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HomeMy WebLinkAbout29. 16-442AUGUST 23, 2016 16 -442 RESOLUTION (CARRIED 7 -0 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVE TAX INCREMENT DISTRICT NO. 30 PROJECT PLAN; DESIGNATE TAX INCREMENT DISTRICT NO. 30 BOUNDARIES; CREATE TAX INCREMENT DISTRICT NO. 30 WASHINGTON BUILDING 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. 30 (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)(f)1.k. and 66.1105(2)(f)1.n., 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; AUGUST 23, 2016 16 -442 RESOLUTION CONTD 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 August 2, 2016 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. 30, Washington Building Redevelopment ", are hereby established as specified in Exhibit A of this Resolution. 2. The District is created effective as of January 1, 2016. 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 of Wisconsin Statutes Section 66.1337(2m)(b). (b) Based upon the finding, 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. AUGUST 23, 2016 16 -442 RESOLUTION CONTD (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 less than 35% 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 #30 was within the City boundaries as of January 1, 2004. 4. The Project Plan for "City of Oshkosh Tax Increment District No. 30, Washington Building Redevelopment" (attached as Exhibit B) 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. 30 Washington Building Redevelopment. "Exhibit A" TID 30 Washington Building Redevelopment Legal Description PARTS OF LOTS A ND B AND ALL OF C IN G. PAPENDIEK'S PLAT, LOTS 1 THROUGH 4 AND PART OF LOT 5 IN BLOCK 26 OF L.M. MILLER'S FIRST ADDITION, PARTS OF WASHINGTON AVENUE, STATE STREET AND WAUGOO AVENUE, ALL LOCATED IN THE NORTHEAST 1/4 OF THE SOUTHWEST 1/4, SECTION 24, TOWNSHIP 18 NORTH, RANGE 16 EAST, CITY OF OSHKOSH, WINNEBAGO COUNTY, WISCONSIN BOUNDED AND DESCRIBED AS FOLLOWS: COMMENCING FROM THE NORTHWEST CORNER OF SAID SECTION 24, TOWNSHIP 18 NORTH, RANGE 16 EAST; THENCE SOUTH 00 °1531" EAST, 23.88 FEET ALONG THE WEST OF THE SOUTHWEST 1/4 OF SAID SECTION 24; THENCE NORTH 89 056'16" EAST, 1,643.89 FEET TO A POINT ON THE APPROXIMATE CENTERLINE OF STATE STREET AS CONSTRUCTED AND ALSO BEING THE POINT OF BEGINNING; THENCE NORTH 24 035'03" WEST, 31.07 FEET ALONG SAID CENTERLINE TO A POINT ON THE NORTH LINE OF THE SOUTHWEST 1/4 OF SAID SECTION 24; THENCE NORTH 89 056'16" EAST, 278.42 FEET ALONG SAID NORTH LINE OF THE SOUTHWEST 1/4 OF SECTION 24; THENCE SOUTH 00 003'44" EAST, 29.02 FEET TO A POINT ON THE SOUTH RIGHT -OF -WAY LINE OF WASHINGTON AVENUE; THENCE SOUTH 04 05929" EAST, 75.50 FEET TO A POINT ON THE EAST LINE OF LOT B OF PAPENDIEK'S PLAT; THENCE SOUTH 00 045'40" EAST, 23.77 FEET ALONG SAID EAST LINE TO THE SOUTHEAST CORNER OF SAID LOT B; THENCE NORTH 76 035'16" WEST, 5.80 FEET ALONG THE SOUTH LINE OF SAID LOT B TO THE NORTHEAST CORNER OF LOT C OF SAID PAPENDIEK'S PLAT; THENCE SOUTH 13 024'44" WEST, 50.00 FEET ALONG THE EAST LINE OF SAID LOT C TO A POINT ON THE NORTH LINE OF LOT 1 OF L.M. MILLER'S FIRST ADDITION; THENCE SOUTH 76 035'16" EAST, 89.20 FEET ALONG LOTS 1, 4 AND 5 OF SAID OF L.M. MILLER'S FIRST ADDITION; THENCE SOUTH 13 02444" WEST, 155.70 FEET TO A POINT ON THE CENTERLINE OF WAUGOO AVENUE; THENCE NORTH 76 035'16" WEST, 270.35 FEET ALONG SAID CENTERLINE TO A POINT ON THE APPROXIMATE CENTERLINE OF STATE STREET AS CONSTRUCTED; THENCE NORTH 14 016'31" EAST, 40.68 FEET ALONG SAID