HomeMy WebLinkAboutItem 03.aMemorandum
City of Lakeville
Community & Economic Development
To: Mayor and City Council
Economic Development Commission
From: David L. Olson, Community and Economic Development Director
Copy: Justin Miller, City Administrator
Rick Howden, Economic Development Specialist
Date: April 24, 2015
Subject: Review of Preliminary Tax Increment Financing Application from Mendell Inc.
The City recently received an application for Tax Increment Financing (TIF) assistance from
Mendell Inc. Mendell is a medical device manufacturing company located 21463 Greneda
Avenue in Airlake Industrial Park. Mendell relocated from Bloomington to Lakeville in 2003
and currently operates in a 28,600 square foot building and currently has approximately 94
employees. As a result of continued growth of their business, Mendell is proposing to
construct a 18,200 square foot addition to their building and add 12-25 new jobs over the
next two years. The average salary of these jobs will range from $51,000 to $59,300. Bryan
Bartz, President of Mendell Inc. will be present at both the City Council Work Session on April
27th and the EDC Meeting at April 28th to discuss company's continued growth in Lakeville.
The request for Tax Increment Financing is to assist in filling a project financing gap of
approximately $436,612. Mendell is also in the process of submitting an application to the
State of MN Job Creation Fund program which is administered by the MN Department
Employment and Economic Development (DEED) to fill a portion of the project financing gap.
The City Council approved a resolution of support of this application at the April 20' City
Council meeting. The level of assistance under the Job Creation Fund program is determined
by the number and wage level of the actual jobs that are created and retained for at least one
year as well as the total capital investment in building improvements for the project.
The plans for the proposed expansion were forwarded to the County Assessor's Office to
determine the estimated market value of the Mendell property after completion of the
expansion. The Assessor's Office has determined that the range of the market value for the
expanded Mendell building to be between $52 to $56 per square foot. Using the higher end
of this range results in a net increase of market value for property tax purposes of $1,047,200.
This results in a total estimated amount of $114,000 of tax increment being available during
the nine year period in which tax increments can be captured for an Economic Development
TIF District. The TIF application from Mendell indicates that any TIF assistance be provided on
a pay-as-you-go basis which means that TIF funds would be reimbursed on an annual basis
after the payment of property taxes has occurred. This eliminates any financial risk to the City.
While the amount of available TIF assistance for this project does not fill the financing gap,
when matched with State of MN Job Creation Fund reimbursements, should be able to offset
the majority of the financing gap for this expansion project. It should also be noted that TIF
funds are only available to reimburse eligible site improvements which are currently
estimated at $359,000.
Requested Action: If the Council and EDC support this preliminary request from Mendell for
TIF assistance, the next step would be for the City HRA Board and City Council to call for a
public hearing to consider the creation of a new Tax Increment Financing District and retain
Springsted to prepare the required TIF Plans and notifications to Dakota County and ISD #194.
EN DELL,
April 21, 2015
Mr. David Olson
Community and Economic Development Director
City of Lakeville
20195 Holyoke Avenue
Lakeville, MN 55044
Dear David:
Re: Proposed Expansion — Incentive Request
5;tcializing in Precision Machining of Cuslam Medical ?evicc ^omponen's
Thank you for previously meeting with our firm over the past two years to discuss and seek
solutions for our proposed expansion and the potential assistance the City of Lakeville can
provide.
We sincerely appreciate how creative your staff has been to investigate scenarios/options that:
• Maximize building expansion and employee parking opportunities
• Storm water solutions, pond sizing and locations
We include, for your consideration, the application form, fee and additional information for your
review.
Please proceed with your process — time is of the essence.
4 Pcq!F
President
21463 Grenada Avenue • Lakeville, MN 55044
phone 952A69.5500 •fax 952.469.5511
.,r.
www.mendell.com .;,•�:;,.s
CITY OF LAKEVILLE TAX INCREMENT FINANCING
APPLICATION
PROJECT: Mendell Addition
1. Business Name: Mendell, Inc.
Address: 21463 Grenada Ave., Lakeville, MN 55044
Telephone: 952-469-5500
Contact: Bryan Bartz
2. Brief description of the business: Precision machine shop for the medical
device industry. Mendell specialized in high precision machining of
implantable devices, surgical instruments and diagnostic equipment.
