A-4. Key Financial Strategy: Business Subsidy EducationMEMORANDUM
CITY OF CHANHASSEN
Chanhassen is Community for Life -Providing for Today and Planning for Tomorrow
TO: Mayor and City Council
FROM: Greg Sticha, Finance Director
DATE: October 24, 2016
A -q
SUBJ: Business Subsidy Informative Discussion & Proposed Business Subsidy Practice
Document
BACKGROUND
One of the KFS goals for 2016 was to have an informative discussion with the City Council on
Business Subsidy Practices and the use of such tools like Tax Increment Financing (TIF). Nick
Anhut from Ehlers & Associates, the city's financial advisors, will be here this evening to
provide direction and answer questions about this topic with the council.
The first part of the presentation will be an informative walk though of the various types of
business subsidies that local governments can and typically use, in particular TIF. During that
informative discussion Nick, along with staff, will review a case study of a potential
development and how Tax Increment may be used as part of creating incentive for the project.
The last part of the discussion will be a quick review of the city's past Business Practice
Document. Staff will be looking for feedback and thoughts from council about how active the
city council wants to proceed in using business subsidies and its desire to proceed with approval
of such a document at a future council meeting. Previous city councils have used business
subsidies in very limited situations (see attachment).
ATTACHMENTS
1. Power Point Presentation.
2. Proposed Business Practice Document.
E\gregs\counci1\2016\business subsidy practice 10-24-16.doex
PH 952.227.1100 • www.ci.chanhassen.mn.us • FX 952.227.1110
7700 MARKET BOULEVARD • PO BOX 147 • CHANHASSEN • MINNESOTA 55317
CAW
U
Z
z
WJ
m
JCL
Z
V)
W
Wa
W
J
0
L
U
U
co
L.
n
m
U)
c
.U)
co
H
W
U)
Jc
c
Ali
U)
a�
M
�U
U)
U)
06
L
w
U
ISI
CyCi`
W
im
J�d
,=
aW=
C
N
O
cn
c
cn
c
cr
O
ry
CID
N
70
Q
N
C
�
c
O
o
O
U
00
W
O
LL
LL
F—
O
E
m
NJ
O
cm
EY
H
j
w
�N
t
L-
0 0
m
a -J
U
i
a-1
N
0
U
L-
0 0
E
0
J.
Ln
Uri
O O O O O O O O
iD W O N V iD 00 O
un 7 4 rvi N ri O O
-d`
I
c
O
4�
O
C
N
(o
C
to
i U)
O X
co
4-1�
-�n
> cu
U
c
m O
O �O
N
(
L
Q O
CL
`v
w
w`
U_
\ML/
W
X
`v
>
m
CL
C
O
•
I ,
I
c
O
4�
O
C
N
(o
C
to
i U)
O X
co
4-1�
-�n
> cu
U
c
m O
O �O
N
(
L
Q O
CL
`v
w
w`
CL
O
`.0
11
mo
rL
o
Lo
N
V
N
r
�
m
�
r
L
o
=
o
N
O
N
O
LO
o
O
L
L
N
�
_
�
O
E
L
�
O
L
O>
�_
O
0
c
Q
O
O
c
�N
O
rL
•�
V
Lr)
L
a�
c
O
-
c
2
'a
E
Q
Q
N
.
C
O
m
U
.
NI=
�
�
>1
7t
�
�
O
L.
A
V)
ce
W
�
Z
W
*
g
o
mD
e
��
/a
E
k§
Ĥ
(n3
03
a) -0
0-0°
)
�k
/ $
k $
.
m 0
E
/ 5
\ c
%\
em
E2
§
am
fm
/§
m /
3
§�
o_g
0-r-
40-
kk
)ma
0cm
0/
%/
7M -
[k$
��
cno
=ems\��
��
/
§ke�
�
��
��e�
��
��a°am
E®ma
2
\
�
kM-0ƒ
:
o
�
co ƒ \
M
S
�
F-%fO
> U)
0.3Gut
L
/f/
E�fk
m§k�
0-70-
E._2
CL M0
X§
Off)-
>/§2\
��.0
3
AW
0
ƒ\�
tE�
-f5
�2�
LD
@
E.§�
\y/
kh
�®
$
U 3af
U
0
�
/2>
�
/3kƒ
=)
�
co
-
-
-
V)
ce
W
�
Z
W
Q
U)
4-0
E
U
A
n
50,
�i
m
C
a)
N
�4-1O
U) :0Q
U O
-0 co cu
m
� U U
C � f-
N�I�
OCz
W
m
Jn
N
W
uj
0
r
O
U
M
cm
O
�
O
4=
Q
i
M
LL
O
X
U)
C9
W
J
W
H
O
U
w
A
V
m
m
m
U
x
F
m
c
�L
AU
x
x
FM
O
LL
-J
M
�r.