CENTERLINE TO THE BEGINNING OF A 188.79 FOOT RADIUS CURVE TO THE LEFT; THENCE 128.04 FEET ALONG SAID CURVE, ALSO BEING THE APPROXIMATE CENTERLINE OF STATE STREET AS CONSTRUCTED, WHOSE CHORD BEARS NORTH 05 009'16" WEST, 125.60 FEET; THENCE NORTH 24 035'03" WEST, 99.97 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. SAID AREA CONTAINS 80,480 SQUARE FEET OR 1.848 ACRES, MORE OR LESS. Oshkosh MEMORANDUM TO: Honorable Mayor and Members of the Common Council FROM: Darryn Burich Director of Planning Services DATE: July 7, 2016 RE: Approve Tax Increment District No. 30 Project Plan; Designate Tax Increment District No. 30 Boundaries; Create Tax Increment District No. 30 Washington Building Redevelopment (Plan Commission Recommend Approval) BACKGROUND Tax Incremental District No. 30 (the "TID" or "District ") is a proposed one acre district in need of rehabilitation or conservation located in downtown Oshkosh at the intersection of Washington Avenue and State Street. TID No. 30 is being created to facilitate and support the historic rehabilitation of 105 Washington Avenue (aka. Fraternal Reserve Association Building) as an adaptive reuse project from office usage to residential apartments. The 5 story 29,100 square foot structure is being rehabilitated to create 20 "higher end" residential apartment units that will rent from $700 - $1200. The total project costs to facilitate this rehabilitation are approximately $3.9 million or approximately $195,000 per unit. TIF in this instance is being requested as a development incentive to facilitate construction of garages on a portion of the adjacent city parking lot (State Street Lot) as well as being used to offset reconstruction of the remaining parking lot area that will be used for public parking (those actions will require additional Plan Commission and Common Council action as project plan implementation items). Currently that cost is estimated at $680,000. TIF will be used for construction of 20 garage units that will be rented at $80 (single stall) to $150 (double stall) per month. Enclosed off street parking is an important component in creating a housing product that is not currently offered in large quantities proximate to the core downtown Main Street environment. The only comparable higher end housing product in the area (not including the Marion Road area) would be the 100 block which is a newer higher end housing product (i.e. higher end finishes or amenities) with underground parking. There are some newer townhouses and apartments (some with garages) that have been recently constructed along Division Street but those would not be considered to be "high end" units as is proposed with the Washington Building redevelopment. Dozens of units have been developed over Main Street store fronts (some higher end) but virtually all lack any kind of enclosed parking. This project as proposed adds an amenity to the downtown housing stock that is not currently available in widespread numbers and is something that staff has heard time after time that is a much needed product from stakeholders in the community. The other significant component of this project involves reconstruction of the remaining portion of the State Street Parking Lot that will be retained for public parking with about 20 parking spaces being retained for public use. The cost of reconstructing the city retained portion of the parking lot is currently estimated at approximately $147,000. The City is engaging an independent