HomeMy WebLinkAboutHRA Item 03February 4, 2019 Item No.________
HRA MEETING
RESOLUTION APPROVING AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT
NO. 24 WITHIN THE AIRLAKE REDEVELOPMENT PROJECT AREA NO.1 AND
APPROVING A TAX INCREMENT FINANCING PLAN
Proposed Action
Staff recommends adoption of the following motion: Move to adopt a resolution approving the
establishment of Tax Increment Financing District No. 24 within Airlake Redevelopment Project No. 1 and
approving the Tax Increment Financing Plan for the QA1 Precision Products Incorporated Project.
Overview
QA1 Precision Products Inc. has applied for Tax Increment Financing (TIF) for a proposed 100,000
square foot manufacturing facility. This new facility is proposed to be located in Interstate South Logistics
Park, located at the southwest quadrant of Co. Rd. 70 and Dodd Blvd. The proposed new manufacturing
facility would replace two smaller buildings owned and occupied by QA1 in Airlake Industrial Park.
The TIF application indicates that “but for” Tax Increment Financing, it is not economically feasible for
QA1 to relocate their manufacturing facility from its current location(s) in Airlake Industrial Park. There
are significant costs to preparing the project site for construction. The County Assessor has provided an
estimated market value of $6,000,000 for the proposed project which would generate an estimated $555,701
of tax increment over 7 years, of which a maximum of $526,015 would be provided to the project to offset
infrastructure and site development costs. The project will result in a minimum of 19 new full-time jobs
being created in Lakeville with an average wage of $40,600 per year. The City Council will have the option
to terminate the TIF District after seven years or extend it an additional two years to use the remaining two
years of captured increment for TIF eligible activities within the Airlake Project area.
The EDC reviewed the proposed creation of this TIF District on October 30, 2018 and the proposed TIF
Agreement terms on January 29, 2019 and recommended approval of the proposed project. The City
Council discussed this request for TIF assistance at City Council Work Sessions on November 26, 2018 and
January 28, 2019. A copy of the proposed TIF Plan was submitted to Dakota County and Lakeville School
District No. 194 for review and comment. Staff recommends approval of the proposed creation of TIF
District No. 24 and Tax Increment Financing Plan.
Primary Issues to Consider
• Is this request for TIF assistance consistent with the City’s policies? The project will result in the
retention of an existing business with 95 employees, the creation of a minimum of 19 new jobs
and will result in $6,000,00 in new tax base which is consistent with the City’s TIF and Business
Subsidy Policies.
Supporting Information
• HRA Resolution, Proposed TIF Plan as prepared by Springsted Inc.
Financial Impact: $_$ 555,701 Budgeted:Y/N__N___Source:_Captured Tax Increments
Envision Lakeville Community Value: Diversified Economic Development
Report Completed by: David L. Olson, Community & Economic Development Director
HOUSING AND REDEVELOPMENT AUTHORITY FOR THE CITY OF
LAKEVILLE, MINNESOTA
CITY OF LAKEVILLE
DAKOTA COUNTY, MINNESOTA
RESOLUTION NO. _____________
RESOLUTION APPROVING THE
ESTABLISHMENT OF A TAX INCREMENT FINANCING DISTRICT WITHIN AIRLAKE
REDEVELOPMENT PROJECT NO. 1 AND
APPROVING A TAX INCREMENT FINANCING PLAN THEREFOR
A. WHEREAS, the Housing and Redevelopment Authority for the City of Lakeville
("Authority") and the City of Lakeville, Minnesota (the "City") have adopted a Redevelopment
Plan (the "Redevelopment Plan") and established the Airlake Redevelopment Project Area and
created Tax Increment Financing Districts within the Airlake Redevelopment Project Area and
adopted Tax Increment Financing Plans with respect to these Tax Increment Districts pursuant to
Chapter 469 of the Minnesota Statutes in an effort to encourage development and redevelopment
of certain designated areas within the City, which Redevelopment Plan, plans and districts have
been amended from time to time; and
B. WHEREAS, it has been proposed that the City establish Tax Increment Financing
(Economic Development) District No. 24 ("TIF District No. 24") as an economic development
district and adopt a Tax Increment Financing Plan therefor (the "TIF Plan").
C. WHEREAS, on November 26, 2018, the Authority authorized the City to
undertake, on the Authority’s behalf, all of the public development activities in connection with
the development of the Developer’s proposal, including the administration of tax increment as
accounted for in the City’s financial statements; and
D. WHEREAS, the Authority has investigated the facts and have caused the TIF Plan
to be prepared and has performed all actions required by law to be performed prior to the approval
of the TIF Plan; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the
Authority that the TIF Plan for TIF District No. 24 is hereby approved.
Adopted this 4th day of February, 2019.
_________________________
Chair
Attest: ________________________
Secretary
QA1 Proposed Project Site
Property Information
October 25, 2018 0 450 900225 ft
0 130 26065 m
1:4,800
Disclaimer: Map and parcel data are believed to be accurate, but accuracy is not guaranteed. This is not a legal document and should not be substituted for a title search,appraisal, survey, or for zoning verification.