3. Present ownership of the site: Lakeville Technologies, LLC.
4. Proposed project: (Building square footage, size of property, description
of buildings — materials, etc.)
The addition will be approximately 18,700 sq. ft. and will expand the
existing manufacturing operation as well as facilitate warehouse and
shipping/receiving activities. The construction materials will match the
existing building — architectural concrete wall panels with steel bar
joist/deck roof. The extensive windows will enhance the production areas
within the building.
5. Total Estimated Project Costs:
a.
1. Land Acquisition 1.18 acres
$ 215,883.00 est.
2. Plat/Land development
$ 79,552.28 est.
b.
Site Development
$ 359,697.00 est.
C.
Building Cost
$1,254,235.00 est.
d.
Soft Costs (Design/Engineering)
$ 273,548.00 est.
e.
1. Financing Costs
$ 65,204.00 est.
2. Impacts from Incentives
• TIF Application costs
Not included
• TIF/DEED Benefits
Not included
f.
Contingencies
Included 3%
Total
$2,248,119.28 est.
1
6. Estimated Project Costs Eligible for TIF Assistance (i.e. Acquisition,
Demolition, Site Improvements, Utilities, Streets):
a. Land Cost $215,883.00
b. Road Cost N/A
c. Site Improvements $359,697.00
7. PLEASE SUBMIT PROJECT PROFORMAS SHOWING NEED FOR
ASSISTANCE (I.E. WITH ASSISTANCE AND WITHOUT).
See attached "Exhibit A" (Lease Market Study)
8. Total Estimated Market Value at completion:
$2,854,300.00 approximately
9. Estimated real estate taxes upon completion:
$104,191.00 +/- approximately
10. Source of Financing
a. Equity TBD
b. Bank Loan TBD
c. TIF (Gap) Up to $436,612.00
Total TBD
11.Amount of Assistance (Estimated Gap): $436,612.00 +/-
12.Type of Assistance Requested (Upfront or Pay -as -you -Go): Pay as you go
13. Name & Address of architect, engineer, and general contractor:
APPRO Development, Inc.
21476 Grenada Ave.
Lakeville, MN 55044
Contact: Jack Matasosky
952-469-2171
2
14. Project construction schedule:
a. Construction Start Date
b. Construction Completion Date
c. If phased project: N/A
July 1, 2015 approximately
December 1, 2015
2015 Year 100% Complete
15. State specific reasons why assistance is necessary for the project (the
"but for" test).
The construction costs for the addition — when combined with the original
building — are excessive for "market rate" rents and cost capitalization.
Please review attached lease aro-forma studv.
16. Please indicate how the project would meet one or more of the following:
Economic Development goals; creation of jobs that pay wages adequate
to support households, job retention, or tax base expansion.
The project will keep 93 jobs, paying an average of $60,200.00/year. The
company anticipates an additional 12-25 jobs, paying an average of
$51,000.00 to $59,297.00 /year. Hiring of these positions is anticipated to
begin as early as April 2015. The typical Mendell employee is a highly
trained machinist and these jobs are highly valued in the community. The
building design is a tribute to the company's employees — incorporating
the highest_quality of infrastructure and finishes to create a great working
PnvirnnmPnt_
17. Municipal Reference (if applicable). Please name any other municipalities
wherein the applicant, or other corporations the applicant has been
involved with, has completed developments within the last five years.
The company moved to Lakeville from Bloomington, MN in 2003. The
company expanded their building in 2008 and has once again outgrown
their present space.
18.Additional Comments:
19. Submit this form along with an initial $500 nonrefundable application fee.
An additional fee of $5,500 will need to be submitted should the request
for assistance proceed.
ADDITIONAL DOCUMENTATION AND CHECKLIST
Applicants will also be required to provide the following documentation.
3
All personal financial information will be kept private and confidential.
❑ 1. Written business plan or a description of the business, ownership/
management, date established, products and services, and future plans.