appraisal of the property to determine the value that the property to be disposed and that value will be credited toward the public parking lot reconstruction. Any difference between the value of the land and the cost of the parking lot reconstruction will be paid for by the developer and paid back through tax increment. TIF financing is proposed to leverage private investment of $3,889,091 for this project. Through "pay as you go" (PAYGO) TIF financing, the City anticipates making total Project Cost expenditures of approximately $680,000 to support the rehabilitation of 105 Washington Avenue including an estimated $530,000 for development incentives that will be used to construct the garages and surface parking, $88,000 for parking lot reconstruction (with the developer paying the balance of the parking lot reconstruction) and the balance for administrative expenses. The project area includes another building at 300 State Street. This property is owned by another private entity and has been included for future redevelopment. No specific Project Costs are identified for 300 State Street; however, the City would expect to make available appropriate development incentives or other assistance at the time a rehabilitation project is proposed without further amending this Plan. The Project Plan includes a statement listing the kind, number, and location of proposed improvements. 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. As part of analyzing and developing this project, planning staff has consulted with both the City Assessor and the City's financial consultant Ehlers to examine the financial /market analysis submitted by the developer. Ehler's independent review has determined that the pro forma numbers are realistic and do support the use of TIF. Construction of the garages will help increase the project's cash flow, thus improving the project' (IRR) Internal Rate of Return. Without TIF, the garages will not be constructed because that will worsen the IRR and the city will still need to reconstruct the parking lot. With TIF and the garages, the property will return higher rents which will bring in higher household and disposable incomes into the center city. Additionally, without the TIF the city would bear the cost of reconstructing the parking lot. ANA1 YSIR The developer would be receiving (after any public infrastructures and administrative costs are paid) a development incentive of approximately $530,000 (estimate) that will be provided over the life of the district. The development incentive will facilitate construction of the garages, as well as reconstruction of the retained city parking lot area, that will make the project more financially viable and increase the project's Return on Investment ROIARR from - 13.68% without TIF to - 4.22% with TIF (see Appendix B of the TID No. 30 Project Plan for ROI analysis) attached. Without this TIF, no garages will be built because it simply is not financially feasible to do so without the support to increase the IRR. Additionally, as the city parking lot is in need of repair, the city would have to undertake those reconstruction costs which would approach $700,000, paid for through the general obligation debt. Additionally, lands formerly tax exempt under public ownership will be added back to the property tax roll and will have both land and improvement value that will eventually fully contribute to the overall property tax roll once the TIF is terminated. Staff asked Ehlers to