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HomeMy WebLinkAbout18. 21-512 OCTOBER 12, 2021 21-512 RESOLUTION (CARRIED__6-0_____LOST________LAID OVER________WITHDRAWN________) PURPOSE: APPROVE TAX INCREMENT DISTRICT NO. 41 PROJECT PLAN; DESIGNATE TAX INCREMENT DISTRICT NO. 41 BOUNDARIES; CREATE TAX INCREMENT DISTRICT NO. 41 SMITH SCHOOL REDEVELOPMENT INITIATED BY: CITY ADMINISTRATION PLAN COMMISSION RECOMMENDATION: Approved WHEREAS, the City of Oshkosh (the “City”) has determined that use of Tax Incremental Financing is required to promote development and redevelopment within the City; and WHEREAS, Tax Increment District No. 41 (the “District”) is proposed to be created by the City as district in need of rehabilitation or conservation in accordance with the provisions of Wisconsin Statutes Section 66.1105 (the "Tax Increment Law"); and WHEREAS, a Project Plan for the District has been prepared that includes: a. A statement listing the kind, number and location of all proposed public works or improvements within the District, or to the extent provided in Wisconsin Statutes Sections 66.1105(2)(k) and 66.1105(4)(gm), outside of the District; b. An economic feasibility study; c. A detailed list of estimated project costs; d. A description of the methods of financing all estimated project costs and the time when the related costs or monetary obligations are to be incurred; e. A map showing existing uses and conditions of real property in the District; f. A map showing proposed improvements and uses in the District; g. Proposed changes of zoning ordinances, master plan, map, building codes and City ordinances; h. A list of estimated non-project costs; i. A statement of the proposed plan for relocation of any persons to be displaced; j. A statement indicating how the District promotes the orderly development of the City; OCTOBER 12, 2021 21-512 RESOLUTION CONT’D k. An opinion of the City Attorney or of an attorney retained by the City advising that the plan is complete and complies with Wisconsin Statutes Section 66.1105(4)(f); and WHEREAS, prior to its publication, a copy of the notice of public hearing was sent to owners of all property in the proposed district, to the chief executive officers of Winnebago County, the Oshkosh Area School District, and the Fox Valley Technical College District, and any other entities having the power to levy taxes on property located within the District, in accordance with the procedures specified in the Tax Increment Law; and WHEREAS, in accordance with the procedures specified in the Tax Increment Law, the Plan Commission, on September 21, 2021 held a public hearing concerning the project plan and boundaries and proposed creation of the District, providing interested parties a reasonable opportunity to express their views thereon; and WHEREAS, after said public hearing, the Plan Commission designated the boundaries of the District, adopted the Project Plan, and recommended to the Common Council that it create such District and approve the Project Plan. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Oshkosh that: 1. The boundaries of the District shall be named "City of Oshkosh Tax Increment District No. 41, Smith School Redevelopment", are hereby established as specified in Exhibit A of this Resolution. 2. The District is created effective as of October 12, 2021. 3. The Common Council finds and declares that: (a) Not less than 50% by area of the real property within the District is in need of rehabilitation or conservation work within the meaning of Wisconsin Statutes Section 66.1337(2m)(a). OCTOBER 12, 2021 21-512 RESOLUTION CONT’D (b) Based upon the findings, as stated in 3(a) above, the District is declared to be a District in need of rehabilitation or conservation based on the identification and classification of the property included within the District. (c) The improvement of such area is likely to enhance significantly the value of substantially all of the other real property in the District. (d) The equalized value of the taxable property in the District plus the value increment of all other existing tax incremental districts within the City, does not exceed 12% of the total equalized value of taxable property within the City. (e) The City estimates that none of the territory within the District will be devoted to retail business at the end of the District’s maximum expenditure period, pursuant to Wisconsin Statutes Section 66.1105(5)(b). (f) The project costs relate directly to promoting rehabilitation or conservation of the area consistent with the purpose for which the District is created. (g) All property within TID No. 41 was within the City boundaries as of January 1, 2004. 4. The attached Project Plan for "City of Oshkosh Tax Increment District No. 41, Smith School Redevelopment" is hereby approved, and the City further finds the Plan is feasible and in conformity with the master plan of the City. BE IT FURTHER RESOLVED that the Common Council of the City of Oshkosh hereby approves creation of Tax Incremental Financing District No. 41 Smith School Redevelopment. “Exhibit A” TID 41 Smith School Redevelopment Legal Description LEGAL DESCRIPTION FOR TAX INCREMENT DISTRICT 41, SMITH SCHOOL REDEVELOPMENT ALL OF LOTS 5 AND 6 AND PART OF LOTS 4, 17 AND 18, JOHN SMITH’S ADDITION AS RECORDED IN VOLUME 2, PAGE 10, WINNEBAGO COUNTY REGISTER OF DEEDS LOCATED IN THE NORTHEAST ¼ OF THE SOUTHEAST ¼ OF SECTION 26, TOWNSHIP 18 NORTH, RANGE 16 EAST, 14TH WARD, CITY OF OSHKOSH, WINNEBAGO COUNTY, WISCONSIN, BOUNDED AND DESCRIBED AS FOLLOWS: COMMENCING FROM THE EAST ¼ CORNER OF SAID SECTION 26; THENCE S00°04’57”E, 1,297.76 FEET ALONG THE EAST LINE OF SAID SECTION 26 TO A POINT ON THE EXTENDED NORTH LINE OF W. 18TH AVENUE; THENCE N89°22’17”W, 28.00 FEET ALONG SAID EXTENDED NORTH LINE TO THE NORTHWEST CORNER OF OREGON STREET AND W. 18TH AVENUE AND POINT OF BEGINNING; THENCE CONTINUING N89°22’17”W, 286.00 FEET TO THE NORTHEAST CORNER OF W. 18TH AVENUE AND ARIZONA STREET; THENCE N00°04’57”W, 143.75 FEET ALONG THE EAST LINE OF SAID ARIZONA STREET TO A POINT; THENCE S89°22’17”E, 110.00 FEET TO A POINT ON THE WEST LINE OF LOT 6 OF JOHN SMITH’S ADDITION; THENCE N00°04’57”W, 354.00 FEET ALONG SAID WEST LINE AND WEST LINES OF LOTS 5 AND 4 OF SAID JOHN SMITH’S ADDITION TO A POINT; THENCE S89°22’17”E, 176.00 FEET TO A POINT ON THE WEST LINE OF OREGON STREET; THENCE S00°04’57”E, 497.75 FEET ALONG SAID WEST LINE TO THE POINT OF BEGINNING. SAID AREA CONTAINS 103,409 SQUARE FEET OR 2.374 ACRES, MORE OR LESS. TO: Honorable Mayor and Members of the Common Council FROM: Mark Lyons, Planning Services Manager DATE: October 7, 2021 RE: Approve Tax Increment District No. 41 Project Plan; Designate Tax Increment District No. 41 Boundaries; Create Tax Increment District No. 41 Smith School Redevelopment BACKGROUND Tax Incremental District No. 41 (the “TID” or “District”) is a proposed 2.66 acre area in need of rehabilitation or conservation comprised of the former Smith School property. The proposed district is comprised of one parcel. The District is being created as an area “in need of rehabilitation or conservation” within the meaning of Wis. Stat. 66.1337 (2m)(a) based on a finding that over 50% of the area is need of rehabilitation. The parcels identified as “in need of rehabilitation or