Proposed
Project Site
8 Acres
Schneiderman's
Distribution Center
Future 150,000 SF
Spec Building
City of Lakeville, Minnesota
Housing and Redevelopment Authority for the City of Lakeville
Modification to Redevelopment Plan for Airlake Redevelopment
Project No. 1
And
Tax Increment Financing Plan
for
Tax Increment Financing (Economic Development)
District No. 24
(QA1 Precision Products Inc. Project)
Draft Dated: February 4, 2019
Public Hearing Scheduled: February 4, 2019
Anticipated Approval Date: February 4, 2019
Prepared by:
SPRINGSTED INCORPORATED
380 Jackson Street, Suite 300
St. Paul, MN 55101-2887
(651) 233-3000
WWW.SPRINGSTED.COM
TABLE OF CONTENTS
PART I
LAKEVILLE
AIRLAKE REDEVELOPMENT PLAN
I. INTRODUCTION AND LEGAL BASIS
A. Statement of Intent of Modification ...................................................................................... 1
B. Statement of Public Purpose .............................................................................................. 1
C. Project Area Boundary ..................................................................................................... 1
D. Statement of Authority ...................................................................................................... 1
II. REDEVELOPMENT PROJECT
A. Redevelopment Plan Objectives ......................................................................................... 1
B. Land Use ....................................................................................................................... 2
C. Development Standards ................................................................................................... 2
D. Environmental Controls .................................................................................................... 2
E. Redevelopment Activities .................................................................................................. 3
1. City Activities -Original Plan
2. City Activities - Plan Modification
3. Private Activities - Original Plan
F. Project Cost Estimates ..................................................................................................... 3
G. Relocation ..................................................................................................................... 3
H. Development Contracts .................................................................................................... 3
I. Operation of Public Improvements ...................................................................................... 4
J. Administriation of Project .................................................................................................. 4
K. Modification Plan ............................................................................................................. 4
PART I ............................................................................................................................................................... EXHIBIT I
TABLE OF CONTENTS
(Continued)
PART II
TAX INCREMENT FINANCING PLAN NO. 24
Section Page(s)
A. Definitions ..................................................................................................................... 5
B. Statutory Authorization ..................................................................................................... 5
C. Statement of Need and Public Purpose ................................................................................ 5
D. Statement of Objectives .................................................................................................... 5
E. Designation of Tax Increment Financing District as an Economic Development District .................... 6
F. Duration of the TIF District ................................................................................................. 7
G. Property to be Included in the TIF District.............................................................................. 7
H. Property to be Acquired in the TIF District ............................................................................. 7
I. Specific Development Expected to Occur Within the TIF District ................................................. 8
J. Findings and Need for Tax Increment Financing ..................................................................... 8
K. Estimated Public Costs ................................................................................................... 10
L. Estimated Sources of Revenue ........................................................................................ 10
M. Estimated Amount of Bonded Indebtedness ........................................................................ 11
N. Original Net Tax Capacity ............................................................................................... 11
O. Original Tax Capacity Rate .............................................................................................. 11
P. Projected Retained Captured Net Tax Capacity and Projected Tax Increment ............................. 12
Q. Use of Tax Increment ..................................................................................................... 12
R. Excess Tax Increment .................................................................................................... 13
S. Tax Increment Pooling and the Five Year Rule ..................................................................... 13
T. Limitation on Administrative Expenses ............................................................................... 14
U. Limitation on Property Not Subject to Improvements - Four Year Rule ....................................... 14
V. Estimated Impact on Other Taxing Jurisdictions ................................................................... 15
W. Prior Planned Improvements ............................................................................................ 15
X. Development Agreements ............................................................................................... 16
Y. Assessment Agreements ................................................................................................ 16
Z. Modifications of the Tax Increment Financing Plan ................................................................ 16
AA. Administration of the Tax Increment Financing Plan .............................................................. 16
AB. Financial Reporting and Disclosure Requirements ................................................................ 17
Map of the Tax Increment Financing District within Redevelopment Project Area .............................. EXHIBIT I
Assumptions Report ........................................................................................................................... EXHIBIT II
Projected Tax Increment Report ......................................................................................................... EXHIBIT III
Estimated Impact on Other Taxing Jurisdictions Report...................................................................... EXHIBIT IV
Market Value Analysis Report ............................................................................................................. EXHIBIT V
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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PART I
REDEVELOPMENT PLAN FOR
AIRLAKE REDEVELOPMENT PROJECT
I. INTRODUCTION AND LEGAL BASIS
Section A Statement of Intent
The City proposes to implement the plan objective listed in Section II.A.3 of the Original Redevelopment Plan
approved by the Authority and Council in 1984. The activity objective primarily includes the expansion of the
development objectives of the Project Area to include the proposed QA1’s Project TIF 24 as well as certain Airlake
public improvements.
Section B Statement of Public Purpose
No Change
The Authority and Council find that there is a need to provide impetus for private development, maintain and increase
employment, and to increase tax base for the taxing jurisdiction within the City’s corporate limits. These public
purpose goals are not attainable in the foreseeable future without the intervention of the Authority and City in the
normal development process.
Section C Project Area Boundary
The boundaries of the Project Area are not being modified with the creation of the proposed Tax Increment Financing
District No. 24. The proposed addition of the new development is within the current Project Area boundaries to
further meet the City’s Redevelopment Plan objectives. The boundaries of the Project area are shown in Exhibit “I”
“Project Area Boundary Map”. All land included in the Project Area is within the legal boundaries of the City.
Section D Statement of Authority
No Change
The Authority is authorized to create and modify a project pursuant to Minnesota Statutes Sections 469.001 to
469.047 (the HRA Act) within boundaries of municipalities. The project as contemplated by this Plan consists of a
Redevelopment Project in the HRA Act, pursuant to Section 469.002, Subdivision 14 and Minnesota Statutes, Section
469.028, Subdivision 3.
II. REDEVELOPMENT PROJECT
Section A Redevelopment Plan Objectives
No Change
The Authority and City, through the implementation of this Plan, seek to achieve the following objectives:
1. To provide logical and organized land use for the Project Area consistent with the Comprehensive Land Use
Plan and the zoning ordinance of the City.
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Lakeville, Minnesota
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2. To promote the prompt development of property in the Project Area with a minimal adverse impact on the
environment
3. To provide adequate streets, utilities, and other public improvements and facilities to enhance the Project
Area and the City for new and existing development.
4. To enhance the Project Area and the City and surrounding area by retaining current and providing additional
employment opportunities for the residents of the City and surrounding community.
5. To increase the City’s tax base.
6. To afford existing business in the City the opportunity to expand or relocate within the Project Area.
7. To stimulate development and investment within the project Area by private interest by providing land of
suitable size and configuration to permit its economic and appropriate development.
Section B Land Use
No Change
1. Current use:
a. The project is partially vacant and undeveloped and used for both industrial and farming purposes.
The Area is principally Zoned I-1 and I-2, which provides for the establishment of warehousing, light
and heavy industrial and manufacturing development.
2. Future Land Use:
a. It is anticipated that the Project Area will develop consistent with existing zoning districts. The uses
of the Project Area proposed are consistent with the Plan, the Lakeville Comprehensive Plan, and,
to the knowledge of the City and Authority at this time, all other federal state and local laws and
regulation.
Section C Development Standards
The Authority and City will consider, among other things, the following factors when evaluating development
proposals in all phases:
1. Degree to which development objectives are provided for or enhanced.
2. Consistency with this Plan and the Lakeville Comprehensive Plan.
3. Ability of proposed tax increment projects to generate enough annual tax increment to retire the debt created
by the project.
4. Developer’s ability to perform both from a standpoint of financial ability to perform and the necessary
experience and expertise to complete the proposed development.
5. Displaced Project Area property owners and tenants will be given priority over competing projects of similar
scale and magnitude.
Section D Environmental Controls
It is presently anticipated that the proposed development in the Project Area will not present major environment
problems. All municipal actions, public improvements, and private development will be carried out in a manner that
will comply with applicable environmental standards. Then environmental controls to be applied within the Area are
contained within the codes an ordinance of the City of Lakeville.
The Minnesota Code of Agency Rules (6 MCAR 3.021-3.056) defines Minnesota’s environmental policy. The
threshold factor for the industrial/commercial projects on second class cities is 1,000,000 square feet (gross floor
area). Projects above this threshold would require an Environmental Impact Statement. There are no properties on
the National Historic Register of Historic Places within the Project Area.
