amounts paid for services provided by bond
counsel, fiscal consultants, and planning or economic development consultants. Pursuant to M.S., Section
469.176, Subd. 3, tax increment may be used to pay any authorized and documented administrative
expenses for the District up to but not to exceed 10 percent of the total estimated tax increment expenditures
authorized by the TIF Plan or the total tax increments, as defined by M.S., Section 469.174, Subd. 25, clause
(1), from the District, whichever is less.
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-10
For districts for which certification was requested after July 31, 2001, no tax increment maybe used to pay
any administrative expenses for District costs which exceed ten percent of total estimated tax increment
expenditures authorized by the TIF Plan or the total tax increments, as defined in M. S., Section 469.174, Subd.
25, clause (1), from the District, whichever is less.
Pursuant to MS, Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual
administrative expenses incurred in connection with the District and are not subject to the percentage limits
of M.S., Section 469.176, Subd. 3. The county may require payment of those expenses by February 15 of the
year following the year the expenses were incurred.
Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36
percent) of any increment distributed to the EDA or City and the County Treasurer shall pay the amount
deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be
appropriated to the State Auditor for the cost of financial reporting of tax increment financing information
and the cost of examining and auditing authorities' use of tax increment financing. This amount may be
adjusted annually by the Commissioner of Revenue.
Subsection 2-19. Limitation of Increment
The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District
may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow
account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or
redemption date.
Pursuant to M.S., Section 469.176, Subd. 6:
if, after four years from the date of certification of the original net tax capacity of the tax
incrementfinancing districtpursuant to M.S., Section 469.177, no demolition, rehabilitation
or renovation of property or other site preparation, including qualified improvement of a
street adjacent to a parcel but not installation of utility service including sewer or water
systems, has been commenced on a parcel located within a tax incrementfinancing district
by the authority or by the owner ofthe parcel in accordance with the tax incrementfinancing
plan, no additional tax increment may be taken from that parcel, and the original net tax
capacity of that parcel shall be excluded from the original net tax capacity of the tax
increment financing district. If the authority or the owner of the parcel subsequently
commences demolition, rehabilitation or renovation or other site preparation on thatparcel
including qualified improvement of a street adjacent to that parcel, in accordance with the
tax incrementfinancingplan, the authority shall certify to the county auditor that the activity
has commenced and the county auditor shall certify the net tax capacity thereof as most
recently certified by the commissioner of revenue and add it to the original net tax capacity
of the tax incrementfinancing district. The county auditor must enforce the provisions ofthis
subdivision. The authority must submit to the county auditor evidence that the required
activity has taken place for each parcel in the district. The evidence for a parcel must be
submitted by February I of the fifth year following the year in which the parcel was certified
as included in the district. For purposes of this subdivision, qualified improvements of a
street are limited to (1) construction or opening of a new street, (2) relocation of a street,
and (3) substantial reconstruction or rebuilding of an existing street.
The EDA or City or a property owner must improve parcels within the District by approximately May 2022
and report such actions to the County Auditor.
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-11
Subsection 2-20. Use of Tax Increment
The EDA or City hereby determines that it will use 100 percent of the captured net tax capacity of taxable
property located in the District for the following purposes:
To pay the principal of and interest on bonds issued to finance a project;
To finance, or otherwise pay the cost of redevelopment of the Development District No. 1 pursuant
to M.S., Sections 469.090 to 469.1082;
To pay for project costs as identified in the budget set forth in the TIF Plan;
To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4;
To pay principal and interest on any loans, advances or other payments made to or on behalf of the
EDA or City or for the benefit of Development District No. 1 by a developer;
To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing
the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to
MS, Chapter 4620 M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and
To accumulate or maintain a reserve securing the payment when due of the principal and interest on
the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152
through 469.165, and/or M.S., Sections 469.178.
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by M.S., Section 469.176, Subd. 4.
Tax increments generated in the District will be paid by Washington County to the EDA for the Tax
Increment Fund of said District. The EDA or City will pay to the developer(s) annually an amount not to
exceed an amount as specified in a developer's agreement to reimburse the costs of land acquisition, public
improvements, demolition and relocation, site preparation, and administration. Remaining increment funds
will be used for EDA or City administration (up to 10 percent) and for the costs of public improvement
activities outside the District.