O
A
V
m
m
m
U
x
F
m
c
�L
AU
m
co 0
N
N N
N X N
X a F R
FR -Q NHLL
7 N
o
U) LL �y m lu
$ $ y y 2c
22224
Cc
L
Q �>
EL.2
E
V
(D
y
— N
e
v
m
M
m
u
x
9
m
c
•L
O
A+
/7
E`
D.C.i
O
^0
CL
A/
W
�
O
0
Qi
AL+
W
N
A+
N
O
.O
•O
U
�
N
m
�
m
co 0
N
N N
N X N
X a F R
FR -Q NHLL
7 N
o
U) LL �y m lu
$ $ y y 2c
22224
Cc
L
Q �>
EL.2
E
V
(D
y
— N
e
v
m
M
m
u
x
9
m
c
•L
O
c6
O
L.
Q
Q
U
U)
0
LL
1—
L
O
a
ry
�Q
Uw
U)
Ca
EL
L-
n
E
Q)
Q) CL
X
Q)
o-0
m
L)
4--
0 O
N
U
CU C:
O m
Co
(2)
O _U
Q
Q Q
>
M
U) O
240—
L 11
U)
0)
'U C 0
O ® ® Q
U) _
co
LZU) w a)
C O Q .0 >
U-
X
0 v
a� -0 E
O -0 c C6 0
2 W
ry Q
0 0
= Ip
Lu
yla
W Im
a
ul
a�
4-0
0 U)
O
0
c� E 0 0
0 (n v
�_' 0 a)
}, =
U ~ _0= O }, in
.c O O '� O
(n O)p O
i i M m +- _O
O N �N A� `'-N
'� O O >
> X U.0 �� C6 0 0
0 �U �
yip
OC LL
W!J
�
m
0
W
4-1
C
uj N
C
E
cn
O
U
O
O
N
O
>
N
4--, 0
C:Q
=
U
O
E�
4
-1-'O
U �
L'
4-j
U)
E
>
O
:
0
co
O
O
OO
L
E
L
O_
U
�C
_0
o
N
N .O
N
\
/
O
^'
•in L
U
4-1
�
�L/�
y/W
4-0i
N U C
C
N
(D
W
E
-
�Xu
0-a
E
'Ar'
L
N•C
U
O
co
E
O �O
> 0
o
O
O
N0
O
X
L
c
o
> O
O C
o
N
M
d*)
N
•
.
•
F�
0
0)
C:
7
c
O
0
U)
c
E
0
0)
cli
0 0 0 0
N
U
m
Q
U
'L
O
�
N
®
O
o
N
00
U
j
x
�
O
O
W
Q
0)
C:
7
c
O
0
U)
c
E
0
0)
cli
0 0 0 0
4-0
0
0)
O
2
4-0
.- E
CL
E � U O
4-1
o O —
.C/)
co
4-0
O m
4-0O
O o ,�
CD O 4.
�
O O
C4 U O
O L
N0 N N
75 X +-
I O .O a� Co O
O C: N
O O U
Q cr lr� .�
•
•
4-
0
N
E
•
s
L
O
O
c
d'
co
1
r
E
O
.C:
N
E
4-
0
Mol
O
UD
ca
O
LO
N
I
U)
L
CL
E
O
U
co
E
O
U
Ln
91
7
9
no
U
L.
U)
r)
.C/)
O
X
O
E
O
0
M
r
MIJ
O
O
E
O
O
.L
iz
0
0
t■
o
O O
O
O >
+_ O
Q -U)
�- o
Q U
O
•=3
-0
4-0U) O Q
I I I
c
_co
0.