do an abbreviated cash flow analysis and that communication is included as an attachment to this memo. The analysis showed a slightly different IRR based on where TIF receipts are included in the NOI calculation but still showed that a negative IRR was being achieved even with TIF and the Historic Tax Credits. As a result of the creation of this District, the City projects that additional property value of approximately $1.3 million will be created as a result of the rehabilitation project and subsequent economic appreciation. This additional value will be a direct result of the nearly $3.9 million in investment made within the District. A table detailing assumptions as to the timing of development and associated values is located in Section 10 of the Project Plan. Approval of this TIF Project Plan does not constitute approval of any activities identified in the project plan that may require other city review and approvals. TIF is the first step in the process to facilitate and support redevelopment within the District. A separate development agreement will have to be approved by the Common Council prior to any payments being made to the developer. Disposing of a portion of the public parking lot will also require separate action by the Plan Commission and Common Council. Once approved, staff would move forward with further plan implementation. FISCAL IMPACT Being that this is proposed to be a Paygo TIF for the developer's incentive the fiscal impact to the city should be very minimal with the exception of annual maintenance to administer the TIF district. For the public improvement of the parking lot, the developer will be financing that cost and be repaid from the TIF. The base value of the property at approximately $561,270 will remain being paid to the overlying taxing jurisdictions during the term of this TID's statutory lifetime which could be up to 27 years. Lastly, because the area of the public parking lot is decreasing annual maintenance (and future reconstruction) costs will lessen simply because there is less parking lot to maintain A separate developer's agreement will be required prior to any TIF payments being made to the developer. RECOMMENDATION The Plan Commission approved the TID No. 30 Project Plan and boundaries at its August 2, 2016 meeting. Respectfully Submitted, ow /C� � Darryn Burich Director of Planning Services Approved, Mark Rohloff City Manager SECTION 3: Preliminary Maps of Proposed District Boundary Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 5 July 27, 2016 NOTE: CONTRACTOR TO REPLACE FULL PANEL FOR SIDEWALK IN RIGHT OF WAY. r WASHINGTON AVENUE to PAF]GNC sal m ASPHALT GRASS PENIIFN CONCRETE - wAtTU s of (TrP.) HMiOHG� N89'56'76 "E tta d3' (Ts , PA CONCRETE CGNaaEIE NENa _ ELEGHBG II. a]NTP0. PANEL iXAFFK: 4GNAE n Pa E STAY WAIT 9GN ' 0 WE-WAY MM '.0 GRASS~.. a o l oaslrlG N , STAY WGH7 Aa uw 1 l(fl iii`1 g�ieAa�QfE�� i�. CON \7 CR ETE�� tl uw xxAm \� Pfl QROro �1 'r` GGTX'1E OxP SfI:AlAAL6. rn 1 J. GRA55 71 r� � EJ¢SeNP wAix Ii We 1 , CONCRETE i v 6 r -A —HM UN GNATE t'3r ry GFSIaIATIaI POtE� I r 1 rsHOEtE 90Ew'AHE A,a eAg ro uAxa aw u Pux EXISTING srtAS x IEVNIFA BUILDING BPEACANAY P0.5f ro BE V4D W Ca+C clE at AS'11A1T. LOT #tom rwmi�PE.tE A� rA[RSSBI£ ( PAVP (T1P) SDEwHK \I(. GAS uEroE a1TR11 TYS SIaiPGSf ro eE U59 W G LVIGSGAPFD APEAS GNLT. IEVNIFA HQ'�6�➢�,G 4lBA«5 MR, l0 Ill LQR -u• PAiworr greI«s luwc w.ucao Arc, INu ., ALL AwaK PiNEDPVED WAIAVG WPaEXTY�III@:5. vAY MALL cniEOeu ro mY s oAfR09l SPEUiiGIWNs BPEACANAY P0.5f ro BE V4D W Ca+C clE at AS'11A1T. .