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 3
Section E Redevelopment Activities
The Authority and the City proposes to implement this plan in phases. The activities of this Plan are described as
follows:
1. City Activities – Original Plan
a. To acquire the land from the current owners and dedicate the land to an acceptable developer for
the purposes of constructing a 150,000 square foot office, warehouse and manufacturing facility.
2. City Activities – Plan Modifications
a. A full discussion of the proposed City Activities can be found in Tax Increment District No. 4, 13, 14,
15, 16, 17, 18, 19, 20, 21, 22, 23 and 24 Plans prepared by the City’s consultant(s) and is hereby
adopted by reference.
3. Private Activities – Original and Modified Plan
a. Phase One (TIF# 4) – Please see TIF #4 Plan (decertified)
b. Phase Two (TIF #13) – Please see TIF #13 Plan (decertified)
c. Phase Three (TIF #14) – Please see TIF #14 Plan (decertified)
d. Phase Four (TIF #15) – Please see TIF #15 Plan (decertified)
e. Phase Five (TIF #16) – Please see TIF #16 Plan (decertified)
f. Phase Six (TIF #17) – Please see TIF #17 Plan (decertified)
g. Phase Seven (TIF #18) – Please see TIF # 18 Plan (active)
h. Phase Eight (TIF #19) – Please see TIF # 19 Plan (active)
i. Phase Nine (TIF #20) – Please see TIF #20 Plan (decertified)
j. Phase Ten (TIF #21) – Please see TIF #21 Plan (never certified)
k. Phase Eleven (TIF #22) – Please see TIF #22 Plan (active)
l. Phase Twelve (TIF #23) – Please see TIF #23 Plan (active)
m. Phase Thirteen (TIF #24)- Please see TIF #24 Plan (proposed)
Section F Project Cost Estimates
A full description of project costs is provided in Tax Increment Financing District No. 24 project budget.
Section G Relocation
No Change
Phase One of the Plan requires no relocation. In subsequent phases where development proposals require the
acquisition of either commercial, industrial or residentially occupied parcels of land, the displaced party or parties shall
be eligible for and receive those relocation benefits in conformance with the Minnesota Uniform Relocation Act.
Minnesota Statutes, Section 117.50-56. The current phase does not require relocation.
The relocation plan, if applicable, will be part of any tax increment financing plan that provides for acquisition and
subsequent displacement.
Section H Development Contracts
No Change
The City and Authority will not authorize any public improvement or facilities projects nor acquire any property for
development which will be wholly or partially funded by the use of tax increment financing without first having secured
development contracts.
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 4
The Development Contracts shall require the developer to among other things, cause to be constructed an industrial
facility of at least a specified minimum cost, and having a specified minimum Assessor’s Market Value; to complete
the work by a specified date pursuant to plans and specifications submitted to and building permits issued by or on
behalf of the City, and pursuant to an and in accordance with all other applicable governmental regulations; and to
demonstrate its financial capability for doing so.
Section I Operation of Public Improvements
No Change
All public improvements constructed under the provisions of this program shall be operated by the City of Lakeville in
the same manner as all publicly owned streets and utilities.
Section J Administration of Project
No Change
The Housing and Redevelopment Authority for the City of Lakeville shall be responsible for seeing that contents of
this plan are promoted, implemented and enforced. The Executive Director shall be delegated day by day
responsibilities while the Board of Directors shall make all policy regarding the Project Area. Administrative
maintenance activities will be funded out of tax increment revenue and other HRA funds.
Section K Modification of Plan
No Change
Modifications or revisions of this Plan which change the permitted uses; modify the Project Area Boundary; set forth,
revise, or modify any Developers Contract with respect to any part of the Project or terminate all or any part of the
Project require approval of such modifications by the Authority and the City, upon notice and other public hearing as
required for the adoption of this Plan and in accordance with Section 469.029, Subdivision 6 of the Act.
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 5
PART II
TAX INCREMENT FINANCING PLAN NO. 24
Section A Definitions
The terms defined in this section have the meanings given herein, unless the context in which they are used indicates
a different meaning:
“Authority” means the Housing and Redevelopment Authority for the City of Lakeville.
"City" means the City of Lakeville, Minnesota; also referred to as a "Municipality".
"City Council" means the City Council of the City; also referred to as the "Governing Body".
"County" means Dakota County, Minnesota
"Redevelopment Project Area" means Airlake Redevelopment Project No. 1 in the City, which is described in the
corresponding Redevelopment Plan.
"Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project Area.
"Project Area" means the geographic area of the Redevelopment Project Area.
"School District" means Independent School District No. 194, Minnesota.
"State" means the State of Minnesota.
"TIF Act" means Minnesota Statutes, Sections 469.174 through 469.1794, both inclusive.
"TIF District" means Tax Increment Financing (Economic Development) District No. 24.
"TIF Plan" means the tax increment financing plan for the TIF District (this document).
Section B Statutory Authorization
See Section I.D. of the Redevelopment Plan for the Redevelopment Project Area.
Section C Statement of Need and Public Purpose
See Section I.A and I.B of the Redevelopment Plan for the Redevelopment Project Area.
Section D Statement of Objectives
See Section II.A of the Redevelopment Plan for the Redevelopment Project Area.
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 6
Section E Designation of Tax Increment Financing District as an
Economic Development District
Economic development districts are a type of tax increment financing district which consist of any project, or portions
of a project, which the City 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;
(2) it will result in increased employment in the state;
(3) it will result in preservation and enhancement of the tax base of the state; or
(4) it satisfies the requirements of a workforce housing project.
The TIF District qualifies as an economic development district in that the proposed development described in this TIF
Plan (see Section I) meets the criteria listed above in (1), (2) and (3). Without establishment of the TIF District, the
proposed development would not occur within the City. The proposed development will also result in increased
employment and enhancement of the tax base in both the City and the State.
Tax increments from an economic development district must be used to provide improvements, loans, subsidies,
grants, interest rate subsidies, or other assistance in which at least 85% of the square footage of the facilities to be
constructed are used for any of the following purposes:
(1) manufacturing or production of tangible personal property, including processing resulting in the
change of the 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 (1) or (2) above;
(4) telemarketing if that activity is the exclusive use of the property;
(5) tourism facilities (see M.S. Section 469.174, Subd. 23);
(6) space necessary for and related to the activities listed in (1) through (5) above; or
(7) a workforce housing project that satisfies the requirements.