H
N
N
C`•
Q)
U
�
Q
N
m
�
�
O
4.4
U
�-
a)
.O
LL
E
U
�
�
O
t■
o
O O
O
O >
+_ O
Q -U)
�- o
Q U
O
•=3
-0
4-0U) O Q
I I I
O
LL
E
W m
Q
= i�
0
La
_O
N
a)
0
O
z
C"I •
_r_
_0
O
U
'U
O
U)
N
c
U
U'gin
m
(L)0
�
'�
�
o
o
cr
®
�
�
UQ
E
o
c
._
UJ
0
(n
D
W
m
m
0
0
E
Q
U
O
O
Ca
4-0
a)
E
0
Q
4-0c
O
V
0
r-,
O
4-0
U
r
E
O
cn
N
X
Co
0 Q
0-0
O
to mo
4-0
�/
O
E
1
•
U. • •
0
-4-a
cn
O
U
1�
E
m
E
U)
O
N
_ l -
SILLz
U
0
O J'
�Z
WIW
4-j (n
4-0 Co
Q X
Co 4-0cn � Co � ~_
Co
�
E C: m
:3O -0 o Z
(a -t U 0 U)L �
C: XQ U U
Qi 0 _O O
E N Ccn
-�+ E m 40-1 _
CU C O
.i Q N 0 U
O O U +_+
N O N O O m O_
+-' _ cm cn N -0 -0 > 'O -0
U C
}, 0. U.
Q
ll
4-1
lo-�,
0
W
W
c
E
0-
0
U
O
C
O
U
W
c
co
O
N
E
O
E
W
O
C
E
0
N
U
L
U)
C
I
LL
LL
L
(�
^,
rrLnn
V
J
�}.i
O
ll
4-1
lo-�,
0
W
W
c
E
0-
0
U
O
C
O
U
W
c
co
O
N
E
O
E
W
O
C
E
0
N
C
I
LL
N
Q
>
Q
�
Q
U
p
Eo
d
J
O
0
W
O
V
W
I
I
I
a)
L
0
E
.
E
O
co
U
�
w
U (6
Z
Q U)
�-0
cn O
O•-'-%
U
�O O
U -0
-1--+
C: X
Q� co
E
Q
>cn
U
O �
cu
O
Z .�
[]
U)
Q
Mi
Li
L
LL
.U)
U)
O
Q
—
a)
E
C:
O
D
0
ry
U
cn O
O :u_>
L >
N OL
Q 0-
0
O
Y
> U
N
-0 m U
-�e C:
O
Q
J E
o O
O
4-1
=3
U OU
N
co
C:
cn -0 N
N
O co E
O) -�zO
0 � C
>+ Q
m a�
>
CU 0
yw<
Z
OC_
W=
m
Jn
z
0
W w
ip
0
W
-6�-+
0
C
E
>
>
L.
(� •
0-
LH-
O
O
O°'
Q
+r
0)
a
�
N
C
co
N
-1
O
Q
Q
U
U
E
NQS
N
O
N
o
=3U
U-
�
m
>
Q
0
O
U
cn O
O :u_>
L >
N OL
Q 0-
0
O
Y
> U
N
-0 m U
-�e C:
O
Q
J E
o O
O
4-1
=3
U OU
N
co
C:
cn -0 N
N
O co E
O) -�zO
0 � C
>+ Q
m a�
>
CU 0
yw<
Z
OC_
W=
m
Jn
z
0
W w
ip
U
a"'
Q�
E
Q
_O
W
O
ry
v/
LL
-C
co
U
N
�
�
o
ca
0
O
�
0
U
U
oc l Z
W
..I�i
y
rc
0
W
v
0
0
N
I
rn
ti
rn
0
0
U
C J O
N v 4--
C ^
C ^
0 coO O
O M>l
N
> N a C 0 E (O a3)
O d 0 N C O
O 0 ^ 0 a`) I p O N N
4-03 ��� _0 04 N O I O
i O (n
w
o f6 N -00c 4 M T) CD Cy)
O
CtiU O I O C: L C 0 m�
U � O �
O cU I M (flcy) CLN N I N j�a
M Y 6 L VJ W /1\ 1,O .� y jrCD W� !1\ CO U^)l ( •U
LL li CO ZZ a) 3:
in P: CLLLL � �+LL �H CU- s - U) �m•
OO.�HH O m 0o Of- C U O >+
a) c )oo � mo C:)-0Q^), I— 3 5 m m
W � L
F� E L ccovp 'to0.�� cvo0 �L (0 a 2
U 0 w��0 Zai ��M U_ "O U 0 Q O
^ .- - 0) LO eo 0 W cM (.0 O
U) 4-j LL LL LL U- U- LL E LL LL LL
I— H C H H C 0
Jc:Q O OV .