� FOR - EA4JIFNT Tai Aal a pm No essaTe Goc KCONCREI aiY OF G.4/KOSH, XISCCNAN EXISTING ea' (rn r�r uaTr BUILDING WAG U. YATH0.R LNWT E AM HYAG UK CONCRETE 1FIEEPHwE PANEL GR ®St ,_" CONCRETE - \la : NG PAWtWG Nc —1 IFIDORi1GT aAm, wAlJf, Alaa S11a£f AT A UIFR GALE TYS SIaiPGSf ro eE U59 W G LVIGSGAPFD APEAS GNLT. CONCRETE HQ'�6�➢�,G 4lBA«5 MR, l0 Ill LQR -u• PAiworr greI«s luwc w.ucao Arc, INu ., ALL AwaK PiNEDPVED WAIAVG WPaEXTY�III@:5. vAY MALL cniEOeu ro mY s oAfR09l SPEUiiGIWNs BPEACANAY P0.5f ro BE V4D W Ca+C clE at AS'11A1T. \ \ ' aiY OF G.4/KOSH, XISCCNAN I / GGwNSPGVT RUQG ' I .. SGD'45'4b "l - 23.77' t CONCRETE N76'J5'T "W 5.80' 4'"_ r,5 ASPHALT Im XWG WALL 'AWN-3leA« _ �`ANI(WG SIGPS 7 17. 5 �V,'�I'•� / 1� ASPHALT -� 5 PA1SLpT £TwAIX \ \ ® '/ •••� 9GN t�CIN TAPFA a�.,I ` � : -T \ \ + XG- n"AHrxw T r l 129.20' \ A2 ml« TPAEnc rnp) ASPHALT F «BAR p ® CRASS ` h I \ Wq (,J l _ v O \ E VENU \ \ \ HQ'�6�➢�,G 4lBA«5 MR, l0 Ill LQR -u• PAiworr greI«s luwc w.ucao Arc, INu ., ALL AwaK PiNEDPVED WAIAVG WPaEXTY�III@:5. vAY MALL cniEOeu ro mY s oAfR09l SPEUiiGIWNs , lcl KG YwaUE �TAeI ro \ \ ' aiY OF G.4/KOSH, XISCCNAN STANDARD CURB AND GUTTER REPAIR STOP SIG " Ao — A 4E—i— A � - �:�em°e n Asrtw.o, rx¢ SE RW A -A PAVEMENT TIES DETAIL i 9 mra ec�+.r¢c GENO NOTES oam rosirw Q tmvuut me+av a•x tt"V- ® vv pr.oQSrG,ra B � d,oet �xsnrwrwt,m.m�IU S.•ewan �' xsxw -TC x+mrTC xmV TYPICAL CONCRETE PATCH DETAIL STANDARD CURB AND GUTTER REPAIR STOP SIG " Ao — & EHLERS LEADERS IN PUBLIC FINANCE 19 August 2016 Mr Mark Rohloff City Manager City of Oshkosh 215 Church Ave Oshkosh W154901 RE: 105 Washington Avenue Redevelopment Dear Mr, Rohloff, Further to our several conference calls, and per your subsequent request, Ehlers was asked to review and perform an analysis on the following information provided in the Developer's completed Oshkosh TIF application for the 105 Washington Avenue project: • Brief description of project (conversion of historic 29,100sf building into 20 apartments with 20 garage stalls in parking lot) and rationale for same; • Request for partial purchase of City property with City participation to include $87K City reimbursement for the Developer's cost of parking lot renovations for the City (2.25% of total cost); • Developer's sources /uses of funds — Total cost $3.889mm; Developer equity $1.033mm (26.5%), and assumed sale of Historic Tax Credits (HTC) netting $743K (19.1% of total); • PAYGO TIF request for net $471,858 receipts as increment is achieved (TIF is not monetized, so no corresponding debt is reflected). • Developer's revenue and expense projections — Net Cash Flow to Developer Year 11 is just $2,270 with no TIF assistance, and is $26,289 with TIF. Also included with the information was a third -party analysis by Investa Analytics evaluating costs and returns, including a recap of new HTC funds and further detail on the assumptions. The following are some of the conclusions of reviewing the Investa projections: 1) TIF Receipts are included "above the line" in the NOI calculation, thereby inflating reversionary value and IRR; 2) Value (with TIF included in 1101) and 10 year IRR (Year 11 NOI used in reversion) are $2.058mm and (4.22%) respectively, i.e., negative return. Value is 53% of cost; 3) Value (w /o TIF) and Year 10 IRR are $1.758mm and negative (13.68 %). Value is 45% of cost. See Ehlers Review below for additional comment; 4) Cap rate 