In addition, the authority may request inclusion in the tax increment financing district and the county auditor may
certify the original tax capacity of a parcel or a part of a parcel that qualified under the provisions of section 273.111,
273.112, 273.114, or chapter 473H for taxes payable in any of the five calendar years before the filing of the request
for certification only for:
(1) a district in which 85 percent or more of the planned buildings and facilities (determined on the basis of
square footage) are a qualified manufacturing facility or a qualified distribution facility or a combination of both; or
(2) a housing district.
A distribution facility means buildings and other improvements to real property that are used to conduct activities in at
least each of the following categories:
(i) to store or warehouse tangible personal property;
(ii) to take orders for shipment, mailing, or delivery;
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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(iii) to prepare personal property for shipment, mailing, or delivery; and
(iv) to ship, mail, or deliver property.
A manufacturing facility includes space used for manufacturing or producing tangible personal property, including
processing resulting in the change in condition of the property, and space necessary for and related to the
manufacturing activities.
To be a qualified facility, the owner or operator of a manufacturing or distribution facility must agree to pay and pay 90
percent or more of the employees of the facility at a rate equal to or greater than 160 percent of the federal minimum
wage for individuals over the age of 20.
Section F Duration of the TIF District
Economic development districts may remain in existence 8 years from the date of receipt by the City of the first tax
increment. The City anticipates that the TIF District will remain in existence the maximum duration allowed by law
(projected to be through the year 2029, assuming first increment is received in 2021). The district will remain open
through the year 2030 if the first collection of increment is in taxes payable 2022. The City may decertify the TIF
District earlier if fulfillment of all District obligations occurs prior to the statutory maximum duration of 9 total years.
Section G Property to be Included in the TIF District
The TIF District is an approximate 8-acre area of land located within the Project Area. A map showing the location of
the TIF District is shown in Exhibit I. The boundaries and area encompassed by the TIF District are described below:
Parcel ID Number Legal Description
22-375100-00-40 That part of the Southeast Quarter of Section 31, Township 114, Range 20, and Outlot
C and Outlot D, INTERSTATE SOUTH LOGISTICS PARK, according to the recorded
plat thereof, Dakota County, Minnesota, described as follows:
Commencing at the northwest corner of said Outlot C; thence South 89 degrees 59
minutes 25 seconds East, along the north line of said Outlot C, a distance of 88.42 feet
to the point of beginning; thence South 23 degrees 29 minutes 24 seconds West a
distance of 447.46 feet; thence South 66 degrees 30 minutes 36 seconds East a
distance of 618.78 feet to the southwesterly extension of the southeasterly line of said
Outlot D; thence North 23 degrees 31 minutes 55 seconds East, along said
southeasterly line and its extension, a distance of 663.14 feet to the northeast corner
of said Outlot D; thence northwesterly and westerly along the north line of said Outlot
D and the south line of 217th Street West, as dedicated on said plat, and the north line
of said Outlot C, to the point of beginning.
22-03100-75-011
* the parcel id numbers listed above are the current ones for the property. Following replatting with approximately 8
acres included within the boundaries of the TIF District, a new parcel id number will be assigned. The legal
description is current for the properties and is anticipated to be updated following replatting. It is anticipated that the
City Council will approve the final plat prior to requesting certification of the TIF District with a new parcel id and legal
description.
Section H Property to be Acquired in the TIF District
The City may acquire and sell any or all of the property located within the TIF District; however, the City does not
anticipate acquiring any such property at this time. »
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 8
Section I Specific Development Expected to Occur Within the TIF District
The proposed development is expected to consist of an approximate 100,000 square foot build-to-suit facility to be
used primarily for manufacturing with some warehouse and space located on approximately 8 acres. The building will
be constructed with load bearing precast concrete, anodized aluminum and insulated glass storefront and window
system. The building will include 5 dock doors, ten tractor trailer parking spaces, and 220 auto parking stalls spaces
for employees. The facility and site will have the possibility for future expansion.
This project will accommodate QA1 Precision Products Inc.’s relocation from Airlake Industrial Park in Lakeville of
where they currently occupy two buildings. The project will result in the retention of 95 Lakeville jobs with an average
wage of $51,000, excluding benefits and the creation of 44 full time assembly, welding, engineering, IT, material
handling, customer service, tech support and office jobs over five years. Average starting wages per employee are
estimated to be $40,600 per year, not including benefits.
Construction of the facility is projected to commence in 2019 and expected to be fully constructed by December 31,
2019 and be 100% assessed and on the tax rolls as of January 2, 2020 for taxes payable in 2021.
At the time this document was prepared there were no signed construction contracts with regards to the above
described development.
Section J Findings and Need for Tax Increment Financing
In establishing the TIF District, the City makes the following findings:
(1) The TIF District qualifies as an economic development district;
See Section E of this document for the reasons and facts supporting this finding.
(2) The proposed development, in the opinion of the City, would not reasonably be expected to occur solely
through private investment within the reasonably foreseeable future, and the increased market value of
the site that could reasonably be expected to occur without the use of tax increment would be less than
the increase in market value estimated to result from the proposed development after subtracting the
present value of the projected tax increments for the maximum duration of the TIF District permitted by
the TIF Plan.
Factual basis:
Proposed development not expected to occur:
The project includes the development of an approximate 100,000 square foot industrial building. The
proposed developer of the site has submitted information to the city demonstrating that the development of
this site is not financially feasible without the assistance provided in this TIF Plan.
The City has determined that the proposed development would not occur but for the financial assistance
provided in this TIF Plan because of the high cost of construction at the site due to the need for significant
site development and public improvement infrastructure costs necessary for development to occur. Due to
the high costs of investment for the proposed project, including site improvements, infrastructure, machinery
& equipment, labor, real estate taxes, and development costs incurred by the developer in conjunction with
development of the project, the developer has stated that the project as proposed would not occur in the City
without the financial assistance provided by the City, as it would not be economically feasible without
financial assistance. The City finds the use of tax increment necessary to finance a portion of the site
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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improvements costs to facilitate development of the project and developer investment. The City anticipates
providing financial assistance on a pay-as-you-go basis.
No higher market value expected:
The increased market value of the site that could reasonably be expected to occur without the use of tax
increment financing would be less than the increase in market value estimated to result from the proposed
development after subtracting the present value of the projected tax increments for the maximum duration of
the TIF District permitted by the TIF Plan. Without improvements the City has no reason to expect that
significant development would occur without assistance similar to that provided in this plan. For the same
reasons that the desired development described above is not feasible without tax increment assistance, the
City believes that no alternative development is likely to occur without similar assistance.