Subsection 2-21. Excess Increments
Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the
following:
1. Prepay any outstanding bonds;
2. Discharge the pledge of tax increment for any outstanding bonds;
3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or
4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
The EDA or City must spend or return the excess increments under paragraph (c) within nine months after
the end of the year. In addition, the EDA or City may, subject to the limitations set forth herein, choose to
modify the TIF Plan in order to finance additional public costs in Development District No. 1 or the District.
Subsection 2-22. Requirements for Agreements with the Developer
The EDA or City will review any proposal for private development to determine its conformance with the
Development Program and with applicable municipal ordinances and codes. To facilitate this effort, the
following documents may be requested for review and approval: site plan, construction, mechanical, and
electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-12
other drawings or narrative deemed necessary by the EDA or City to demonstrate the conformance of the
development with City plans and ordinances. The EDA or City may also use the Agreements to address other
issues related to the development.
Pursuant to MS, Section 469.176, Subd. 5, no more than 10 percent, by acreage, of the property to be
acquired in the project area as set forth in the TIF Plan shall at any time be owned by the EDA or City as a
result of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax
increments from property acquired is pledged, unless prior to acquisition in excess of 10 percent of the
acreage, the EDA or City concluded an agreement for the development of the property acquired and which
provides recourse for the EDA or City should the development not be completed.
Subsection 2-23. Assessment Agreements
Pursuant to M.S., Section 469.177, Subd. 8, the EDA or City may enter into a written assessment agreement
in recordable form with the developer of property within the District which establishes a minimum market
value of the land and completed improvements for the duration of the District. The assessment agreement
shall be presented to the County Assessor who shall review the plans and specifications for the improvements
to be constructed, review the market value previously assigned to the land upon which the improvements are
to be constructed and, so long as the minimum market value contained in the assessment agreement appears,
in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the
minimum market value agreement.
Subsection 2-24. Administration of the District
Administration of the District will be handled by the City Administrator
Subsection 2-25. Annual Disclosure Requirements
Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the EDA or City must undertake financial reporting
for all tax increment financing districts to the Office ofthe State Auditor, County Board and County Auditor
on or before August 1 of each year. MS, Section 469.175, Subd. 5 also provides that an annual statement
shall be published in a newspaper of general circulation in the City on or before August 15.
If the City fails to make a disclosure or submit a report containing the information required by M.S., Section
469.175 Subd. 5 and Subd. 6, the Office of the State Auditor will direct the County Auditor to withhold the
distribution of tax increment from the District.
Subsection 2-26. Reasonable Expectations
As required by the TIF Act, in establishing the District, the determination has been made that the anticipated
development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and thatthe increased market value ofthe site that could reasonably be expected
to occur without the use of tax increment financing would be less than the increase in the market value
estimated to result from the proposed development after subtracting the present value of the projected tax
increments for the maximum duration ofthe District permitted by the TIF Plan. In making said determination,
reliance has been placed upon written representation made by the developer to such effects and upon EDA
and City staff awareness ofthe feasibility of developing the project site(s) within the District. A comparative
analysis of estimated market values both with and without establishment of the District and the use of tax
increments has been performed as described above. Such analysis is included with the cashflow in Appendix
D, and indicates that the increase in estimated market value of the proposed development (less the indicated
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-13
subtractions) exceeds the estimated market value of the site absent the establishment of the District and the
use of tax increments.
Subsection 2-27. Other Limitations on the Use of Tax Increment
1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF
Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the
Development District No. 1 pursuant to M.S., Sections 469.090 to 469.1082. Tax increments may not be
used to circumvent existing levy limit law. No tax increment may be used for the acquisition,
construction, renovation, operation, or maintenance of a building to be used primarily and regularly for
conducting the business of a municipality, county, school district, or any other local unit of government
or the state or federal government. This provision does not prohibit the use of revenues derived from tax
increments for the construction or renovation of a parking structure.
2. Pooling Limitations. At least 80 percent of tax increments from the District must be expended on
activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance
activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not
more than 20 percent of said tax increments may be expended, through a development fund or otherwise,
on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced
bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they
were solely for activities outside of the District.