C: LL = W
U
Chanhassen TIF History
26
Summerwood of Chanhassen (Village on the Ponds)
27
Number of Units:161
Affordable Units:35
TIF :$1,060,000
Duration of District:2001-2013
Gateway Place (Sand Companies)
28
Number of Units:48
Affordable Units:48
TIF :$300,000
Duration of District:2006-2016
North Bay (Rottlund Homes)
29
Number of Units:76
Affordable Units:35
TIF :$300,000
Duration of District:1996-2016
w
U
Z
a
Z_
w
Wm
JCL=
z
Scn
�w
W �Q
LU
J
M
C
O
U
U
C
O
i
00
L
_
Q
L
�
Q
U
D
v
c
Z
W
M
CITY OF CHANHASSEN
BUSINESS SUBSIDY PRACTICE
Approved November , 2016
CITY OF CHANHASSEN
BUSINESS SUBSIDY PRACTICE
GENERAL POLICY
The City Council of the City of Chanhassen has the power, should it deem necessary, to grant
business subsidies. The fundamental purpose of Business Subsidy Policy in Chanhassen is to
encourage desirable and affordable housing or economic redevelopment that would not
otherwise occur "but for" the assistance provided by the City of Chanhassen. This Business
Subsidy Policy shall be used as a guide in processing and reviewing applications requesting a
business subsidy.
PROJECT SELECTION CRITERIA
Business Subsidies can benefit the community by providing a broad range of affordable housing
opportunities or significant economic redevelopment of a blighted area. The Council reserves the
right to approve or reject business subsidies on an individual basis.
Highest Priority Shall Be Given to Proiects Which Include:
1. Compatibility of the proposed project with the City's overall development plans and
objectives.
2. Broad range of housing opportunities such as affordable housing.
3. Minimal impact on City service needs.
4. High quality of the facility to be built.
5. Increase in Tax Base: While an increase in the tax base cannot be the sole grounds for
granting a subsidy, the EDA believes it is a necessary condition for any subsidy.
6. Economic Development: Projects should promote one or more of the following:
• Encourage economic and commercial diversity within the community;
• Provide basic goods and services, increase the range of goods and services available, or
encourage fast-growing businesses;
• Promote redevelopment objectives and removal of blight, including pollution cleanup;
• Promote additional or spin-off development within the community;
• Encourage full utilization of existing or planned infrastructure improvements.
2
PROJECT REQUIREMENTS
1. Applicant at all times should retain and be assisted by qualified financial consultants and/or
underwriters, and legal counsel.
2. Construction of the project shall not be commenced until the City has given preliminary
approval to the application for financing.
3. The City reserves the right to deny any application for financing at any stage of the
proceedings prior to adoption of the final approval authorizing issuance of the bonds.
4. The City reserves the right to select a third party administrator to assist in the management of
the process.
5. Development must be of the highest quality with high quality building materials and
landscaping as agreed between the City and the Developer.
6. Developer must pay all costs of establishing the district unless the City agrees to allow costs
to come out of the district.
7. Local requirements may be more stringent than State statute as applies to TIF.
8. Project meets "but for" analysis and statutory qualifications (Exhibit A).
9. All projects must be consistent with Chanhassen's Comprehensive Plan and any other similar
plan or guide for development of the community.
ACTIVITIES TO BE CONSIDERED FOR FINANCING
1. Any subsidy granted by the city must be approved by the Chanhassen City Council/EDA.
2. It will be necessary for both the grantee and the EDA (City of Chanhassen) to comply with
the reporting and monitoring requirements of the Act.
3. Land write down
4. Costs of streets and utilities
5. Demolition and relocation costs
6. City costs such as trunk utility costs, street costs, and MSA reimbursement
7. Extraordinary site considerations including structured parking
8. Soil corrections
APPLICATION PROCESS
1. The application process must be completed in accordance with TIF application procedures
(Exhibit B).