conservation” are shown on the Existing Conditions map on page 12 of the Plan. Example of the proposed improvements can be found on page 13. The subject property contained an aged structure that has outlived its originally intended use. The proposed development scored 70 points on the City’s Conservation and Rehabilitation scoring matrix, exceeding the minimum 50 points required. ANALYSIS The applicant is proposing an adaptive reuse of the former building to an affordable apartment building. Per the submitted narrative, 31 two and three bedroom units are planned to be constructed within the building and 44 garage spaces along with additional surface parking. The property is zoned to Institutional with a Planned Development Overlay (I-PD) which is consistent with recommendations with the Comprehensive Plan for creating diverse housing options. The proposed Plan is also in line with the key discussion point of the ongoing Comprehensive Housing Study that is will be completed soon. The City is projecting an improvements value of approximately $2.05 million as a result of the redevelopment activity within the District. The applicant’s overall investment in the project is approximately $7,746,000. City Hall • 215 Church Avenue • P.O. Box 1130 • Oshkosh, WI 54903-1130 http://www.ci.oshkosh.wi.us FISCAL IMPACT The City anticipates making a total expenditure of approximately $1,647,000 to undertake the project identified in the Project Plan. Project costs include an estimated $1,482,000 in “pay as you go” development incentives and an estimated $164,000 in administrative costs. RECOMMENDATION The Plan Commission approved Tax Increment District No. 41 Project Plan and the designation of the boundaries on September 21, 2021. Respectfully Submitted, Approved: Mark Lyons Mark A. Rohloff Planning Services Manager City Manager ITEM: PUBLIC HEARING: PROPOSED CREATION OF TAX INCREMENT FINANCING DISTRICT NO. 41 SMITH SCHOOL REDEVELOPMENT DESIGNATION OF BOUNDARIES AND APPROVAL OF PROJECT PLAN Plan Commission meeting of September 21, 2021. Prior to taking action on proposed Tax Increment District (TID) No. 41 and the designation of boundaries for said TID, the Plan Commission is to hold a public hearing and take comments concerning proposed creation of TID No. 41. The public hearing is required as part of the formal review process the City must follow in the creation of any tax incremental financing district or amendment thereto. GENERAL INFORMATION Applicant: Northpointe Development Corporation Owner: Smith School Lofts LLC GENERAL DESCRIPTION/BACKGROUND Please see attached TID No. 41 Project Plan for more detailed information. Tax Incremental District No. 41 (the “TID” or “District”) is a proposed 2.66 acre in need of rehabilitation or conservation district comprising of the former Smith School property. The proposed district is comprised of one parcel. The City anticipates making total expenditures of approximately $1,647,000 to undertake project identified in the Project Plan. Project costs include an estimated $1,482,000 in “pay as you go” development incentives and an estimated $164,000 in administrative costs. The $1,482,000 development incentive has a present value of approximately $760,000 that the Developer will monetize through WHEDA at a 4.25% discount rate. The Project Plan includes a statement listing the kind, number and location of proposed improvements which starts on page 16. It contains an economic feasibility study, a detailed list of estimated project costs and timing of those costs as well as a method of financing starting on page 24. ANALYSIS The City is projecting an improvements value of approximately $2.05 million will result from redevelopment activity within the District. The applicants overall investment in the project is approximately $7,746,000. These key assumptions are identified in Section 9 of the Plan starting on page 25. The “expected” improvements will occur on the parcel located in the district and may entail the following: Use Item I: Creation of TID #40 Miles Kimball Redevelopment The applicant is proposing an adaptive reuse of the former building to an affordable apartment building. Per the submitted narrative, 31 two and three bedroom units are planned to be constructed within the building and 44 garage spaces along with additional surface parking. Finding appropriate uses for buildings of this type can be challenging as they outlive their original intended use. Table 1 on page 26 shows the development assumptions when values will be added the site. The development assumption are anticipating being able to fully develop the district by sometime in 2022. District Life Based on the Municipal Revenue Obligation (MRO) for the development incentive identified on Table 3 on Page 29 of the Plan, the district is anticipated to pay off costs by 2050 which constitutes the entire statutorily allowed 27 years. At that point the full value of the properties would be added back to the overall tax rolls which current estimate is $2.4 million. Type of District The District is being created as an area “in need of rehabilitation or conservation” within the meaning of Wis. Stat. 66.1337 (2m)(a) based on a finding that over 50% of the area is need of rehabilitation. The parcels identified as “in need of rehabilitation or conservation” are shown on the Existing Conditions map on page 12 of the Plan. Example of the proposed improvements can be found on page 13. The subject property contained an aged structure that has outlived its originally intended use. The proposed development scored 70 points on the City’s Conservation and Rehabilitation scoring matrix, exceeding the minimum 50 points required. Consistency with Plans The property is zoned to Institutional with a Planned Development Overlay (I-PD) which is consistent with recommendations with the Comprehensive Plan for creating diverse housing options. The proposed Plan is also in line with the key discussion point of the ongoing Comprehensive Housing Study that is presently taking place. RECOMMENDATIONS/CONDITIONS Staff recommends approval of the Project Plan and Boundaries for TID #41 as proposed. The Plan Commission recommended approval of the project plan and TID boundaries on September 21, 2021. The following is Plan Commission’s discussion on the item. Site Inspections Report: Mr. Hinz and Mr. Mitchell reported visiting the site. Staff report accepted as part of the record. Prior to taking action on proposed Tax Increment District (TID) No. 41 and the designation of boundaries for said TID, the Plan Commission is to hold a public hearing and take comments concerning proposed creation of TID No. 41. The public hearing is required as part of the formal Item I: Creation of TID #40 Miles Kimball Redevelopment review process the City must follow in the creation of any tax incremental financing district or amendment thereto. Mr. Lyons presented the item and reviewed the site and surrounding area as well as the land use and zoning classifications in this area. The applicant is proposing an adaptive reuse of the former building to an affordable apartment building. Per the submitted narrative, 31 two and three bedroom units are planned to be constructed within the building and 44 garage spaces along with additional surface parking. Finding appropriate