To summarize the basis for the City’s findings regarding alternative market value, in accordance with
Minnesota Statutes, Section 469.175, Subd. 3(d), the City makes the following determinations:
a. The City’s estimate of the amount by which the market value of the site will increase without the
use of tax increment financing is $0 (for the reasons described above), except some unknown
amount of appreciation.
b. If the proposed development to be assisted with tax increment occurs in the District, the
total increase in market value would be approximately $7,450,837, including the value of the
building (See Exhibit V).
c. The present value of tax increments from the District for the maximum duration of the
district permitted by the TIF Plan is estimated to be $555,794 (See Exhibit V).
d. Even if some development other than the proposed development were to occur, the City
finds that no alternative would occur that would produce a market value increase greater than
$6,895,043 (the amount in clause b less the amount in clause c) without tax increment assistance.
(3) The TIF Plan would afford maximum opportunity, consistent with the sound needs of the City as a
whole, for development of the Project Area by private enterprise.
Factual basis: The proposed development is the construction of a new industrial facility in the District that
is proposed to retain and create new jobs within the City, while also retaining and creating these jobs in the
State, plus create new tax base for the City and the State. The development meets the City’s economic
development goals in terms of tax base expansion, job retention and creation, and wage levels.
(4) The TIF Plan conforms to general plans for development of the City as a whole.
Factual basis: The City has determined that the development as described in the TIF Plan conforms to the
City comprehensive plan.
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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Section K Estimated Public Costs
The estimated public costs of the TIF District are listed below. Such costs are eligible for reimbursement from tax
increments of the TIF District.
Acquisition, site improvements, utilities, and
other qualifying improvements $697,897
Administrative expenses $36,731
Subtotal $734,628
Interest expenses $0
Total $734,628
The City anticipates using tax increment to the extent available to assist with financing a portion of the site
improvement and infrastructure costs, related administrative expenses, and other TIF-eligible expenditures as
necessary and related to development of the project.
The City reserves the right to administratively adjust the amount of any of the items listed above or to incorporate
additional eligible items, so long as the total estimated public cost ($734,628) is not increased. The City also reserves
the right to fund any of the identified costs with any other legally available revenues, such as grants and/or loans, but
anticipates that such costs will be primarily financed with tax increments.
Section L Estimated Sources of Revenue
Tax increment revenue $734,628
Interest and investment earnings 0
Sales/lease proceeds 0
TIF Credits 0
Total $734,628
The City anticipates providing financial assistance on a pay-as-you-go basis for extraordinary site improvement costs,
as well as other TIF-eligible expenses related to the proposed development. As tax increments are collected from the
TIF District in future years, a portion of these taxes will be used by the City to reimburse the developer/owner for
public costs incurred (see Section K).
The City reserves the right to finance any or all public costs of the TIF District using pay-as-you-go assistance,
internal funding, general obligation or revenue debt, or any other financing mechanism authorized by law. The City
also reserves the right to use other sources of revenue legally applicable to the Project Area to pay for such costs
including, but not limited to, special assessments, utility revenues, federal or state funds, and investment income.
The projected tax increment report is included as Exhibit III.
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 11
Section M Estimated Amount of Bonded Indebtedness
The maximum principal amount of bonds (as defined in the TIF Act) secured in whole or part with tax increment from
the TIF District is $734,628. The City currently plans to finance the improvement costs in the form of a pay-as-you go
revenue note but reserves the right to issue bonds in any form, including without limitation any interfund loan with
interest not to exceed the maximum permitted under Section 469.178, subd. 7 of the TIF Act.
Section N Original Net Tax Capacity
The County Auditor shall certify the original net tax capacity of the TIF District. This value will be equal to the total net
tax capacity of all property in the TIF District as certified by the State Commissioner of Revenue. For districts certified
between January 1 and June 30, inclusive, this value is based on the previous assessment year. For districts
certified between July 1 and December 31, inclusive, this value is based on the current assessment year.
The Estimated Taxable Value of all property within the TIF District as of January 2, 2018, for taxes payable in 2019, is
$149,738 and the estimated tax capacity is $2,247, which is estimated to be the original net tax capacity of the TIF
District upon establishment of the District, replatting of the property to include a portion within the District,
reclassification from non-homestead to commercial-industrial and subsequent certification.
Each year the County Auditor shall certify the amount that the original net tax capacity has increased or decreased as
a result of:
(1) changes in the tax-exempt status of property;
(2) reductions or enlargements of the geographic area of the TIF District;
(3) changes due to stipulation agreements or abatements; or
(4) changes in property classification rates.
Section O Original Tax Capacity Rate
The County Auditor shall also certify the original tax capacity rate of the TIF District. This rate shall be the sum of all
local tax rates that apply to property in the TIF District. This rate shall be for the same taxes payable year as the
original net tax capacity.
In future years, the amount of tax increment generated by the TIF District will be calculated using the lesser of (a) the
sum of the current local tax rates at that time or (b) the original tax capacity rate of the TIF District.
For purposes of estimating the tax increment generated by the TIF District, the sum of the proposed local tax rates for
taxes levied in 2018 and payable in 2019 is 98.012% as shown below. The request for certification will be made prior
to June 30, 2019, as a result the original local tax capacity rate will be the rate that applies for taxes payable in 2019
and the County Auditor shall certify this amount as the original tax capacity rate of the TIF District. For the purposes
of this TIF Plan, the proposed pay 2019 rates are used, since final pay 2019 are not yet available at the time of
drafting of the TIF Plan.
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 12
2018/2019
Taxing Jurisdiction Proposed Local Tax Rate
City of Lakeville 35.939%
Dakota County 25.364%
ISD #194 32.486%
Other 4.223%
Total 98.012%
Section P Projected Retained Captured Net Tax Capacity and
Projected Tax Increment
The City anticipates that the project will begin construction in 2019 and be fully completed by December 31, 2019,
creating a total tax capacity for TIF District No. 24 of $119,250 as of January 2, 2020. The captured tax capacity as
of that date is estimated to be $73,830. The first year of tax increment is estimated to be $72,363 payable in 2021. A
complete schedule of estimated tax increment from the TIF District is shown in Exhibit III.
The estimates shown in this TIF plan assume that commercial class rates remain at 1.5% of the estimated market
value up to $150,000 and 2.0% of the estimated market value over $150,000 and assume 3% annual increases in
market values.
Each year the County Auditor shall determine the current net tax capacity of all property in the TIF District. To the
extent that this total exceeds the original net tax capacity, the difference shall be known as the captured net tax
capacity of the TIF District.
The County Auditor shall certify to the City the amount of captured net tax capacity each year. The City may choose
to retain any or all of this amount. It is the City's intention to retain 100% of the captured net tax capacity of the TIF
District. Such amount shall be known as the retained captured net tax capacity of the TIF District.
Exhibit II gives a listing of the various information and assumptions used in preparing a number of the exhibits
contained in this TIF Plan, including Exhibit III which shows the projected tax increment generated over the
anticipated life of the TIF District.