❑ 2. Two year financial projections, or if housing project, or leased space, include a
10 -year operating pro -forma.
❑ 3. Letter of commitment from other sources of financing, stating terms and
conditions of their participation in the project.
❑ 4. Initial nonrefundable application fee of $500, with a $5,500 fee to follow
should the request for assistance proceed. In addition to defraying the cost of
staff time, the fee will be used to pay costs associated with processing this
request for financial assistance such as legal, engineering and financial
analysis. The City reserves the right to stop the processing of the request until
additional fees are paid should the original amount be insufficient to pay such
costs. That portion which remains unspent, if any, will be returned only if the
project is denied approval.
❑ 5. Attach the following documentation:
Part 1 — Corporation/Partnership Description
Part 2 — List of Shareholders/Partners
Part 3 — Description of Project
Exhibit "A" Part 4 — But For Analysis
Part 5 — List of Prospective Lessees
Part 6 — Legal Description, Property Identification Numbers,
maps of the project area, and project renderings
Part 7 — Public Purpose Narrative
Part 8 — Sources & Uses of Funds — Additional Information
Exhibit "B" Jobs data
The undersigned certifies that all information provided in this application is true and
correct to the best of the undersigned's knowledge. The undersigned authorizes the
City of Lakeville to check credit references, verify financial and other information,
and share this infor ion with other political subdivisions as needed. The
undersigned also a ee to rovide anynitioI information as may be requested
by the City after th filing of this applica
Applicant Name
By Bryan Bartz
ILS u
Date April 21, 2015
Cc: Jack Matasosky, APPRO Development, Inc.
0
Exhibit A
Mendell, Inc
Office
Manufacturing
Automated
Manufacturing/Warehouse
Warehouse Mezzanine
Total
Lease Study
4-21-2015
Existing Building
4,505 sq, ft.
1,243 sq. ft.
23,502 sq. ft.
_3.240 sq. ft.
32,490 sq. ft.
Site Area 1.89 Acres
Off-site (market) lease rates:
With Proposed Addition
7,359 sq. ft.
4,277 sq. ft.
36,314 sq. ft.
3,240 sq. ft.
51,190 sq. ft.
3.07 Acres
Office 7,359 sq. ft.@ $10.00/sq. ft. (midpoint) $ 73,590.00
(cost range $7.50 - $12.50 sq. ft./net)
Manufacturing 4.277 sq. ft.@ $6.60/sq. ft. (midpoint) $ 28,228.00
(cost range $4.70 - $8.50 sq. ft./net)
Automated Manufacturing/Warehouse $181,570.00
36,314 sq. ft.@a $5.00/sq. ft. (midpoint)
(cost range $4.20 - $5.80 sq. ft./net)
Warehouse/Mezzanine 3,240 sq. ft.@ $4.10/sq. ft. (midpoint) $ 13,284.00
(cost range $3.60 - $4.60 sq. ft./net)
Approximate net rent/year $296,672.00
(Target Rate)
Actual project costs/lease capitalization rates:
Land (total acreage 3.07 acres) 133,730 sq. ft. $ 561,663.00
Building shell costs — Original with addition $3,300,000.00
Tenant Improvements — Production specific — original w/addition $ Not Included
Finance costs (assumed) $ 65,204.00
Total Project Cost $3,926,867.00
Lease Capitalization (using actual costs):
$3,926,867.00 @ 8.5% CAP rate = $333,784.00 Actual Lease Rate
$333,784.00 (Actual Lease Rate) $296,672.00 (Target Rate) _ $37,112.00/year (gap)
$37,112.00 (gap) - 8.5% (CAP rate) _ $436,612.00 (project cost gap)
Exhibit B
Mendell 4/22/2015