uses for buildings of this type can be challenging as they outlive their original intended use. Mr. Hinz opened up technical questions to staff. Mr. Mitchell asked what is usually included in TIF packages and if the City ever adds a job training element that the developer is not responsible for, but where funds could be used to train unemployed or underemployed individuals in the construction trade. It looks like it’s a normal part of TIF programming that they have specific sections with guidance on how to use it for job training. He is wondering if the City does any of that. Mr. Lyons replied that they have done job creation with TIFs, but he cannot recall a TIF with a job training element. Mr. Mitchell stated that they often fund the development itself and expect that single development is going to improve the entire neighborhood, omitting all of the neighboring or adjoining properties. It looks like the City can use financing to provide either below market rate loans and even grants to neighboring properties if part of the provision of the project is to improve a neighborhood. He asked if the City has looked at doing something like that because there are many adjoining properties here that could maybe benefit. Mr. Lyons replied that it depends on the nature of the TID and the financing available. They included a lot of projects in the Oshkosh Avenue TID for stabilization of that neighborhood because it was expected to generate enough increment to fund those improvements. In this case they’ll need the full 27 years to pay off the obligations of the project, so there isn’t enough increment to fund those improvements. They can only spend TID dollars for projects within a half mile around the TID, so there are some parameters that go along with the ability to create programs like that, but they have done it in the past. Mr. Mitchell thanked Mr. Lyons for his explanation. Mr. Hinz asked for any public comments and asked if the applicant wanted to make any statements. Ms. Monica Doehrmann, 1726 Minnesota Street, asked if her taxes would increase. Mr. Lyons replied that they will not increase. Item I: Creation of TID #40 Miles Kimball Redevelopment Mr. Tim Hess, 2645 Templeton Place, stated that he is one of the owners until this is completed and he would be happy to answer any questions. A few questions were posed to him ahead of time that he would like to address now. Mr. Hess stated that one question was why they are now going to low income housing when before they were talking about market rate. When they initially bought the building in December 2019, they were hoping to start by the spring of this year, but the pandemic substantially slowed down the historic preservation review process. Last week they got the final approval from the National Park Service for the plans that they have here. They are ready to roll, but the four partners involved had kind of plotted out what they were looking to invest in the next couple years and a different project came up that they were interested in doing. They realized that now that they’ve worked through the process, they could come back and potentially do this as low income. Why they’re doing it is really a question of timing. It doesn’t change much in terms of the plan and it changes virtually nothing inside of the building. Mr. Hess stated that this is going to be low income housing and they’re going to be using low income housing tax credits through WEDA, which comes with a lot more accessibility considerations. They added a publically accessible restroom and 50% of the units are visitable. If they were doing new construction it would have to be 100%, but they appreciate it’s a historical building and the Historical Society isn’t going to let them rip open the historic doors there. They are also making sure that the bathrooms have the full radius turning for handicap accessibility. They had to move the islands in the kitchen out a bit further for accessibility. In the grand scheme of things, it’s the exact same project only WEDA is asking them to do more in terms of accessibility and they’re happy to do that. Ms. Propp asked what the units would potentially rent for. Mr. Hess replied that the rent is going to be based off their income. As a 4% deal, they are allowed to do income averaging. The maximum allowable for these projects is 60% of the community median income. They are targeting for an average of somewhere between 50% and 60%, but they anticipate maybe some at 40%. For someone at 40% of the median income, a one bedroom is $528, a two bedroom is $636, and a three bedroom would be $739. It ensures that someone coming in with maximum amount is spending 30% of their income on housing, so the actual limit could be a little more. They would be paying utilities too, so they factor that out of the rent. For someone coming it at 60% on the higher end, a one bedroom is $775, a two bedroom is $993, and a three bedroom is $1,083. Ms. Propp thanked Mr. Hess for his explanation, adding that those of them who have been working with lower income folks know that $775 is still a massive rent. Mr. Mitchell asked if they are doing the full building as qualified income units or if they are segregating part of the building. Mr. Hess replied that all 31 units are qualified income units. Item I: Creation of TID #40 Miles Kimball Redevelopment Mr. Mitchell asked if there is a program they are partnering with to close the gap between the income-based rent and market rate rent. Mr. Hess replied that he isn’t the expert on that portion of this. Mr. Mitchell asked if there are other programs they are partnering with as part of this development. Mr. Hess replied that right now everything is through WEDA. They’re providing the exceptional financing. Normally with the bank its 80% loan to value and WEDA is providing 130% loan to value. They are also looking at using federal Home Program dollars from the Department of Administration. Additional programming on the back end side of the project is not his expertise with this. Mr. Mitchell asked if they would accept a housing choice voucher award from the Housing Authority from an applicant. Mr. Hess replied that his understanding is that they have to accept the voucher. They’re meeting all the standards and checking that it’s up to standard, so he can’t fathom why they wouldn’t. Mr. Mitchell replied that this is wonderful news. He is happy to see this because there is a major gap in the community. As they’re aware, the a lot of projects don’t serve folks at an affordable rent rate and sometimes there may be some opposition to the notion of affordable housing, but these are folks often work service jobs and are an important part of the community who need an affordable place to live. He commends them for this. Ms. Davey stated that many of them in this group realize how important affordable housing is in Oshkosh. She is thrilled that they are able to bring 31 affordable units between timing and financing. She thinks it is fantastic and greatly needed. Ms. Sue Volkman, 1752 Oregon Street, asked if they are planning to acquire property other than the school building. Mr. Lyons replied that no other acquisitions are anticipated as part of this project. Ms. Volkman stated that not too long ago they had sidewalks put in there, which is also listed