Five Year Limitation on Commitment of Tax Increments. Revenues derived from tax increments paid
by properties in the District shall be deemed to have satisfied the 80 percent test set forth in paragraph
(2) above only if the five year rule set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and
beginning with the sixth year following certification ofthe District, 80 percent of said tax increments that
remain after expenditures permitted under said five year rule must be used only to pay previously
committed expenditures or credit enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd.
5.
Subsection 2-28. Summary
The Cottage Grove Economic Development Authority is establishing the Districtto preserve and enhance the
tax base, and provide employment opportunities in the City. The TIF Plan for the District was prepared by
Ehlers &Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105, telephone (651) 697-
8500.
Cottage Grove Economic Development Authority
Tax Increment Financing Plan for Tax Increment Financing District No. 1-18 (Modern Automotive) 2-14
Appendix A
Project Description
The District is being created to facilitate an approximately 24,000 square foot expansion to the existing
approximately 23,000 square foot facility at 9800 Hemingway Ave S in the City. The purpose of the
expansion is to provide additional warehousing/manufacturing space to produce and distribute automotive
parts.
The City expects to complete an administrative lot combination to join all of 9800 Hemingway Ave S (PID
200272143 0005) with approximately 21,000 square feet of land that is currently part of 9700 Hemingway
Ave S (PID 2002721430008). The lot combination produces a larger lot size to accommodate the building
expansion.
Appendix A-1
Appendix B
Map of Development District No. 1 and the District
Appendix B-1
70th Street
re
97th St.
i
�a
0
0 1 2 3 4 Mil
Tax Increment Financing No. 1-18
Development District No. 1
City of Cottage Grove
Washington County, MN
Cottage
Grove rove
here Pride ana? p5perity Meet
Appendix C
Description of Property to be Included in the District
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcel listed below.
Parcel Numbers
Address
Owner
20.027.21.43.0005*
9800 Hemingway Ave S
9800 Hemingway LLC
*The City expects to complete an administrative lot combination to join all of 9800 Hemingway Ave S (PID
20.027.21.43.0005) with approximately 21,000 square feet of land that is currently part of 9700 Hemingway
Ave S (PID 20.027.21.43.0008). The property to be included in the District will be replatted and a new parcel
number assigned prior to certification of the District.
Appendix C-1
Appendix D
Estimated Cash Flow for the District
Appendix D-1
4/11/2018
EHLERS
LEADERS IN PUBLIC FINAMCr
Modern Automotive
City of Cottage Grove
24,080 SF New and 23,125 SF Existing OfficeMlarehouse
Base Value Assumptions - Page 1
DistrictType: Economic Development
Tax Rates
Total
District Name/Number:
Tax Year
Property
current
County District #:
Atter
Exempt Class Rate (Exempt)
0.00
First Year Construction or Inflation on Value
2018
Original
Commercial Industrial Preferred Class Rate (C/I Pref.)
Tax
Existing District - Specify No. Years Remaining
After
Conversion Area/
First $150,000
1.50%
Inflation Rate - Every Year:
3.00%
for District
Over $150,000
2.00
Interest Rate:
4.00%
Conversion
Commercial Industrial Class Rate (C/1)
2.00%
Present Value Date:
1 -Feb -19
1,149,600
Rental Housing Class Rate (Rental)
1.25
First Period Ending
1 -Aug -19
22,242
Affordable Rental Housing Class Rate (Aff. Rental)
22,242 1
Tax Year District was Certified:
Pay 2018
0
First $121,000
0.75
Cashflow Assumes First Tax Increment For Development:
2020
Non-Homesteac
Over $121,000
0.25
Years of Tax Increment
9
Non -Homestead Residential (Non -H Res. 1 Unit)
Assumes Last Year of Tax Increment
2028
First $500,000
1.00
Fiscal Disparities Election [Outside (A), Inside (B), or NA]
Inside(B)
Note:
Over $500,000
1.25
Incremental or Total Fiscal Disparities
Incremental
Homestead Residential Class Rate (Hmstd. Res.)