Building Expansion
2 - 3 Year Plan
Range
Type
*
/
Description
#
Salary
Total
#
Salary
Total
**
Mechanical / Project Engineer
2
$
85,000
$
170,000
2
$
85,000
$
170,000
*
Quality Engineer
1
$
80,000
$
80,000
1
$
80,000
$
80,000
*
Quality Control Manager
1
$
85,000
$
85,000
1
$
85,000
$
85,000
°Industrial
Engineer
0
$
65,000
$
1
$
65,000
$
65,000
*
Document Control Specialist
1
$
50,000
$
50,000
1
$
50,000
$
50,000
°
a`
Applications Engineer
0
$
80,000
$
1
$
80,000
$
80,000
*
Administrative Assistant
1
$
35,360
$
35,360
2
$
35,360
$
70,720
6
$
420,360
9
$
600,720
**
Machinist - Milling
2
$
52,000
$
104,000
3
$
52,000
$
156,000
Machinist - Milling Apprentice
0
$
35,360
$
-
2
$
35,360
$
70,720
**
Machinist - Swiss
2
$
62,400
$
124,800
3
$
62,400
$
187,200
Machinist - Swiss Apprentice
0
$
35,360
$
-
2
$
35,360
$
70,720
Quality Technician
0
$
41,600
$
-
1
$
41,600
$
41,600
Laser Marking Technician
1
$
31,200
$
31,200
1
$
31,200
$
31,200
*
Finisher
1
$
31,200
$
31,200
4
$
31,200
$
124,800
6
$
291,200
16
$
682,240
12
$
711,560
25
$
1,282,960
"Immediate Immediate hiring required to ensure technical expertise & validated qualified processes by occupancy date
Asterisks denote number of immediate required employees
Mendell, Inc
Employees by City
As of March 31, 2015
City
Headcount
%
Apple Valley
2
2%
Bloomington
9
10%
Burnsville
2
2%
Dundas
1
1%
Eagan
8
9%
Eden Prairie
1
1%
Elko
2
2%
Faribault
2
2%
Farmington
9
10%
Hastings
1
1%
Lakeville
18
19%
Lonsdale
3
3%
Maplewood
1
1%
Medford
3
3%
Mendota Heights
1
1%
Minneapolis
2
2%
Montgomery
2
2%
New Hope
1
1%
New Prague
4
4%
Northfield
4
4%
Oakdale
1
1%
Pine Island
1
1%
Prior Lake
2
2%
Randolph
1
1%
Richfield
2
2%
Rosemount
3
3%
Saint Paul
1
1%
Savage
2
2%
Shakopee
2
2%
South St. Paul
1
1%
St Paul
1
1%
Grand Total 93
3/29!2015
Medical Machining
Medical Machining I Precision Medical Machining - Mardell
Centrally located in the heart of Medical Alley, we make it our responsibility to ensure quality control is at its peak during the entire medical device
machining process as our machined parts can have a profound impact on everyday lives of the end users. At Mendell, we understand that nearly every
medical component that comes from our shop will be used to improve someone's quality of life.
Our primary markets for implants and surgical instrumentation within the medical industry include:
* Orthopedic Spine 0 Pelvic • Cardiovascular at Endovascular Devices Ophthalmologic
Testing & Analysis
• Orthopedic Medial Devices • Trauma , Endovascular
We have built our reputation on machining medical parts that are technologically advanced and built to the high
standards put forth by the medical industry. Our attention to detail and years of experience in the medical
machining industry provide you with the parts that are manufactured with the greatest care and attention to
detail, meeting your requirements every time. We have the capability to machine a variety of medical grade
-
materials including:
PEEK OPTIMA TM • PEEK'`
fµ40 ,
Titanium G UHMW PE
• Cobalt Chrome • Ultem
• 17-4 Stainless Steel i Radel
• 300 Series Stainless Steel o Acetal
* 400 Series Stainless Steel 0 Polycorbonate
• Medical Grade Polymers • Aluminum
The Mendell facility is state-of-the-art and uses technologically advanced machines for precision medical machining.