2. Applicant shall make an application for TIF usage on forms available from the City.
3. The application will include (if appropriate):
a. Statement of Public Purposes
b. Description of Project
c. Plans and Drawings of Project
d. Description of Company
e. Legal Opinions
f. Investment Bank Letter of Feasibility
g. Market Analysis
h. Pro Forma Analysis
i. Financial Statements
j. Zoning and Planning Analysis
k. Application Fee
1. Demonstration of past successful general development capability as well as specific
capability in the type and size of development proposed.
in. Any housing application should include a full unit mix, complete with proposed rents and
square footage/bedrooms for each unit type.
n. Other Documentation Requested by the City
4. The City's Business Subsidy program will be administered by the City of Chanhassen's
Economic Development Authority (EDA). The applicant shall submit a completed
application and a $4,000 non-refundable application fee. The application fee shall be paid to
the City of Chanhassen at the time a final Business Subsidy application is submitted.
At the time a final Business Subsidy application is submitted, the applicant shall also deliver
to the City a deposit in the amount of $12,000. The purpose of this deposit is to reimburse
the City for costs and expenses incurred in connection with preparation of the development
agreement and the carrying out of all actions necessary in the fulfillment of the City's
obligations. Any part of the deposit not needed for those purposes shall be promptly
returned to the Redeveloper not later than the date of issuance of the Certificate of
Completion, or within 15 days following the termination of the Development Agreement for
failure to close. It is understood the deposit is not a limitation on the Redeveloper's
obligation to reimburse the City for such costs; and the Redeveloper shall pay the City for
any such costs in excess of the deposit within 30 days following a written request to do so.
5. City staff will review the data and make preliminary recommendations to the City Council
as to compliance of the application and proposed project with City objectives and
criteria/Strategic Plan.
6. Formal evaluation of the application will include, in addition to items subject to preliminary
review, review of applicable credit analysis, credit enhancement and legal compliance.
Formal recommendation will then be made to the City Council.
7. After evaluation of the formal recommendation, the City Council will consider final
approval of the establishment of the Business Subsidy and hold the appropriate hearings.
8. All applications and supporting materials and documents shall become the property of the
City.
CITY OF CHANHASSEN
APPLICATION FOR BUSINESS SUBSIDY
Applicant Information
1. Applicant Name:
(Name should be the officially registered name of the business entity.)
Telephone:
2. Name of Person Completing the application:
Address:
Telephone:
Email Address:
Email
3. Names and Addresses of Attorney, Architect, Engineer, and General Contractor for this
project:
Attorney Name:
Address:
Telephone:
Architect Name:
Address:
Telephone:
Email Address:
Email Address:
Engineer Name.•
Address:
Telephone: Email Address:
General Contractor Name:
Address:
Telephone: Email Address:
4. If the applicant is a corporation, please name officers, directors, or stockholders holding more that
5% of the stock of the corporation. If the corporation is not formed, provide as much information
as possible concerning potential officers, directors, or stockholders:
4a. If the applicant is a general partnership, name of the general partners and if a limited partnership,
state the general partners and limited partners with more than 5% interest in the limited partnership.
If the partnership is not formed, provide as much information as possible concerning potential
officers, directors or stockholders.
0
4b. Has the applicant ever been in bankruptcy? If yes, please describe the circumstances.
Yes (please Explain):
No:
4c. Has the applicant ever been convicted of a felony? Is yes, please describe the circumstances.
Yes (please Explain):
No:
4d. Has the applicant ever defaulted on any bond or mortgage commitment?
Yes (please Explain):
Ime
Project Information
1. PID#'s, legal description, address, and size of project site:
PID#:
Address:
Legal Description:
Size of Project Size (Acres):
2. Current ownership of the site:
3. Do you have current control of the site:
Yes:
1\0
4. Project description.
5. If property is to be subdivided or replatted, please describe.
6. Estimated project costs: (Please enclose detailed sources and uses and 15 -year operating Pro
Forma).
a.
b.
C.
d.
e.
f.
9.
h.
i.
j
k.
1.
M.
n.