8.0 %. EHLERS REVIEW: reviewed the information noted above, including spot - checking the Investa calculations and projections. This information was then included in our template to evaluate for adequacy with and without TIF assistance. In our evaluation, the TIF participation was reflected "below the line" as 1- 800 -b52 -1171 1 wv-v ,ehler' - inc.corr & EHLERS LEADERS IN PUBLIC FINANCE additional Developer cashflow, rather than included in the NOI calculation. Additionally, our calculations included replacement reserves in the project operating expenses, which slightly reduced N01. Per the City's TIF application procedures, Year 11 NOI was used in the reversion analysis. The IRR in either event was negative at (11.05 %) with TIF assistance, and (15.15 %) without such assistance. The cash -on -cost return was less than 1.0 %. Both analyses assumed the $87,458 reimbursement by the City for parking lot renovations was contributed. Additionally, given the upscale finishes and nature of the project and its downtown location, we tested cap rate sensitivity by reducing the rate from 8.0% to 7.0% and also 6.0 %. This resulted in IRR's with TIF assistance of (5.73%) at a 7.0% cap, and (1.31%) at 6.0 %. Without TIF assistance, the returns are (8.54%) at the 7.0% cap, and (3.45 %) at a 6.0% rate. It is noted that no cost of sale (commission) was provided in the Developer's analysis, which would further reduce the ultimate project returns. These commissions are usually in the range of 3 -6% of the gross sales price. EHLERS EXCLUSIONS: The information in the Investa report included a fairly comprehensive market comparison for rental rates, resulting in rents ranging from $.85 to $.93 /SF. We did not confirm with outside brokers as to rental rates in the downtown Oshkosh market given the time limitations of the engagement, however based on our experience, and review against the competitive set, these rates appear to be reasonable. CONCLUSION: Based on our analysis and the exclusions noted above, the project returns a negative internal rate of return, even with the TIF, City grant, and HTC participation. However, taking into account the project location and finish level which may ultimately provide for increased rents in the future, we recommend incorporating a "look back" provision in your consideration, pursuant to the City's policy. Copies of our base analysis are included with this letter report. Please let me know if you need additional background or information on this matter. Respectfully, Frank Roman Municipal Advisor Cc: M. Harrigan T. Taves -1-800-552-1171 1 w� -,Y 5. ohlers- inc.ccrr EHLERS q[t3t�'.- 4�+�uAl.s� 1lnhslzF SOURCE$ ..... Developer Financing - Series A - Mortgage or Developer Financing - Series B Developer Financing - Sodas C " ^" -'W� 0.00% DEVELOPER EQUITY - "- 26,58 HTC EQUITY _- 19,10% Subtotal 3,801,633 97.75% Grants - City Parking Lot Reconstruction Cranfs --- - ., ` `� 2,25% 0.00 % Deferred Developer Fee :, 0.00% Fee Waiver , fir;. Other ti 0.00% Subtotal 87.458 2:2690 TOTAL SOURCES 3,888;001 1 #O.gQ"ti Uses ACOUISi7lON COSTS s. 1011.00' Land ` M 5,51% 10,720 Demolition 278% 5,410 Environmental Remadiatton _ 01a0% 1,550 Site ClearancalPreparation 0,77% 1,500 Closing Costs . :_, ........ .:.:. O,DD% - -- 0 CONSTRUCTION COSTS- :.......... ..,.:_ a8g0786- .:74:339L 144;938. Building/Land Impmvementa 73.90% 145,697 Tenant Improvements e 0,00% 0 Permits 0.43% 841 SACIWAC/M8l C SAClUAC 0.00% 0 Park Dedication 0.00% 0 General Requirements � " Conlractors Fee 0,00°1 0 Rullder's Risk 0,bW/ 0 Contingency =- m,„., ^." 