`>4
We use swiss machining up to simultaneous 12 axis and CNC high speed milling machines with up to 5
sin ultaneous axis. We also have CNC turning with live tocling and wire EDM 4th axis. Our CAD/CAM software
creates exact 3D model replicates of our customer's medical devices to ensure accuracy in manufacturing. We also
provide a variety of finishing operations in-house including:
Laser marking Bead blasting p Micro blasting Powder blasting Pin "Tumbling
Tumble blasting
Other finishing operations that are not done in-house, including welding, chemical processing, heat treating, or color coating, are contracted out to
companies with standards as high as our own. Our quality control department is involved with every project from purchase order to final inspection. This
department keeps a careful watch on the entire manufacturing process to ensure all machined parts adhere to regulations put forth by the medical
industry. Our quality control processes are very important to us; if it comes from Mendell, you can expect the ultimate in quality,
http:G^r ww,nvndell.conYrnadical_machring.php 12
,W91=5
Micro Machining
Micro Mach dng - Mendell
Mendeli is a leader in micro machining for the medical industry. From orthopedic screws to heart
implants, Mendell manufactures the most intricate and minute medical implantables used in the market
today. With a state of the art facility and advanced technology, we routinely manufacture micro-
miniature parts, from prototypes thru high volume production quantities.
With tolerances routinely machined to .0001, internal or external threading is common on micro
machined parts. Here at Mendell, we stretch the limits by micro machining tighter tolerances and more
surface critical finishes. Using swiss machining and 4 axis wire EDM, our medical machining involves
some of the smallest, most complex parts on the market. We provide design for manufacturing (DFM)
assistance if needed and create 3D models to ensure design accuracy using our advanced CAD/CAM
s oftwa re.
We work with a variety of medical grade and non-medical grade materials including:
• PEEK OPTIMA""
Titanium
• Cobalt chrome
• 17-4 stainless steel
300 series stainless steels
400 series stainless steels
• Aluminum
PEEK"
• UHMW PE
• Ultem
• Radel
• Aceta
• Polycorbonate
Mendell takes care in creating intricate parts to be used in the medical industry. Our expertise in micro machining allows us to manufacture parts than are
smaller than the tip of your fingernail while maintaining the exactness the design calls for. Many of our products are used to save lives and we take our
job in manufacturing these parts seriously. Our Engineering, Manufacturing and quality Control departments take care to ensure each part meets or
exceeds the specified requirements and are of the highest quality.
For more information on Mendell and our micro -miniature medical device manufacturing, contact us. We use our acquired experience in micro machining to
bring you the most advanced manufacturing solutions in the market.
http:lAaAw,iT'andell.comJiricro machring.php 1112
3!'29!20'13
Swiss Machining
Swiss Machining I Swiss Screw Machining - Mendell
If it can be machined, Mendell can make it! Swiss machining is designed to create the most intricate
paits needed for technologically advanced industries. We work with small companies and start-up OEMs
all the way Lhrough industry leaders in the medical, aerospace, and defense industries to bring them
the best in quality parts. We machine prototypes through high volume production using our advanced
swiss machining centers. We are able to machine components in a wide variety of sizes, dimensions,
and shapes, determined by your design and the equipment used for each project.
Depending on the machine used, the following can apply to the machining process:
5, 6, 8, 11, or 12 simultaneous axis
u Simultaneous turning and drilling
• Machining with up to 4 tools working simultaneously
Enhanced synchronized superimposed operation
• Up to 22 tools for main and sub -spindle work
Rotating and synchronized guide bushings
Up to 16,000 RPM main spindle
At Mendell, our attention to detail, quality control, and customer service has built our reputation as a
leader in medical device manufacturing. Medical implants and instrumentation can be incredibly detailed
and accuracy is essential. Our Swiss machined products are of the highest quality and always built to
exact specifications. We adhere to all medical regulations and are ISO 13485:2003 certified. Our Swiss screw components can be provided through lean
manufacturing initiatives if needed. Inventory management systems, including JIT, Kanban, and Dock to Stock, are tightly controlled and products are
shipped to you on time, every time.