10
w
Land Acquisition:
Environmental/Soil Corrections:
Surveys:
Public Improvements: _
Site Development:
Demolition:
Building(s):
Shell (if applicable)
Tenant Improvements
(if applicable)
FF&E:
Architectural & Engineering Fees:
Legal Fees/Other Consulting Fees:
Financing Costs:
Construction Interest:
Title Insurance:
Mortgage Registration:
Bank/ Borrower Legal:
Recording/Closing:
Construction Loan Fees:
SAC/ WAC:
Park Dedication:
Appraisal:
Taxes:
Contingencies (construction):
Contingencies (soft):
0
X. Other:
TOTAL
7. Source of Financing
a. Equity:
b. Bank Financing:
c. City Assistance:
(TIF or Tax Abatement) _
d. Other governmental loans/grants:
e. Deferred Developer Fees:
f. Other:
TOTAL $
Terms of Financing (years):
Rate of Financing:
Cap Rate:
8. Project Construction Schedule:
a. Construction Start Date:
b. Construction Completion Date:
c. If Phased Project:
January 2, (year) % Completed
January 2, (year) % Completed
9. Total Estimated Market Value of Project upon completion $
10. What is the proposed construction timeline (Please include attached detail if needed)?
11. How many full-time equivalent jobs will be created as a result of the project
12. Please list the number of jobs projected to be created in each salary range (do not include benefits
in salary calculations):
$14,500 to $2o,800 per year
$2o,8oi to $32,200 per year
$32,202 to $41,600 per year
E
Over $41,600 per year
13. Will any public official of the City, either directly or indirectly, benefit from the issuance of public
assistance within the meaning of Minnesota Statutes, Section 412.311 or 471.87? If yes, please
explain the circumstances.
Yes (please Explain):
No:
14. List in detail any partnership interests this proposed project would include as well as ownership
information of the final constructed building.
15.
Public Assistance Request
1. Amount of assistance and term.
Amount:
Term (years):
2. Describe the purpose for which Public Assistance (TIF or Tax Abatement) is required.
3. Please submit an itemized list of project costs for which TIF assistance is being requested.
4. State specific reasons why, "but for' the use of public assistance, this project would not be possible.
10
1. The following documents must accompany the Application:
A. A detailed sources & uses statement and 15 -year project Pro Forma
B. Parcel Map depicting the proposed redevelopment area
C. Site plans and floors plans (as available)
D. Significant additional information may be requested at any time by the City./EDA and
may be in addition to the materials outlined in this application. The Applicant shall be
required to submit any and all information as requested by the City/EDA.
2. Applicant acknowledges and agrees to pay a $4,000 Application Fee and is non-refundable (Payable
to the City).
3. At the time of acceptance by staff of the Public Financing Application, the applicant shall deposit
$12,000 with the City/EDA to cover attorney and consultant costs incurred as part of establishing a TIF
district or abatement, drafting and negotiating a development agreement, and conducting any fiscal
analysis that may be required to meet the requirements of utilizing any public financing. If additional
expenses are incurred beyond the $12,000, prior to the execution of a development agreement, the
City/ EDA shall notify the applicant in writing and the applicant will be required to deposit additional
funds upon notice.
4. The Applicant shall hold the City/ EDA, its officers, consultants, attorneys, and agents harmless from
any and all claims arising from or in connection with the Project or Public Assistance Application,
including but not limited to, any legal or actual violations of any State or Federal securities laws.
5. The Applicant recognizes and agrees that the City/ FDA reserves the right to deny any application for
Public Assistance at any stage of the proceedings prior to adopting the resolution approving the public
assistance, that the Applicant is not entitled to rely on any preliminary actions by the City/EDA prior
to the final resolution, and that all expenditures, obligations, costs, fees, or liabilities incurred by the
Applicant in connection with the Project are incurred by the Applicant at its sole risk and expense and
not in reliance on any actions of the City/ FDA.
The undersigned, a duly authorized representative of the Applicant, hereby certifies that the
foregoing information is true, correct, and complete as of the date hereof and agrees that the
Applicant shall be bound by the terms and provisions herein.