Section Q Use of Tax Increment
Each year the County Treasurer shall deduct 0.36% of the annual tax increment generated by the TIF District and pay
such amount to the State's General Fund. Such amounts will be appropriated to the State Auditor for the cost of
financial reporting and auditing of tax increment financing information throughout the state. Exhibit III shows the
projected deduction for this purpose over the anticipated life of the TIF District.
The City has determined that it will use 100% of the remaining tax increment generated by the TIF District for any of
the following purposes:
(1) pay for the estimated public costs of the TIF District (see Section K) and County administrative
costs associated with the TIF District (see Section T);
(2) pay principal and interest on one or more pay-as-you-go notes, tax increment bonds or other bonds
issued to finance the estimated public costs of the TIF District;
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 13
(3) accumulate a reserve securing the payment of tax increment bonds or other bonds issued to
finance the estimated public costs of the TIF District;
(4) pay all or a portion of the county road costs as may be required by the County Board under M.S.
Section 469.175, Subdivision 1a; or
(5) return excess tax increments to the County Auditor for redistribution to the City, County and School
District.
Tax increments from property located in one county must be expended for the direct and primary benefit of a project
located within that county, unless both county boards involved waive this requirement. Tax increments shall not be
used to circumvent levy limitations applicable to the City.
Tax increment shall not be used to finance the acquisition, construction, renovation, operation, or maintenance of a
building to be used primarily and regularly for conducting the business of a municipality, county, school district, or any
other local unit of government or the State or federal government, or for a commons area used as a public park, or a
facility used for social, recreational, or conference purposes. This prohibition does not apply to the construction or
renovation of a parking structure or of a privately-owned facility for conference purposes.
If there exists any type of agreement or arrangement providing for the developer, or other beneficiary of assistance, to
repay all or a portion of the assistance that was paid or financed with tax increments, such payments shall be subject
to all the restrictions imposed on the use of tax increments. Assistance includes sale of property at less than the cost
of acquisition or fair market value, grants, ground or other leases at less then fair market rent, interest rate subsidies,
utility service connections, roads, or other similar assistance that would otherwise be paid for by the developer or
beneficiary.
Section R Excess Tax Increment
In any year in which the tax increments from the TIF District exceed the amount necessary to pay the estimated
public costs authorized by the TIF Plan, the City shall use the excess tax increments to:
(1) prepay any outstanding tax increment bonds;
(2) discharge the pledge of tax increments thereof;
(3) pay amounts into an escrow account dedicated to the payment of the tax increment bonds; or
(4) return excess tax increments to the County Auditor for redistribution to the City, County and School
District. The County Auditor must report to the Commissioner of Education the amount of any
excess tax increment redistributed to the School District within 30 days of such redistribution.
Section S Tax Increment Pooling and the Five-Year Rule
At least 80% of the tax increments from the TIF District must be expended on activities within the district or to pay for
bonds used to finance the estimated public costs of the TIF District (see Section E for additional restrictions). No
more than 20% of the tax increments may be spent on costs outside of the TIF District but within the boundaries of
the Project Area, except to pay debt service on credit enhanced bonds. All administrative expenses are considered to
have been spent outside of the TIF District. Tax increments are considered to have been spent within the TIF District
if such amounts are:
(1) actually paid to a third party for activities performed within the TIF District within five years after
certification of the district;
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 14
(2) used to pay bonds that were issued and sold to a third party, the proceeds of which are reasonably
expected on the date of issuance to be spent within the later of the five-year period or a reasonable
temporary period or are deposited in a reasonably required reserve or replacement fund.
(3) used to make payments or reimbursements to a third party under binding contracts for activities
performed within the TIF District, which were entered into within five years after certification of the
district; or
(4) used to reimburse a party for payment of eligible costs (including interest) incurred within five years
from certification of the district.
Beginning with the sixth year following certification of the TIF District, at least 80% of the tax increments must be used
to pay outstanding bonds or make contractual payments obligated within the first five years. When outstanding bonds
have been defeased and sufficient money has been set aside to pay for such contractual obligations, the TIF District
must be decertified.
The City anticipates there may be allowable pooling expenditures made outside of the TIF District and within the
Project Area (along with allowable administrative expenses), and such expenditures are expressly authorized in this
TIF Plan.
Section T Limitation on Administrative Expenses
Administrative expenses are defined as all costs of the City other than:
(1) amounts paid for the purchase of land;
(2) amounts paid for materials and services, including architectural and engineering services directly
connected with the physical development of the real property in the project;
(3) relocation benefits paid to, or services provided for, persons residing, or businesses located in the
project;
(4) amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to section 469.178; or
(5) amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clause (1) to (3).
Administrative expenses include amounts paid for services provided by bond counsel, fiscal consultants, planning or
economic development consultants, and actual costs incurred by the County in administering the TIF District. Tax
increments may be used to pay administrative expenses of the TIF District up to the lesser of (a) 10% of the total tax
increment expenditures authorized by the TIF Plan or (b) 10% of the total tax increments received by the TIF District.
Section U Limitation on Property Not Subject to Improvements - Four Year Rule
If after four years from certification of the TIF District no demolition, rehabilitation, renovation, or qualified
improvement of an adjacent street has commenced on a parcel located within the TIF District, then that parcel shall
be excluded from the TIF District and the original net tax capacity shall be adjusted accordingly. Qualified
improvements of a street are limited to construction or opening of a new street, relocation of a street, or substantial
reconstruction or rebuilding of an existing street. The City must submit to the County Auditor, by February 1 of the
fifth year, evidence that the required activity has taken place for each parcel in the TIF District.
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
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If a parcel is excluded from the TIF District and the City or owner of the parcel subsequently commences any of the
above activities, the City shall certify to the County Auditor that such activity has commenced, and the parcel shall
once again be included in the TIF District. The County Auditor shall certify the net tax capacity of the parcel, as most
recently certified by the Commissioner of Revenue, and add such amount to the original net tax capacity of the TIF
District.
Section V Estimated Impact on Other Taxing Jurisdictions
Exhibit IV shows the estimated impact on other taxing jurisdictions if the maximum projected retained captured net tax
capacity of the TIF District was hypothetically available to the other taxing jurisdictions. The City believes that there
will be no adverse impact on other taxing jurisdictions during the life of the TIF District, since the proposed
development would not have occurred without the establishment of the TIF District and the provision of public
assistance. A positive impact on other taxing jurisdictions will occur when the TIF District is decertified and the
development therein becomes part of the general tax base.
The fiscal and economic implications of the proposed tax increment financing district, as pursuant to Minnesota
Statutes, Section 469.175, Subdivision 2, are listed below.
1. The total amount of tax increment that will be generated over the life of the district is estimated to be
$737,283.