For more information on Mendell or our Swiss machining capabilities, contact us! We can help you secure the highest quality Swiss screw machined
products to meet your exact specifications,
http:/Ap, wv.mrxiell.com/sWss_mach dng.php X12
a29MI5
Medical Deuce Engineering -Mendell
The ideal engineer is a composite ... He is not a scientist, he is not a mathematician, he is not a sociologist or writer; but he may use the knowledge and
techniques of any or all of these disciplines in solving engineering problems. —N.W.Dougherty
Mendell's engineering staff pulls from its nearly 100 cumulative years in manufacturing while maintaining
their technical skills through independent research, external training, and customer and vendor
interface, to ensure that Mendell captures every nuance of the customer's design intent.
Although the majority of the Engineering team's experience is based in Medical Device manufacturing,
they understand that their success depends on an objective, cohesive team approach with other
disciplines inside and outside of Mendell's facility. This understanding allows the team to coordinate
multiple projects while encouraging and facilitating the effective performance of others. The
Engineering group ensures that Mendell isn't dependent on the heroics of competent people but
instead has a continuously improved process our customers can count on.
S oftwa re
SolidWorks Professional 2010
a SolidWorks Standard 2010
GibbsCam 2010
Adobe Professional
Competencies
R Mechanical Engineer, BS
Industrial Engineer, BS
Functional gauging, fixture and custom tool design.
Process development, maintenance and improvement.
GD&T and print reading
Process mapping
Project management
o Facilitate preproduction activities
o Facilitate post -production activities
i Creating SOP's and WI's
Acting liaison between customer engineering and manufacturing
Let our Engineers help you with your next medical device engineering project, contact us today!
http:#vmw.rnendel1. contreng ineeri ng. php 112
3129/2415
7 AW,
--- 3
Quality Assurance and Control
Mendell's QA and QC staffs are an unusual bunch of
professionals. While their colleagues in Manufacturing and
Engineering would grin and offer replies containing phrases
such as, "That's true" or "Obviously", further explanation
reveals the true nature of their uniqueness.
First, the amount of professional experience in the Quality
disciplines is impressive. With an average of almost 19 years,
it's very rare for an unfamiliar challenge to arise, be it
measurement systems or process characterization.
The Medical Device and Aerospace manufacturing sectors are
the primary sources of this team's Quality education, training
and experience.
Mendell
Quali;ij� Assurance and Control
Competencies
Process Validation
Risk Management
Investigational Studies
Clean Room Validation
Design, Use and Training
QMS Design and Implementation
ISO 13485:2003 Lead Auditor Certified
Software Development and Validation
Six Sigma Green & Black Belt Training*
Structured Problem Solving
Balanced Scorecard
Failure Analysis
GD&Tand Print Reading
Functional Gauge and Fixture Design
Chemical stress analysis
* 2 CSSBB's on staff
Quality Assurance and Control - Mendell
Second, the broad range of competencies found in our QA and QC teams are typically
only found in much larger companies, such as medical device manufacturers. From Quality
Systems integration and compliance, to Process Validation (IQ,OQ,PQ) and Process
Improvement, Mendell's Quality Assurance and Control teams are very wel! versed in the
Quality disciplines. Currently, the team has members who hold the ASQ certifications of
Certified Manager of Quality and Six Sigma Black Belt.
And lastly, Mendell Quality Control employs the most advanced inspection equipment
available. Both contact and visual measurement technologies are effectively utilized in
the verification of product conformance.
Major Dimensional Measuring) Systems and Software
Zeiss and Bendix CMM
Mycrona and Micro -Vu VMM
2 Optical Comparators (10-100X Mag. Capability)
4 Vertical Height Measuring Systems
Laser Micrometer
2 Height Micrometers
hfp://w,kw.rnandell.corNq a_conh,ol.php 112
Springsted
DRAFT MEMORANDUM
TO: David Olson, Community and Economic Development Director
FROM: Mikaela Huot, Vice President/Consultant
DATE: April 22, 2015
Springsted Incorporated
380 Jackson Street, Suite 300
Saint Paul, MN 55101-2887
Tel: 651-223-3000
Fax: 651-223-3002
www.springsted.com
SUBJECT: Preliminary Financing Projections for proposed new TIF project (Mendell Expansion Project)
The City of Lakeville has received a Tax Increment Financing (TIF) assistance application for the proposed
expansion project of an existing business, The applicant, Mendell, Inc, is proposing an approximate 18,700 square
foot expansion to its existing facility to accommodate future growth of the company. The purpose of this
memorandum is to provide a summary of Springsted's review of the preliminary application and preliminary tax
increment revenue projections based on the information made available to us relative to the proposed project.