APPLICANT s NAME
DATE
CITY ACCEPTANCE of APPLICATION DATE
FEE AMOUNT REMITTED DATE
11
EXHIBIT A
SAMPLE "BUT -FOR" ANALYSIS
TOTAL USES 1 $12,000,000 1 $12,000,000
WITH NO BUSINESS
SUBSIDY
WITH BUSINESS SUBSIDY
Land
Sources and Uses
Sources and Uses
Site Work
SOURCES
SOURCES
Mortgage
Equity
Tax Increment
9,600,000
2,400,000
0
8,667,000
2,400,000
933,000
TOTAL SOURCES
$12,000,000
$12,000,000
TOTAL USES 1 $12,000,000 1 $12,000,000
USES
USES
Land
1,500,000
1,500,000
Site Work
300,000
300,000
Soil Correction
468,000
468,000
Demolition
100,000
100,000
Relocation
65,000
65,000
Subtotal Land Costs
$2,433,000
$2,433,000
Construction
6,750,000
6,750,000
Finish Manufacturing
250,000
250,000
Subtotal Construction Costs
$7,000,000
$7,000,000
Soft Costs
350,000
350,000
Taxes
35,000
35,000
Finance Fees
850,000
850,000
Project Manager
542,000
542,000
Developer Fee
540,000
540,000
Contingency
250,000
250,000
Subtotal Soft Costs
$2,567,000
$2,567,000
TOTAL USES 1 $12,000,000 1 $12,000,000
Mortgage
Income Statement
Income Statement
Total Return on Equity
SF
per SF
Total
SF
Per SF
Total
Rent -Space 1
100,000
$8.00
$800,000
100,000
$8.00
$800,000
Rent -Space 2
25,000
$8.00
$212,000
25,000
$8.00
$212,000
Rent -Space 3
25,000
$9.00
$225,000
25,000
$9.00
$225,000
Other
0
$0.00
0
0
$0.00
0
$1,237,500
$1,237,500
Mortgage
20 Term $1,051,646
20 Term $949,439
Total Return on Equity
9.00% Interest
9.00% Interest
$9,600,000
$8,667,000
Net Income
$185,854
$288,061
Total Return on Equity
7.74"/
12.00%
12
"BUT -FOR" ANALYSIS WORKSHEET
WITH NO BUSINESS
SUBSIDY
WITH BUSINESS SUBSIDY
Sources and Uses
Sources and Uses
SOURCES
SOURCES
Mortgage
Equity
Tax Increment
SF Per SF
TOTALSOURCES
TOTAL USES
USES
USES
Land
SF
per SF
Site Work
SF Per SF
Total
Soil Correction
Demolition
Relocation
Subtotal Land Costs
Construction
Finish Manufacturing
Subtotal Construction Costs
Soft Costs
Taxes
Finance Fees
Project Manager
Developer Fee
Contingency
Subtotal Soft Costs
TOTAL USES
Net Income _
Total Return on Equity
13
Income Statement
Income Statement
SF
per SF
Total
SF Per SF
Total
Rent -Space 1
Rent -Space 2
Rent -Space 3
Other
Net Income _
Total Return on Equity
13
I hereby certify the above financial information is true and accurate.
Signature
Title
Date
14
EXHIBIT B
CITY OF CHANHASSEN
APPLICATION PROCEDURES FOR BUSINESS SUBSIDY
1. Applicant shall meet with City staff to discuss the scope of the project, public assistance
being requested, time schedule and other information as may be necessary.
2. Following an initial meeting, applicant shall complete a Business Subsidy application. The
completed application shall be submitted to the Executive Director of the Economic
Development Authority.
3. The application shall be reviewed by City staff on a preliminary basis as to the feasibility of
the project. City staff shall prepare a report on the project.
4. The application shall be placed on an EDA agenda for concept review. The applicant may
make a presentation of the project at that time. City staff will present its preliminary findings.
5. The following items must accompany the application:
a. $4,000 application fee
b. Completed "but -for" worksheet
c. $12,000 application deposit
d. Statement of Public Purpose
e. Description of Project
f Plans and Drawing of Project
g. Company Background Material
h. Letter of Feasibility
i. Market Analysis
j. Pro Forma Analysis
k. Financial Statements
1. Zoning and Comprehensive Plan Analysis
in. Other Pertinent Information
6. Following the necessary analysis of the application by City staff, a report shall be prepared
and presented to the EDA for formal action. If the application is approved, City staff will be
directed to undertake the following steps:
a. Prepare a redevelopment agreement between the City of Chanhassen and the Developer;
b. Prepare or modify the redevelopment plan and TIF plan if required.
If zoning amendments or Planning Commission action is required as part of the project, the
appropriate actions shall be taken prior to final consideration of the redevelopment
agreement.
15
8. Applicant must follow all city development review processes (e.g. site plan, platting,
rezoning, PUD, etc.) before final Business Subsidy application may be approved.
If you have any questions concerning the Business Subsidy application process, please contact:
City of Chanhassen
City Manager
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
(952)227-1119
g:\admin\cp\business subsidy\city of chanhassen updated business subsidy plan.docx
16