Fiscal Disparities Contribution Ratio
33.5669%
Pay 2018
First $500,000
1.00%
Fiscal Disparities Metro -Wide Tax Rate
145.0950%
Pay 2018
Over $500,000
1.25
Maximum/Frozen Local Tax Rate:
108.862%
Pay 2018
Agricultural Non -Homestead
1.00
Current Local Tax Rate. (Use lesser of Current or Max.)
108.862%
Pay 2018
State-wide Tax Rate (Comm./Ind. only used for total taxes)
43.8650%
Pay 2018
Market Value Tax Rate (Used for total taxes)
0.37418%
Pay 2018
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Cottage Grove\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 1-18 2018 (Modern Automotive)\TIF Plan Run 4-11-18 (final)
13UIItling
Total
Percentage
Tax Year
Property
current
class
Atter
Land
Market
Market
Of Value Used
Original
Original
Tax
Original
After
Conversion Area/
Map ID PID Owner Address
Market Value
Value
Value
for District
Market Value
Market Value
Class
Tax Capacity
Conversion
Ong. Tax Cap. Phase
1 2002721430005 )0 Hemingway LB00 HemingwayA\
404,800
744,800
1,149,600
100%
1,149,600
Pay 2018
C/I Pref.
22,242
C/I Pref.
22,242 1
2 2002721430008 \f Cottage Grove700 Hemingway Ae
263,300
0
263,300
14%
36,343
Pay 20184g
Non-Homesteac
363
C/I
727
1,185,943
22,605
22,969
Note:
1. Base values are for Pay 2018 per Washington County website on
11-27-17.
2. Urban District: SD #833 & WD #14
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Cottage Grove\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 1-18 2018 (Modern Automotive)\TIF Plan Run 4-11-18 (final)
4/11/2018
EHLERS
l€hp€RS �K PRl96@C FIRhaGE
Modern Automotive
City of Cottage Grove
24,080 SF New and 23,125 SF Existing Office/Warehouse
Base Value Assumptions - Page 2
Note:
1. Market value for new building based on discussion with Washington County assessor on 9-21-17.
Note:
1. Taxes and tax increment will vary significantly from year to year depending upon values, rates, state law, fiscal disparities and other factors
which cannot be predicted.
2. If tax increment in received in 2018, then the district will be one year shorter.
WHAT IS EXCLUDED FROM - • ANALYSIS
-
o rope axes ==`K=a ue - rbl..
less State-wide Taxes (21,375) New Market Value - Est. 2,474,000
less Fiscal Disp. Adj. (23,733) Difference
less Market Value Taxes (9,257) Present Value of Tax Increment
less Base Value Taxes (16,611) Difference 1,123,349
Annual Gross TIF Value likely to occur without Tax Increment is less than:
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Cottage Grove\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 1-18 2018 (Modern Automotive)\TIF Plan Run 4-11-18 (final)
TAX CALCULATIONS
o a
tsca
oca
oca
tsca
a e -wine
imar e
Tax
Disparities
Tax
Property
Disparities
Property
Value
Total
Taxes Per
New Use
Capacity
Tax Capacity
Capacity
Taxes
Taxes
Taxes
Taxes
Taxes
Sq. Ft./Unit
Existing Bldg
22,242
7,466
14,776
16,086
10,833
9,756
4,302
40,976
1.84
New Warehouse
26,488
8,891
17,597
19,156
12,901
11,619
4,956
48,632
2.02
Note:
1. Taxes and tax increment will vary significantly from year to year depending upon values, rates, state law, fiscal disparities and other factors
which cannot be predicted.
2. If tax increment in received in 2018, then the district will be one year shorter.
WHAT IS EXCLUDED FROM - • ANALYSIS
-
o rope axes ==`K=a ue - rbl..
less State-wide Taxes (21,375) New Market Value - Est. 2,474,000
less Fiscal Disp. Adj. (23,733) Difference
less Market Value Taxes (9,257) Present Value of Tax Increment
less Base Value Taxes (16,611) Difference 1,123,349
Annual Gross TIF Value likely to occur without Tax Increment is less than:
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Cottage Grove\Housing - Economic - Redevelopment\TIF\TIF Districts\TIF 1-18 2018 (Modern Automotive)\TIF Plan Run 4-11-18 (final)
4/11/2018
EHLERS
LEADER SIN PURL10 FIN ANU
Modern Automotive
City of Cottage Grove
24,080 SF New and 23,125 SF Existing OfficeMarehouse
Tax Increment Cashflow - Page 3
% of
OTC
Project
Tax
Capacity
Original
Tax
Capacity
Fiscal
Disparities
Incremental
Captured
Tax
Capacity
Local
Tax
Rate
Annual
Gross Tax
Increment I
Semi -Annual
Gross Tax
Increment
State
Auditor
0.36%
Admin.