Tax Increment Assumptions
Springsted made certain assumptions to calculate the estimated amount of tax increment revenue generated by the
proposed new project. Those assumptions include the following:
Tax Increment Financing (TIF) District — Economic Development
For our analysis we anticipate that the proposed project would qualify under the Tax Increment statute as an
economic development district.
• Economic development districts must consist of a project that is in the public interest because:
o It will discourage commerce, industry, or manufacturing from moving their operations to another
state
o It will result in increased employment
o It will result in preservation and enhancement of the tax base
■ Qualification as economic development TIF District
• Maximum TIF District term
0 8 years after receipt of first increment
0 9 total years
• Base value:
o Existing land and building
City of Lakeville, Minnesota
Proposed TIF District No. 20: Mendell Expansion Project
April 22, 2015
Page 2
o PID: 22-31060-01-010: $1,769,700
• Estimated incremental value estimated to be new building value only
o 18,700 square foot building expansion
o $56/square foot estimated valuation
o $1,047,200
• Construction complete prior to December 31, 2015
o 100% assessed in January of 2016 for taxes payable in 2017
• Payable 2015 tax rates remain constant through district term
o City: 38.948%
o County:
29.633%
o School:
31.459%
o Other:
5.033%
o Total:
105.073%
• Fiscal disparities contribution rate of 39.37227%
o Contribution made from TIF district property
• Current class rates remain constant through district term
• 3% annual market value inflator
• Developer Payment
o 95% pledged to TIF costs
o 5% withheld for administrative expenses
Tax Increment Revenue Estimates
Thank you for the opportunity to be of assistance to the City of Lakeville. Please let me know how we can best assist
you as this project moves forward and should you have any questions please feel free to contact me at 651.223.3036
or mhuot(a)sprinpsted.com.
Projected Amount
Estimated total gross revenues
$120,260
Estimated City Retained Amount 5%
$6,014
Estimated Total Net Revenues
$114,246
Estimated Present Value
date of 6/30/15 and 4% interest rate
$89,617
Thank you for the opportunity to be of assistance to the City of Lakeville. Please let me know how we can best assist
you as this project moves forward and should you have any questions please feel free to contact me at 651.223.3036
or mhuot(a)sprinpsted.com.
City of Lakeville, Minnesota
Proposed TIF District No. 20: Mendell Expansion Project
April 22, 2015
Page 3
Projected Tax Increment Report
City of Lakeville, Minnesota
Tax Increment Financing (Economic Development) District No. 20
Proposed Business Expansion (Mendell Machine)
Prelim TIF: Incremental Building Growth of $1.047M with 3% MV Inflator
Annual
Period
Ending
1
Total
Estimated
Market Value
2
Total
Net Tax
Capacity
3
Less:
Original
Net Tax
Capacity *
4
Less:
Fiscal
Disp. @
39.3723%
5
Retained
Captured
Net Tax
Capacity
6
Times:
Tax
Capacity
Rate **
7
Annual
Gross Tax
Increment
8
Less:
State Aud.
Deduction
0.360%
9
Subtotal
Net Tax
Increment
10
Less:
Admin.
Retainage
5.00%
11
Annual
Net
Revenue
12
P.V.