2. To the extent the facility in the proposed TIF District generates any public cost impacts on city-provided
services such as police and fire protection, public infrastructure, and borrowing costs attributable to the
district, such costs will be levied upon the taxable net tax capacity of the City, excluding that portion captured
by the District. The City does not anticipate issuing tax increment revenue bonds in conjunction with this
project but reserves the right to issue bonds as necessary to facilitate development.
3. 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
estimated to be $244,372.
4. 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
estimated to be $190,797.
5. The amount of tax increments over the life of the district that would be attributable to city levies, assuming
the city’s share of the total local tax rate for all taxing jurisdictions remained the same is estimated to be
$270,346.
6. No additional information has been requested by the county or school district that would enable it to
determine additional costs that will accrue to it due to the development proposed for the district.
Section W Prior Planned Improvements
The City shall accompany its request for certification to the County Auditor (or notice of district enlargement), with a
listing of all properties within the TIF District for which building permits have been issued during the 18 months
immediately preceding approval of the TIF Plan. The County Auditor shall increase the original net tax capacity of the
TIF District by the net tax capacity of each improvement for which a building permit was issued.
There have been no building permits issued in the last 18 months in conjunction with any of the properties within the
TIF District.
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 16
Section X Development Agreements
If within a project containing an economic development district, more than 10% of the acreage of the property to be
acquired by the City is purchased with tax increment bonds proceeds (to which tax increment from the property is
pledged), then prior to such acquisition, the City must enter into an agreement for the development of the property.
Such agreement must provide recourse for the City should the development not be completed.
The City anticipates entering into an agreement for development but does not anticipate acquiring any property
located within the TIF District.
Section Y Assessment Agreements
The City may, upon entering into a development agreement, also enter into an assessment agreement with the
developer, which establishes a minimum market value of the land and improvements for each year during the life of
the TIF District.
The assessment agreement shall be presented to the County or City Assessor who shall review the plans and
specifications for the improvements to be constructed, review the market value previously assigned to the land, and
so long as the minimum market value contained in the assessment agreement appears to be an accurate estimate,
shall certify the assessment agreement as reasonable. The assessment agreement shall be filed for record in the
office of the County Recorder of each county where the property is located. Any modification or premature
termination of this agreement must first be approved by the City, County and School District.
The City does not anticipate entering into an assessment agreement to establish a minimum market value of the land
and improvements within the TIF District.
Section Z Modifications of the Tax Increment Financing Plan
Any reduction or enlargement in the geographic area of the Project Area or the TIF District; increase in the amount of
bonded indebtedness to be incurred; increase in the amount of capitalized interest; increase in that portion of the
captured net tax capacity to be retained by the City; increase in the total estimated public costs; or designation of
additional property to be acquired by the City shall be approved only after satisfying all the necessary requirements
for approval of the original TIF Plan. This paragraph does not apply if:
(1) the only modification is elimination of parcels from the TIF District; and
(2) the current net tax capacity of the parcels eliminated equals or exceeds the net tax capacity of
those parcels in the TIF District's original net tax capacity, or the City agrees that the TIF District's
original net tax capacity will be reduced by no more than the current net tax capacity of the parcels
eliminated.
The City must notify the County Auditor of any modification that reduces or enlarges the geographic area of the TIF
District. The geographic area of the TIF District may be reduced but not enlarged after five years following the date of
certification.
Section AA Administration of the Tax Increment Financing Plan
Upon adoption of the TIF Plan, the City shall submit a copy of such plan to the Minnesota Department of Revenue.
The City shall also request that the County Auditor certify the original net tax capacity and net tax capacity rate of the
TIF District. To assist the County Auditor in this process, the City shall submit copies of the TIF Plan, the resolution
Housing and Redevelopment Authority for the City of Lakeville and City of
Lakeville, Minnesota
SPRINGSTED Page 17
establishing the TIF District and adopting the TIF Plan, and a listing of any prior planned improvements. The City
shall also send the County Assessor any assessment agreement establishing the minimum market value of land and
improvements in the TIF District and shall request that the County Assessor review and certify this assessment
agreement as reasonable.
The County shall distribute to the City the amount of tax increment as it becomes available. The amount of tax
increment in any year represents the applicable property taxes generated by the retained captured net tax capacity of
the TIF District. The amount of tax increment may change due to development anticipated by the TIF Plan, other
development, inflation of property values, or changes in property classification rates or formulas. In administering and
implementing the TIF Plan, the following actions should occur on an annual basis:
(1) prior to July 1, the City shall notify the County Assessor of any new development that has occurred
in the TIF District during the past year to ensure that the new value will be recorded in a timely
manner.
(2) if the County Auditor receives the request for certification of a new TIF District, or for modification of
an existing TIF District, before July 1, the request shall be recognized in determining local tax rates
for the current and subsequent levy years. Requests received on or after July 1 shall be used to
determine local tax rates in subsequent years.
(3) each year the County Auditor shall certify the amount of the original net tax capacity of the TIF
District. The amount certified shall reflect any changes that occur as a result of the following:
(a) the value of property that changes from tax-exempt to taxable shall be added to the
original net tax capacity of the TIF District. The reverse shall also apply;
(b) the original net tax capacity may be modified by any approved enlargement or reduction of
the TIF District;
(c) if laws governing the classification of real property cause changes to the percentage of
estimated market value to be applied for property tax purposes, then the resulting increase
or decrease in net tax capacity shall be applied proportionately to the original net tax
capacity and the retained captured net tax capacity of the TIF District.
The County Auditor shall notify the City of all changes made to the original net tax capacity of the TIF District.
Section AB Filing TIF Plan, Financial Reporting and Disclosure Requirements
The City will file the TIF Plan, and any subsequent amendments thereto, with the Commissioner of Revenue and the
Office of the State Auditor pursuant to Minnesota Statutes, Section 469.175, subdivision 4A. The City will comply
with all reporting requirements for the TIF District under Minnesota Statutes, Section 469.175, subdivisions 5 and 6.