for proposed project improvements. She asked if that was something that they’re still considering. Mr. Lyons replied that he cannot recall anything for that in the project plan. Ms. Nieforth replied that it would just be through the school and it would not be for private owners outside of the district. Item I: Creation of TID #40 Miles Kimball Redevelopment Ms. Volkman asked if there are grants or loans available to improve something around their properties. Mr. Lyons replied that it was discussed earlier, but there is no additional programming proposed. Mr. Hinz closed public comments and asked if the applicant wanted to make any closing statements. There were no closing statements from the applicant. Motion by Mitchell to approve the Project Plan and recommending the boundaries to the Council and adopting the staff report as the findings. Seconded by Ford. Mr. Hinz asked if there was any discussion on the motion. Mr. Hinz stated that he lives in this neighborhood and his family attended this school, so it is great to see that it is going to be rehabilitated and remain in the neighborhood and do good things for people. He knows he says this a lot, but it is great seeing local developers putting back into Oshkosh, especially with historical buildings like this. He thanked the development team for their work on this. Motion carried 9-0. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 1      September 21, 2021 PROJECT PLAN City of Oshkosh, Wisconsin Tax Incremental District No. 41 (Smith School Redevelopment) Prepared by: Ehlers N21W23350 Ridgeview Parkway West, Suite 100 Waukesha, WI 53188   BUILDING COMMUNITIES. IT’S WHAT WE DO. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 2  KEY DATES Organizational Joint Review Board Meeting Held: September 17, 2021 (Scheduled) Public Hearing Held: September 21, 2021 (Scheduled) Approval by Plan Commission: September 21, 2021 (Scheduled) Adoption by Common Council: October 12, 2021 (Scheduled) Approval by the Joint Review Board: TBD TABLE OF CONTENTS Executive Summary ................................................................................................................................. 3  Preliminary Maps of Proposed District Boundary ...................................................................... 6  Map Showing Existing Uses and Conditions ............................................................................... 10  Preliminary Parcel List and Analysis ............................................................................................... 13  Equalized Value Test ............................................................................................................................. 15  Statement Listing the Kind, Number and Location of All Proposed Public Works or Improvements Within the District ................................................................................................... 16  Map Showing Proposed Improvements and Uses ..................................................................... 21  Detailed List of Estimated Project Costs .................................................................................... 24  Economic Feasibility Study, Description of the Methods of Financing Estimated Project Costs and the Time When Related Costs or Monetary Obligations are to be Incurred ...................................................................................................................................................... 25  Annexed Property ................................................................................................................................. 30  Estimate of Property to Be Devoted to Retail Business ....................................................... 30  Proposed Changes of Zoning Ordinances, Master Plan, Map, Building Codes and City Ordinances ...................................................................................................................................... 30  Statement of the Proposed Method for the Relocation of any Persons to be Displaced .................................................................................................................................................... 31  How Creation of the Tax Incremental District Promotes the Orderly Development of the City ................................................................................................................................................... 31  List of Estimated Non-Project Costs .............................................................................................. 32  Legal Opinion Advising Whether the Plan is Complete and Complies with Wis. Stat. § 66.1105(4)(f) .........................................................................................................................................33  Calculation of the Share of Projected Tax Increments Estimated to be Paid by the Owners of Property in the Overlying Taxing Jurisdictions ..................................................35 Tax Incremental District No. 41 Project Plan City of Oshkosh  Prepared by Ehlers Page | 3  SECTION 1: Executive Summary DESCRIPTION OF DISTRICT Tax Incremental District (“TID”) No. 41 (“District”) is a proposed district in need of rehabilitation or conservation consisting of a 2.66-acre parcel located at 1745 Oregon Street, the former Oshkosh Area School District Smith Elementary School which was sold in 2019. The City has received an application from Northpointe Development Corporation (“Developer”) for tax incremental financing (“TIF”) assistance to support rehabilitation of the school structure for use as low-income apartments (“Project”). The Project will include a total of 31 one-, two- and three-bedroom apartment units and construction of 44 garage spaces with additional off-street parking. The Project would be financed with a combination of Low-Income Housing Tax Credits (LIHTC), Historic Tax Credits, DOA Home program funds and a “pay as you go” development incentive provided by the District. AUTHORITY The City is creating the District under the provisions of Wis. Stat. § 66.1105. ESTIMATED TOTAL PROJECT COST EXPENDITURES The City anticipates making total expenditures of approximately $1,647,000 (“Project Costs”) to undertake the projects listed in this Project Plan (“Plan”). Project Costs include an estimated $1,482,000 in development incentives and $164,000 for District administrative costs related to its creation and ongoing administration. Based on the cash flow projection and assumptions made in this Plan, the $1,482,000 development incentive has a present value of approximately $780,000 that the Developer will monetize through WHEDA at a 4.25% discount rate. INCREMENTAL VALUATION The City projects that new land and improvements value of approximately $2.05 million will result from the Project. Creation of this additional value will be made possible by the Project Costs made within the District. A table detailing assumptions as to the development timing and associated values is included in the Economic Feasibility Study located within this Plan. EXPECTED TERMINATION OF DISTRICT Based on the Economic Feasibility Study located within Section 9 of this Plan, the City anticipates that the District will need to remain open for its entire 27 year life to generate sufficient tax increment to pay all Project Costs. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 4  SUMMARY OF FINDINGS As required by Wis. Stat. § 66.1105, and as documented in this Plan and the exhibits contained and referenced herein, the following findings are made: 1. That “but for” the creation of this District, the development projected to occur as detailed in this Plan: 1) would not occur; or 2) would not occur in the manner, at the values, or within the timeframe desired by the City. The City recognizes the community need for affordable housing which typically requires TIF participation. The Developer’s application for TIF assistance reflects an Internal Rate of Return of 3.59% for the tax credit investor if approximately $1,482,000 in development incentives are provided to the Project, and a negative 0.78% return without incentives. Based on the Developer’s representations in their application for TIF assistance, the City has concluded that the Project would not likely proceed without a development incentive. The specific amount and terms of any incentive provided to the Project will be subject to additional due diligence undertaken by the City prior to approval of a development agreement. 2. The economic benefits of the District, as measured by increased employment, business and personal income, and property value, are sufficient to compensate for the cost of the improvements. In making this determination, the City has considered that in addition to the incremental value expected to be created, the Project will result in rehabilitation and conservation of the former school building, creation of affordable housing, and provision of employment and commercial opportunities related to the construction and operation of the Project. 3. The benefits of the proposal outweigh the anticipated tax increments to be paid by the owners of property in the overlying taxing jurisdictions. As required by Wis. Stat. § 66.1105(4)(i)4., a calculation of the share of projected tax increments estimated to be paid by the owners of property in the overlying taxing jurisdictions has been prepared and can be found in this Plan. However, because the Project would not occur without the use of tax incremental financing, these tax increments would not be paid but for creation of the District. Accordingly, the City finds that the benefits expected to be realized as set forth in this Plan outweigh the value of the tax increments to be invested in the Project. 4. Not less than 50% by area of the real property within the District is in need of rehabilitation or conservation work as defined by Wis. Stat. § 66.1337(2m)(a). (See Section 4 of this Plan for basis of finding). 5. Based on the foregoing finding, the District is designated as a district in need of rehabilitation or conservation. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 5  6. The Project Costs relate directly to the rehabilitation or conservation of property and improvements in the District, consistent with the purpose for which the District is created. 7. Improvements to be made in the District are likely to significantly enhance the value of substantially all of the other real property in the District. 8. The equalized value of taxable property in the District, plus the incremental value of all existing tax incremental districts within the City does not exceed 12% of the total equalized value of taxable property within the City. 9. The City estimates that none of the territory within the District will be devoted to retail business at the end of the District’s maximum expenditure period, pursuant to Wis. Stat. § 66.1105(5)(b). 10. That there are no parcels to be included within the District that were annexed by the City within the preceding three-year period. 11. The Plan for the District is feasible and is in conformity with the Master (Comprehensive) Plan of the City. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 6  SECTION 2: Preliminary Maps of Proposed District Boundary Maps Found on Following Pages. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 7  Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 8  Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 9  Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 10  SECTION 3: Map Showing Existing Uses and Conditions Map Found on Following Page. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 11  Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 12  Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 13  SECTION 4: Preliminary Parcel List and Analysis The District will consist of a single tax parcel: Parcel Number: 14-0360-000 Address: 1745 Oregon Street Owner: Smith School Lofts LLC Acres: 2.66 Current Value: The improvements located on the parcel, the former Smith Elementary School. are in need of rehabilitation or conservation as defined by Wis. Stat. § 66.1337(2m)(a). Specifically, the Plan includes: 1. Carrying out plans for a program of voluntary repair and rehabilitation of buildings or other improvements. 2. Rehabilitation of buildings and improvements on the property where necessary to eliminate unhealthful, unsanitary, or unsafe conditions, eliminate obsolete or other uses detrimental to the public welfare, to otherwise remove or prevent the spread of blight or deterioration. The original school was designed by noted Oshkosh architect William Waters in 1896 as a four-classroom building with a central stair. In 1929, the firm of Auler, Jensen and Brown designed an addition to the west adding an additional 6 classrooms and recreational space. In 1996 the Oshkosh Area School District (“OASD”) added a gymnasium with two additional classrooms and central offices to the building. In June of 2019, the Oshkosh Board of Education voted to close Smith School after 124 years of educational service citing $3.7 million in needed repairs and maintenance. Assessed Equalized* Land $152,100 $187,800 Improvements $148,900 $183,800 Total $301,000 $371,600 * Assessor’s estimated 2021 equalization ratio as reported in Invista Analytics, LLC’s “Investment Analysis Report” dated August 17, 2021. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 14  These costs are detailed in a presentation prepared by OASD dated May 22, 2019 titled “Facilities Planning: Smith Elementary” and in a related document titled “3315_OASD Study Document_8.1.17_smith.pdf” both of which are on file with the City. Some of the costs cited include replacement of the original building roof, correction of water infiltration into occupied space, exterior envelope tuck pointing, replacement of dated and failing plumbing fixtures, mold remediation, and building wide window replacement. The costs cited by the OASD support the conclusion that the property is in need of rehabilitation given that adaptive reuse of the property will require that many of the same repairs be made. In May of this year, the Wisconsin Historic Preservation Review Board voted to include Smith School on the state register of historic places and nominated it for the National Register of historic places. A preliminary determination by the National Park Service suggested that this property is likely to be listed on the National Registry. It is anticipated that the National Park Service will make the final National Registry determination soon. Architectural plans developed by Wesenberg Architects show the building being transformed into 31 total apartments including one-, two-, and three- bedroom units. These plans have been reviewed by the Wisconsin Historical Society’s State Historic Preservation Office and have been determined to be consistent with the Secretary of the Interior’s standards for historic preservation by the state. Should the National Park Service make an affirmative final determination on the National Registry Listing, as well as approve the proposed development plan, the project will be eligible to receive both federal and state historic preservation tax credits. The historic status and local significance of the property, its inclusion on the state register of historic places and potential inclusion on the National Register of historic places combined with the need for rehabilitation work support the conclusion that the property is also in need of conservation. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 15  SECTION 5: Equalized Value Test The following calculations demonstrate that the City expects to be in compliance with Wis. Stat. § 66.1105(4)(gm)4.c., which requires that the equalized value of the taxable property in the proposed District, plus the value increment of all existing tax incremental districts, does not exceed 12% of the total equalized value of taxable property within the City. The equalized value of the increment of existing tax incremental districts within the City, plus the base value of the proposed District, totals $258,780,805. This value is less than the maximum $578,533,500 in equalized value that is permitted for the City. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 16  SECTION 6: Statement Listing the Kind, Number and Location of All Proposed Public Works or Improvements Within the District Project Costs are any expenditure made, estimated to be made, or monetary obligations incurred or estimated to be incurred as outlined in this Plan. Project Costs will be diminished by any income, special assessments or other revenues, including user fees or charges, other than tax increments, received or reasonably expected to be received in connection with the implementation of the Plan. If Project Costs incurred benefit territory outside the District, a proportionate share of the cost is not a Project Cost. Costs identified in this Plan are preliminary estimates made prior to design considerations and are subject to change after planning, design and construction is completed. The costs of engineering, design, survey, inspection, materials, construction, restoring property to its original condition, apparatus necessary for public works, legal and other consultant fees, testing, environmental studies, permits, updating City ordinances and plans, judgments or claims for damages and other expenses are included as Project Costs. The following is a list of public works and other tax incremental financing eligible Project Costs that the City expects to make, or may need to make, in conjunction with the implementation of the District’s Plan. The map found in Section 7 of this Plan along with the Detailed List of Project Costs found in Section 8 provide additional information as to the kind, number and location of potential Project Costs. Community Development Cash Grants (Development Incentives) The City may enter into agreements with property owners, lessees, or developers of land located within the District for sharing costs to encourage the desired kind of improvements and assure tax base is generated sufficient to recover Project Costs. No cash grants will be provided until the City executes a developer agreement with the recipient of the cash grant. Any payments of cash grants made by the City are eligible Project Costs. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 17  Utilities Sanitary Sewer System Improvements To allow development to occur, the City may need to construct, alter, rebuild, or expand sanitary sewer infrastructure within the District. Eligible Project Costs include, but are not limited to, construction, alteration, rebuilding, or expansion of collection mains; manholes and cleanouts; service laterals; force mains; interceptor sewers; pumping stations; lift stations; wastewater treatment facilities; and all related appurtenances. To the extent sanitary sewer projects undertaken within the District provide direct benefit to land outside of the District, the City will make an allocation of costs based on such benefit. Those costs corresponding to the benefit allocated to land within the District, and necessitated by the implementation of the Project Plan, are eligible Project Costs. Implementation of the Project Plan may also require that the City construct, alter, rebuild or expand sanitary sewer infrastructure located outside of the District. That portion of the costs of sanitary sewer system projects undertaken outside the District which are necessitated by the implementation of the Project Plan are eligible Project Costs. Water System Improvements To allow development to occur, the City may need to construct, alter, rebuild, or expand water system infrastructure within the District. Eligible Project Costs include, but are not limited to, construction, alteration, rebuilding, or expansion of distribution mains; manholes and valves; hydrants; service laterals; pumping stations; wells; water treatment facilities; storage tanks and reservoirs; and all related appurtenances. To the extent water system projects undertaken within the District provide direct benefit to land outside of the District, the City will make an allocation of costs based on such benefit. Those costs corresponding to the benefit allocated to land within the District, and necessitated by the implementation of the Project Plan, are eligible Project Costs. Implementation of the Project Plan may also require that the City construct, alter, rebuild, or expand water system infrastructure located outside of the District. That portion of the costs of water system projects undertaken outside the District which are necessitated by the implementation of the Project Plan are eligible Project Costs. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 18  Stormwater Management System Improvements Development within the District will cause stormwater runoff. To manage this stormwater runoff, the City may need to construct, alter, rebuild, or expand stormwater management infrastructure within the District. Eligible Project Costs include, but are not limited to, construction, alteration, rebuilding, or expansion of stormwater collection mains; inlets, manholes and valves; service laterals; ditches; culvert pipes; box culverts; bridges; stabilization of stream and riverbanks; and infiltration, filtration, and detention Best Management Practices (BMP’s). To the extent stormwater management system projects undertaken within the District provide direct benefit to land outside of the District, the City will make an allocation of costs based on such benefit. Those costs corresponding to the benefit allocated to land within the District, and necessitated by the implementation of the Project Plan, are eligible Project Costs. Implementation of the Project Plan may also require that the City construct, alter, rebuild, or