Annual
Net Rev. To
06/30/15
4.00%
12/31/15
1,769,700
34,644
34,644
0
0
105.073%
0
0
0
0
0
0
12/31/16
1,769,700
34,644
34,644
0
0
105.073%
0
0
0
0
0
0
12/31/17
2,816,900
54,838
34,644
7,951
12,243
105.073%
12,864
46
12,818
641
12,177
11,147
12/31/18
2,827,372
55,047
34,644
8,033
12,370
105.073%
12,998
47
12,951
648
12,303
10,829
12/31/19
2,837,949
55,259
34,644
8,117
12,498
105.073%
13,132
47
13,085
654
12,431
10,521
12/31/20
2,848,631
55,473
34,644
8,201
12,628
105.073%
13,268
48
13,220
661
12,559
10,221
12/31/21
2,859,421
55,688
34,644
8,286
12,758
105.073%
13,406
48
13,358
668
12,690
9,930
12/31/22
2,870,318
55,906
34,644
8,371
12,891
105.073%
13,545
49
13,496
675
12,821
9,647
12/31/23
2,881,324
56,126
34,644
8,458
13,024
105.073%
13,685
49
13,636
682
12,954
9,372
12/31/24
2,892,440
56,349
34,644
8,546
13,159
105.073%
13,826
50
13,776
689
13,087
9,104
12/31/25
2,903,668
56,573
34,644
8,634
13,295
105.073%
13,970
50
13,920
696 1
13,224
8,846
$120,694
$434
$120,260
$6,014
$114,246
$89,617
Original Net Tax Capacity
based on payable 2015 property tax information
Projections include total estimated market value of $1,047,200 based
on preliminary information
provided by assessor.
** Final payable 2015 tax capacity rates -
ISD 194 and
Vermillion River Watershed District.
SITE SUMMARY
SITE AREA:
133,894 S.F.
3.07 ACRES
BUILDING AREA:
EXISTING BUILDING:
28,596 S.F.
PROPOSED. ADDITION:
18,222 S.F.
TOTAL BUILDING:
46,818 S.F.
EXISTING PARKING:
61 STALLS
PARKING TO BE
REMOVED:
21 STALLS
PROPOSED PARKING
TO BE ADDED:
r�AAPPRO',
TOTAL PARKING:
87 STALLS
NET GAIN:
ADJACENT BLDG
DEVELOP IE�T
NEW ELECTRICAL TRANSFORMER
111.01"1 � V+C
LOCATION
20'-0.
PROPERTY LINE _ _ — —
— — —
__
18D'-0'
21 EXISTING PARKING STALLS
7 TO BE REMOVED
18'-C' 24'-0' 18'-0'
1a -a^
I
21475 GRENADA AVENUE
LAKEVILLE, MN 55044
FAX szn3
:
EMAILonlcepapP�odeYaloPmem.com
I
I
LU
PROPOSED ONE STORY
I
S
EXISTING ONE STORY BUILDING
18,202213 F\\\\\\\\
ILL `
O I
ma
28,59fi S.F
N\\\\\\\SUR
NEW DRIVEIN O00
�lz-
47 NEW PARKING
STALLS TO BE
ADDED
I
I
I
—
b
LU
w
10
N
8
cca
a
w
9
61
7 2
N
m
N
EXISTING FRONT ENTRY
�
I
1
19
40 EXISTING PARKING SPACES TO REMAIN
_
_
TWO LOADING DOCKS
AINING/
20
L
T
—
PROPERTY LINE '.^ — — ---... _ _
\
TRUCK STCREE WALL
4
I
PRELIMINARY
NOT FOR CONSTRUCTION
1
27
z
a
m
i
LINE
_ — PROPER
__-
—
—
�1
F --
w
No. Desuipllon Dale
EXISTING STORM I
WATER POND I
I
\\ I
I
-
dl
I I I
ADJACENT BUILDING
I ��
�
J
I
ff
1
I
MENDELL
MACHINE
ADDITION
SITE PLAN
Rciea ean,�c 15-03-0030
Dte Issue Date
0—by SWC
1=30-0- ..
>;�Y�SitePlan
Checked by Checker
Al -1
Scale 1" = 30'-0"
SITE SUMMARY
SITE AREA:
133,894 S.F.
3.07 ACRES
BUILDING AREA:
EXISTING BUILDING:
28,596 S.F.
PROPOSED. ADDITION:
18,222 S.F.
TOTAL BUILDING:
46,818 S.F.
EXISTING PARKING:
61 STALLS
PARKING TO BE
REMOVED:
21 STALLS
PROPOSED PARKING
TO BE ADDED:
47 STALLS
TOTAL PARKING:
87 STALLS
NET GAIN:
26 STALLS