Exhibit I SPRINGSTED Page 18 Map of Tax Increment Financing (Economic Development) District No. 24 Within Airlake Redevelopment Project No. 1
Exhibit II
SPRINGSTED Page 19
Assumptions Report
City of Lakeville, Minnesota
Tax Increment Financing (Economic Development) District No. 24
QA1 Precision Products, Inc. Project
Draft TIF Plan Exhibits: $6.0M Taxable Value with 3% MV inflator
Type of Tax Increment Financing District Economic Development
Maximum Duration of TIF District 8 years from 1st increment
Projected Certification Request Date 12/30/19
Decertification Date 12/31/29 (9 Years of Increment)
2019/2020
Base Estimated Market Value * $149,783
Original Net Tax Capacity * $2,247
Assessment/Collection Year
2019/2020 2020/2021 2021/2022 2022/2023
Base Estimated Market Value $149,783 $149,783 $149,783 $149,783
Increase in Estimated Market Value 0 5,850,217 6,030,217 6,215,617
Total Estimated Market Value 149,783 6,000,000 6,180,000 6,365,400
Total Net Tax Capacity $2,247 $119,250 $122,850 $126,558
City of Lakeville 35.939%
Dakota County 25.364%
ISD #194 32.486%
Other 4.223%
Local Tax Capacity Rate 98.012% 2018/2019 (Proposed)
Fiscal Disparities Contribution From TIF District 36.8992%
Administrative Retainage Percent (maximum = 10%) 5.00%
Pooling Percent 0.00%
Bonds PayGo Loan
Bonds Dated NA Loan Dated
Bond Issue @ 0.00% (NIC) NA Loan Rate
Eligible Project Costs NA Loan Amount
Present Value Date & Rate 02/01/19 5.00% Present Value Amount $555,794
Notes
Assumptions assume no change to future tax rates, class rates, and a 3% annual MV inflator is assumed
Calculations include payable 2019 proposed tax capacity rates
Total EMV upon completion based on County Assessor review
* Base EMV of properties as provided by City staff
Exhibit III SPRINGSTED Page 20 Projected Tax Increment ReportCity of Lakeville, MinnesotaTax Increment Financing (Economic Development) District No. 24QA1 Precision Products, Inc. ProjectDraft TIF Plan Exhibits: $6.0M Taxable Value with 3% MV inflatorLess: Less: Retained Times: Less: Less:Annual Total Total Original Fiscal Captured Tax Annual State Aud. Subtotal Admin. AnnualPeriod Estimated Net Tax Net Tax Disp. @ Net Tax Capacity Gross Tax Deduction Net Tax Retainage NetEnding Market Value (1)Capacity (2)Capacity (3)36.8992% Capacity Rate (4)Increment 0.360% Increment 5.00% Revenue(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)12/31/19149,7832,2472,2470098.012%0000012/31/20149,7832,2472,2470098.012%0000012/31/21 6,000,000 119,250 2,247 43,173 73,830 98.012% 72,363 261 72,102 3,605 68,49712/31/22 6,180,000 122,850 2,247 44,502 76,101 98.012% 74,588 269 74,319 3,716 70,60312/31/23 6,365,400 126,558 2,247 45,870 78,441 98.012% 76,882 277 76,605 3,830 72,77512/31/24 6,556,362 130,377 2,247 47,279 80,851 98.012% 79,244 285 78,959 3,948 75,01112/31/25 6,753,053 134,311 2,247 48,731 83,333 98.012% 81,677 294 81,383 4,069 77,31412/31/26 6,955,644 138,363 2,247 50,226 85,890 98.012% 84,183 303 83,880 4,194 79,68612/31/27 7,164,314 142,536 2,247 51,766 88,524 98.012% 86,764 312 86,452 4,323 82,12912/31/28 7,379,243 146,835 2,247 53,352 91,236 98.012% 89,422 322 89,100 4,455 84,64512/31/29 7,600,620 151,262 2,247 54,986 94,030 98.012% 92,160 332 91,828 4,591 87,237$737,283 $2,655 $734,628 $36,731 $697,897(1) value based on estimate provided by County assessor with 3% annual market value inflator(2) tax capacity based on commercial-industrial class rate of 1.50% for first $150,000 of value and 2% for value above $150,000(3) original net tax capacity will be based on existing land values and commercial-industrial class rate for proposed payable 2019(4) combined local tax capacity rate of City of Lakeville, ISD 194 and Dakota County for proposed payable 2019
Exhibit IV SPRINGSTED Page 21 Estimated Impact on Other Taxing Jurisdictions ReportCity of Lakeville, MinnesotaTax Increment Financing (Economic Development) District No. 24QA1 Precision Products, Inc. ProjectDraft TIF Plan Exhibits: $6.0M Taxable Value with 3% MV inflatorWithoutProject or TIF District With Project and TIF DistrictProjected Hypothetical2018/2019 2018/2019 Retained New Hypothetical Hypothetical Tax GeneratedTaxable 2018/2019 Taxable Captured Taxable Adjusted Decrease In by RetainedTaxing Net Tax Local Net Tax Net Tax Net Tax Local Local CapturedJurisdiction Capacity (1) Tax Rate Capacity (1) + Capacity = Capacity Tax Rate (*) Tax Rate (*) N.T.C. (*)City of Lakeville 75,888,455 35.939% 75,888,455 $94,030 75,982,485 35.895% 0.044% 33,752Dakota County 492,217,968 25.364% 492,217,968 94,030 492,311,998 25.359% 0.005% 23,845ISD #194 64,050,129 32.486% 64,050,129 94,030 64,144,159 32.438% 0.048% 30,502Other (2) --- 4.223% --- 94,030 --- 4.223% --- --- Totals 98.012% 97.915% 0.097% * Statement 1: If the projected Retained Captured Net Tax Capacity of the TIF District was hypothetically available to each ofthe taxing jurisdictions above, the result would be a lower local tax rate (see Hypothetical Adjusted Tax Rate above)which would produce the same amount of taxes for each taxing jurisdiction. In such a case, the total local tax ratewould decrease by 0.097% (see Hypothetical Decrease in Local Tax Rate above). The hypothetical tax that theRetained Captured Net Tax Capacity of the TIF District would generate is also shown above.Statement 2: Since the projected Retained Captured Net Tax Capacity of the TIF District is not available to the taxing jurisdictions,then there is no impact on taxes levied or local tax rates. (1) Taxable net tax capacity = total net tax capacity - captured TIF - fiscal disparity contribution, if applicable. (2) The impact on these taxing jurisdictions is negligible since they represent only 4.31% of the total tax rate.
Exhibit V
SPRINGSTED Page 22
Market Value Analysis Report
City of Lakeville, Minnesota
Tax Increment Financing (Economic Development) District No. 24
QA1 Precision Products, Inc. Project
Draft TIF Plan Exhibits: $6.0M Taxable Value with 3% MV inflator
Assumptions
Present Value Date 12/30/19
P.V. Rate - Gross T.I. 5.00%
Increase in EMV With TIF District $7,450,837
Less: P.V of Gross Tax Increment 555,794
Subtotal $6,895,043
Less: Increase in EMV Without TIF 0
Difference $6,895,043
Annual Present
Gross Tax Value @
Year Increment 5.00%
1 2021 72,363 66,432
2 2022 74,588 65,214
3 2023 76,882 64,019
4 2024 79,244 62,843
5 2025 81,677 61,688
6 2026 84,183 60,553
7 2027 86,764 59,438
8 2028 89,422 58,342
9 2029 92,160 57,265
$737,283 $555,794