at
10%
Semi -Annual
Net Tax
Increment
Semi -Annual
Present
Value
PERIOD
ENDING
Yrs.
Tax
Year
Payment
Date
08/01'19
-
-
-
-
02/01/20
100%
48,730
(22,969)
(8,647)
17,114
108.862%
18,631
9,315
(34)
(928)
8,354
7,872
0.5
2020
08/01/20
9,315
(34)
(928)
8,354
15,589
1
2020
02/01/21
100%
50,192
(22,969)
(9,138)
18,085
108.862%
19,688
9,844
(35)
(981)
8,828
23,585
1.5
2021
08/01/21
9,844
(35)
(981)
8,828
31,423
2
2021
02/01/22
100%
51,698
(22,969)
(9,643)
19,085
108.862%
20,777
10,388
(37)
(1,035)
9,316
39,534
2.5
2022
08/01/22
10,388
(37)
(1,035)
9,316
47,485
3
2022
02/01/23
100%
53,249
(22,969)
(10,164)
20,116
108.862%
21,899
10,949
(39)
(1,091)
9,819
55,701
3.5
2023
08/01/23
10,949
(39)
(1,091)
9,819
63,755
4
2023
02/01/24
100%
54,846
(22,969)
(10,700)
21,177
108.862%
23,054
11,527
(41)
(1,149)
10,337
72,069
4.5
2024
08/01/24
11,527
(41)
(1,149)
10,337
80,220
5
2024
02/01/25
100%
56,491
(22,969)
(11,252)
22,270
108.862%
24,244
12,122
(44)
(1,208)
10,870
88,623
5.5
2025
08/01/25
12,122
(44)
(1,208)
10,870
96,861
6
2025
02/01/26
100%
58,186
(22,969)
(11,821)
23,396
108.862%
25,469
12,735
(46)
(1,269)
11,420
105,346
6.5
2026
08/01/26
12,735
(46)
(1,269)
11,420
113,665
7
2026
02/01/27
100%
59,932
(22,969)
(12,407)
24,556
108.862%
26,732
13,366
(48)
(1,332)
11,986
122,225
7.5
2027
08/01/27
13,366
(48)
(1,332)
11,986
130,617
8
2027
02/01/28
100%
61,730
(22,969)
(13,011)
25,750
108.862%
28,032
14,016
(50)
(1,397)
12,569
139,245
8.5
2028
08/01/28
14,016
(50)
(1,397)
12,569
147,704
9
2028
02/01/29
Total
208,525
(751)
(20,777)
186,997
Present Value From 02/01/2019
Present Value Rate
4.00%
164,708
(593)
(16,412)
147,704
Prepared by Ehlers & Associates, Inc. - Estimates Only N:\Minnsota\Cottage Grove\Housing -Economic - Redevelopment\TIF\TIF Districts\TIF 1-18 2018 (Modern Automotive)\TIF Plan Run 4-11-18 (final)
Appendix E
Minnesota Business Assistance Form
(Minnesota Department of Employment and Economic Development)
A Minnesota Business Assistance Form (MBAF) should be used to report and/or update each calendar year's
activity by April 1 of the following year.
Please see the Minnesota Department of Employment and Economic Development (DEED) website at
http://www.deed.state.mn.us/Community/subsidies/MBAFFonn.htm for information and forms.
Appendix E-1
Appendix F
Findings Including But/For Qualifications
To be added prior to the public hearing
But -For Analysis
Current Market Value 1,185,943
New Market Value - Estimate 2,474,000
Difference 1,288,057
Present Value of Tax Increment 164,708
Difference 1,123,349
Value Likely to Occur Without TIF is Less Than: 1,123,349
Appendix F-1