0,00% o SOFT COSTS PROFESSIONAL SERVICES 229;Ogp.011. ` ` 5:95% 11.45D Architectural, Engineering & Professional Files .: " 2,741/6 6,335 Site 0.00% 6 Insurance 0.06% 125 Environmental 0,00% 0 Survey 0,00% 0 Historic Tax Credit Consultants 1.31% 2,550 Market Research 0.101/ 200 Marketing 0,131% 250 Appraisals 0.IP% 240 Cost Certilicallon 0,001% 0 LegallAccourtling - Development - 0,351/ 750 Soft Cast Contingency .21.18°5 _ .,. 2,000 FiNANCING COSTS 83,080, A . . 3,150 Construction Period Interest 1,44% 2,800 Issuance Fea" „ 0,00% 0 Underwriter �,:'�^-- �°�`>'� 0,00% 0 Bridge Loan - 0.00% 0 Tula Insurance =° 0,00% O 0.001/. 0 0 Lander Legal Bond Gaunsel �e;s;,, %. �, -,°„ ;,,. 0A01. 0 Trustee 0.00% 0 Mortgage Regis €rallon lax `°��'� rr.: 0.00% 0 Debt 5erv€ca Resena �:rc;�w,� d ..�,' =�'�_ 0.00% 0 Financing Fee R05% 1Do Escrows , '. ,- S;€;: ^%°' nom” : �: �.:� ' "�� �.; oA0% 0 Misc Cot ; � '�. =-.3 0,00% 0 TillelRecordinglMortgage, Registration Tax - ;0 0.13% 250 PERMANEiYTLOAN 0004 0 'ACCRt1E0 EXPENSES � � 0,4096 .. 0, _ :. REAL ESTATE TAXES ' .. �..... m �,.��" ." :- ..0,26% 537. PROJECT MA3JAGEMENT MZ003 :8.02% 15,600.. Developer Fee z,.: Income' Rent - Residential 1 bedroom 2 bedroom 3 bedroom Total Apartment Rental Income Other Residential Income Garage 10 @$80, 10 @$150 Storage Misc Internet Total Other Residential income Gross Revenue Ar)artment Vacancv Loss (stabilized) :Expense Residential Operating Costs Administrative Payroll Marketing Total Utilities Insurance Turnover Total Maintenance Total Residential Operating Management and Other Costs Management Fees Property Taxes Reserves Total Expenses $34,656 $0.93 IL $151,704 $0.96 $24,648 �...�. � . $0.85 17,584 20 $211,008 18,740 $0.94 Rent/Unit . . E ,440 $27,600 $238,608 :11.930.41 6.41% %ofEGI Unit $0 Unit $185 Unit $361 Unit $1,452 Unit $600 Unit $0 Unit $875 Operating Expense Ratio: 43.1% $3,472 $726 $537 $150 cn u 99 LL, O F, Wb 8n7 HE I �2 IM q 5 n ixr7- �0 cNl , 7 cIt of m M 6 dq� 1L30 tl] Iq @{[ ( PEP �� _ n fO m''> a„ $' ` a' Ci g a °o zt A s 8 n 1. dgEi A� A, v7, '66 lei m o o 16 o - o N17 w No o m!q m tp w N Q c7", �gg 0 N 7 7 w M 'i o d li c4 m 4 4. d"Ic 0 9 6. i 00 i a a m o Et j 0 W a z Lu W m 0 m CL f _ a Z U � Ln r mo M(Dooh or m ci cornvcntovLorotp0mhaso m `ma�cr mco�u��o(oMOpM o co �0 NC On NO h t` U) CYI �[OONh,h hhMm h� OONON MO0 Clt hO�NCA(D NrOD in p0 (b O M h r� h (__ m o O N U) Cl) h O � N m >n of M c5 t6 m ;i aLrn p m O dr ' LC co � N r- O rl r tV yr� D u[P (D h C6 Ld 6 N e} • A L6 vo (o co 00 co 54 O (D co oaMOr) Cl O n3"�a»-c%�co tuiY o(n oDOarn Mo ad- o 0000 o Lo O M M co'- 'aarnvcocovtn�0co000 co O co h h h h OD 0) h d' M- OQ lD [+)0M 1' tl SOON �f1 C7 +^Ci�O V�'N"I C -- Oq Lo Co SDO O �i7 h�BNT�D t� r@vVM cq Ihh N f7 h V' 'CAF . V r w M .dh' . M N. �.� .� .� .Nd. r(o � h ccl7 .tY o 4 o hNaoco o m -_ m`�ocrnvna4,0o0OOO"" m O 4o h r, 1, O m `ma�cr mco�u��o(oMOpM o co o 00 O (0 O O (n m U) CYI CO O O N 47 M h C vNN(rihrmom in p0 (b O M h r� h (__ m o O N U) Cl) h O � N m >n N h h aLrn p m O dr ' LC co M Nr "0 ON '' yr� D u[P (D h C6 Ld 6 N e} • A L6 Lfl vo (o co 00 co - r NoPh Cl O .0 0 M OONIgq Mo ad- o 0000 Cfi 00 to N M M co'- 'aarnvcocovtn�0co000 :rT= h CD v 01 SA r OO h o O 10 (CL U7 M O M h (A h h 0 m h m n NI 4) N r OO r(n O co Oh N iii CV W i±�Ntl'i C0 £te r Sa NP- 0 onNOOCi Lr) 04 r V -.: ns -000) V m6ioOOOOOOOtt] . M N. �.� .� .