expand stormwater management infrastructure located outside of the District. That portion of the costs of stormwater management system projects undertaken outside the District which are necessitated by the implementation of the Project Plan are eligible Project Costs. Electric Service To create sites suitable for development, the City may incur costs to provide, relocate or upgrade electric services. Relocation may require abandonment and removal of existing poles or towers, installation of new poles or towers, or burying of overhead electric lines. Costs incurred by the City to undertake this work are eligible Project Costs. Gas Service To create sites suitable for development, the City may incur costs to provide, relocate or upgrade gas mains and services. Costs incurred by the City to undertake this work are eligible Project Costs. Communications Infrastructure To create sites suitable for development, the City may incur costs to provide, relocate or upgrade infrastructure required for voice and data communications, including, but not limited to telephone lines, cable lines and fiber optic cable. Costs incurred by the City to undertake this work are eligible Project Costs. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 19  Streets and Streetscape Street Improvements To allow development to occur, the City may need to construct or reconstruct streets, highways, alleys, access drives and parking areas. Eligible Project Costs include, but are not limited to: excavation; removal or placement of fill; construction of road base; asphalt or concrete paving or repaving; installation of curb and gutter; installation of sidewalks and bicycle lanes; installation of culverts, box culverts and bridges; rail crossings and signals; utility relocation, to include burying overhead utility lines; street lighting; installation of traffic control signage and traffic signals; pavement marking; right-of-way restoration; installation of retaining walls; and installation of fences, berms, and landscaping. Streetscaping and Landscaping To attract development consistent with the objectives of this Plan, the City may install amenities to enhance development sites, rights-of-way, and other public spaces. These amenities include but are not limited to landscaping; lighting of streets, sidewalks, parking areas and public areas; installation of planters, benches, clocks, tree rings, trash receptacles and similar items; and installation of brick or other decorative walks, terraces and street crossings. These and any other similar amenities installed by the City are eligible Project Costs. Miscellaneous Projects Outside the Tax Increment District Pursuant to Wis. Stat. § 66.1105(2)(f)1.n, the City may undertake projects within territory located within one-half mile of the boundary of the District provided that: 1) the project area is located within the City’s corporate boundaries; and 2) the projects are approved by the Joint Review Board. The cost of projects completed outside the District pursuant to this section are eligible project costs and may include any project cost that would otherwise be eligible if undertaken within the District. The City intends to install public improvements as needed to support the Project. These public improvements may need to be made within the rights-of-way adjoining the District, or in other areas near the District’s boundaries. While the cashflow projections in this Plan indicate that no funds will be available at the end of the District’s expenditure period to pay costs other than those identified in Section 8 of the Plan, should the District’s performance exceed expectations the City may need to make public infrastructure improvements to benefit the District. In that case, the City will utilize District funds to pay for those costs to the extent funds are available and the work benefits the Project and District. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 20  Professional Service and Organizational Costs The costs of professional services rendered, and other costs incurred, in relation to the creation, administration and termination of the District, and the undertaking of the projects contained within this Plan, are eligible Project Costs. Professional services include but are not limited to architectural; environmental; planning; engineering; legal; audit; financial; and the costs of informing the public with respect to the creation of the District and the implementation of the Plan. Administrative Costs The City may charge to the District as eligible Project Costs reasonable allocations of administrative costs, including, but not limited to, employee salaries. Costs allocated will bear a direct connection to the time spent by City employees relating to the implementation of the Plan. Financing Costs Interest expense, debt issuance expenses, redemption premiums, and any other fees and costs incurred in conjunction with obtaining financing for projects undertaken under this Plan are eligible Project Costs. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 21  SECTION 7: Map Showing Proposed Improvements and Uses Maps Found on Following Pages. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 22  Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 23  Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 24  SECTION 8: Detailed List of Estimated Project Costs The following list identifies the Project Costs that the City currently expects to incur in implementing the District’s Plan. All projects identified and related costs reflect the best estimates available as of the date of preparation of this Plan. All costs are preliminary estimates and may increase or decrease. Certain Project Costs listed may become unnecessary, and other Project Costs not currently identified may need to be made. (Section 6 details the general categories of eligible Project Costs). Changes in Project Cost totals or the types of Project Costs to be incurred will not require that this Plan be amended. This Plan is not meant to be a budget nor an appropriation of funds for specific Project Costs, but a framework within which to manage Project Costs. While the cashflow projections in this Plan indicate that no funds will be available at the end of the District’s expenditure period to pay costs other than those identified in this Section, should the District’s performance exceed expectations the City may need to make public infrastructure improvements to benefit the District. In that case, the City will utilize District funds to pay for those costs to the extent funds are available and the work benefits the Project and District. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 25  SECTION 9: Economic Feasibility Study, Description of the Methods of Financing Estimated Project Costs and the Time When Related Costs or Monetary Obligations are to be Incurred This Section includes a forecast of the valuation increases expected within the District, the associated tax increment collections, a summary of how Project Costs would be financed, and a projected cash flow demonstrating that the District is economically feasible. Key Assumptions The Project Costs the City plans to make are expected to create $2.05 million in incremental value by January 1, 2023. Estimated valuations and timing for construction of the Project are included in Table 1. Assuming a projected equalized TID Interim tax rate of $25.44 per thousand of equalized value and an annual 1% increase in the value of the Project due to economic appreciation the Project would generate approximately $1.65 million in incremental tax revenue over the 27-year term of the District as shown in Table 2. The projected tax rate used for this Plan is intended to reflect the anticipated impacts of the Oshkosh Area School District capital facilities referendum approved in 2020. The current TID interim tax rate for the 2021 budget year is $24.60 per thousand of equalized value. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 26  Table 1 – Development Assumptions Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 27  Table 2 – Tax Increment Projection Worksheet Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 28  Financing and Implementation The City anticipates making total expenditures of approximately $1,647,000 including an estimated $1,482,000 in development incentives and $165,000 for District administrative costs related to its creation and ongoing administration. Based on the cash flow projection and assumptions made in this Plan, the $1,647,000 development incentive has a present value of approximately $780,000 that the Developer will monetize through WHEDA at a 4.25% discount rate. The potential incentive amount included in this Plan is based on Developer’s TIF assistance request. The specific amount and terms of any incentive provided to the Project will be subject to additional due diligence undertaken by the City prior to approval of a development agreement. Development incentive payments will be paid from tax increments as they are collected on a “pay as you go” basis. Administrative expenses will be paid from tax increments collected, or from advances from other funds to the extent those costs exceed cash amounts available. The City will recover any amounts advanced to the District as cash flows permit. Based on the cash flow exhibit (Table 3), the City anticipates that the District will need to remain open for its entire 27-year life to generate enough tax increment to pay all Project Costs. While the cashflow projection indicates that no funds will be available at the end of the District’s expenditure period to pay costs other than those identified in the projection and in Section 8 of this Plan, should the District’s performance exceed expectations the City may need to make public infrastructure improvements to benefit the District. In that case, the City will utilize District funds to pay for those costs to the extent funds are available and the work benefits the Project and District. Tax Incremental District No. 41 Project Plan  City of Oshkosh Prepared by Ehlers  Page | 29  Table 3 – Cash Flow Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 30  SECTION 10: Annexed Property A tax incremental district cannot include annexed territory unless at least three years have elapsed since the annexation, or certain other requirements are met. None of the property within the proposed District boundary was annexed during the past three years. SECTION 11: Estimate of Property to Be Devoted to Retail Business Pursuant to Wis. Stat. § 66.1105(5)(b), the City estimates that none of the territory within the District will be devoted to retail business at the end of the District’s maximum expenditure period. SECTION 12: Proposed Changes of Zoning Ordinances, Master Plan, Map, Building Codes and City Ordinances Zoning Ordinances The proposed Plan is in general conformance with the City’s current zoning ordinances. Individual properties may require rezoning at the time of development. Master (Comprehensive) Plan and Map The proposed Plan is in general conformance with the City’s Comprehensive Plan identifying the area as appropriate for multi-family development. Building Codes and Ordinances Development within the District will be required to conform to State Building Codes and will be subject to the City's permitting and inspection procedures. The proposed Plan conforms to all relevant State and local ordinances, plans, and codes. No changes to the existing regulations are proposed or needed. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 31  SECTION 13: Statement of the Proposed Method for the Relocation of any Persons to be Displaced Should implementation of this Plan require relocation of individuals or business operations, relocations will be handled in compliance with Wis. Stat. Chapter 32 and Wis. Admin. Code ADM 92. SECTION 14: How Creation of the Tax Incremental District Promotes the Orderly Development of the City Creation of the District and the implementation of the projects in its Plan will promote the orderly development of the City by rehabilitating and conserving property and providing appropriate financial incentives for private development projects. Through use of tax increment financing, the City can attract new investment that results in increased tax base. Development will occur in an orderly fashion in accordance with approved plans so that the Projects will be compatible with adjacent land uses. Development of new uses in the District will add to the tax base and will generate positive secondary impacts in the community such as rehabilitation and conservation of a blighted historic structure, creation of affordable market rate multi-family housing to meet market demand, and provision of employment and commercial opportunities related to the construction and operation of the Project Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 32  SECTION 15: List of Estimated Non-Project Costs Non-project costs are public works projects which only partly benefit the District. Costs incurred that do not benefit the District may not be paid with tax increments. Examples of non-project costs are:  A public improvement made within the District that also benefits property outside the District. That portion of the total Project Costs allocable to properties outside of the District would be a non-project cost.  A public improvement made outside the District that only partially benefits property within the District. That portion of the total Project Costs allocable to properties outside of the District would be a non- project cost.  Projects undertaken within the District as part of the implementation of this Project Plan, the costs of which are paid fully or in part by impact fees, grants, special assessments, or revenues other than tax increments. No improvements to be made within the District will benefit property outside the District. Furthermore, there will be no improvements made outside the District that will only partially benefit the District. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 33  SECTION 16: Legal Opinion Advising Whether the Plan is Complete and Complies with Wis. Stat. § 66.1105(4)(f) Legal Opinion Found on Following Page. Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 34  Tax Incremental District No. 41 Project Plan  City of Oshkosh  Prepared by Ehlers  Page | 35  SECTION 17: Calculation of the Share of Projected Tax Increments Estimated to be Paid by the Owners of Property in the Overlying Taxing Jurisdictions The following projection is provided to meet the requirements of Wis. Stat. § 66.1105(4)(i)4.