� .Nd. o�o0Da) ti] O � h ccl7 .tY o co o7 N .rM.. 4z M M f• r m (il �2 co I by —MOON ON M"a�m �MtO V'U'S�NOOOOOu Mo m h i~ m m amn hhhmrn v O Q O O O O O o Ci O W r1q hO OD'�&7s Sk UO7 N W OON�+1Mrdhq r (C1 0a0 cpo (n m Y etvY r (n N ai m ri L r a2 c6 V u m (p Nai tQhrto,vM~h W. )^ r r r a Cl) n :. Mo co w No NNnpo -;r 00 -_ m`�ocrnvna4,0o0OOO"" m O 4o h r, 1, O o co Ln Cn O CO Lt7 CO O O N 47 M h C vNN(rihrmom in Q7 a M M'd M r" M Nr "0 ON vo (o co 00 cc ar�q �mnnn�O00000 a NoPh Cl 04 .0 0 M OONIgq L1I Cfi 00 to N M M :rT= h CD v 01 SA r OO h N r (P (O O v r,. v v z -- 0 onNOOCi ors. -.: ns -000) V m6ioOOOOOOOtt] o�o0Da) ti] O � _ mm 0ODhnh CO O O N t[1 M o co o7 N 4z M M f• r m (il �2 co I O Q O O O O O o Ci O W OD'�&7s Sk UO7 N (o _::: pip O O NLf) M 7 In c� ,m N N -- vT N c etvY r (n N ai m ri L r a2 c6 V u o a n l3C � OOOpONMNr00 (9 W 61h r�NCN] O11 I } - T C6 V S�OF a a LU cc LU m cr c Qa�QOQ c F m ul < p m t'�a w u @ yn cDrno N (nv nmr�aDrno ? y, N W N N N N N N N N N N N N M M 7 0 O O O O 0 0 0 0 0 0 0 0 00 v (n �� Oi . W a S N N N N N N N N N N N N N N N CL m �n+nvly M a — '. ai E zrAolir — C Z a ff 0 u 3 o L — r o U '0 nU r � Z N O � L r O V N A z vN r � 2 U z n z �a000 o � r o r m n r: n Cl) co (u (a Ld n v Cj a OF m A ir ir 7. H z° Q 6 0 v uj m R a m L O chill 00 3c LL O fEf im n5'" --jijN `�Sc'm� a�N my nm n�°u _ -1 a; 2 --1 � a �-, & sry Yrya him e� hm Rn � § �- �; g � -�� �J -. . �MA . - air �ovn 2TIMTgn9a;4 . ,df vi �Vl-ma 2 :A 4 r , �:q 0 a< check Developer Financing - Series A • Mortgage Developer Financing - Series 6 � �"' ` ,, - 0.00% Developer Ffnancing - Series C DEVELOPER EQUITYm28 -58% HTC EQUITY - 19,10,16 Subtotal .... _. _....3:90tti831 87.75% Giants - City Parking Lot Reconstruction',:. - 2:25 %4 Grants Io.„"" ==`m 0.00% Deferred Developer Feed 0.00%4 Fee Waiver m. O.Ct% other Subtotal. ., ..,87,456 2.25:6 TOTAL SOURCES 3,BE9,4Sy f 00.40 S6 uses ACRi1[SrTION COSTS - 363;&99 9;88 b ' - 39r180 Land ` 5.511% 10,720 Demolllipn 2.78% 5,410 FnvkormlohlalR9mediallon °# �. 0.80% 1,550 Site CIO ara�lFlepatallon ,„ 0.77% 1,500 closing Costs 0,06% 0 0ONSTRU¢TION COSTS' 2,896,i6t 74,34% 744;538 Building/Land Improvemanis _ 73,80% 143,697 Tenantlmprovumenis ,' - 0.00% 0.43% 0 841 Permits SACMIAClMa €CSACIUAC .�„"°'' _.�'; 0.00% 0.00% 0 0 Park Dedication::' General Requirements,,;., '.,..,.., 0,00% 0 Contractors Fee 0.001% 0 Builder's Risk ,„ 0.00% 0 Contingency x 0.001/6 0 SOFT COSTS PROFESSIONAL$ERVICES- 22904f);40_ 5.89% 11,460 Architectural, Engineering & Professional Fees '' - 2.74% 5,335 Site 000% 0 Insurance'- 006% 125 Environmental �- 0.00% 0 Survey 400% 0 Historic Tax Credit Consultants —:. -� g 1.31% 2,550 Markel Research +� �°^� ::;.s^^- ^ 0,10% 200 Marketing ::- - 0.13% 250 Appraisals 0.12% 240 Cast Certification 0 -00% 0 LegaUAocounting - DOVOlapmenl ��+.� -. _ ":'.,r'' 0.39% 750 Soft Cos! Contingency ,QMM 21,16% 2,000 FINANCINO.COSTS 83;44© *.62% 3,180 Construction Period Interest, _W 1.44% 2,80f1 issuance Fee Underwriter 0.00% 0 Bridge Loan „.. 0,00% 0 Title Insurance -. 0.06 0 Lender Legal Bond Counsel � �.,. 0.00% 0,60% 0 0 Trustee..,�,� 0,00% 0 Mortgage Registration Tax ,ws �- ..... Debi Service Reserve 2 6,00% 0,05% 0 100 Financing Fee ,.,.,,. ,. 0 Escrows 0,00% MIsc001 Tax = 0,061/. 0.131% 0 250 TitIa1RecordinglNbrtg8ga Registration PERMANENT:LOAM s - 11.469y 0 At:GAU @O @7(PEN3>s8 0.00% 0 REAL 98TATE TAXES Y3 6,2896 837 PROJECT- MANA13EMENT 312 003 $•4?95 ' 16,800 Developer Frio �' 7 802% 15,500 CASH ACCOUNTS a 0 -00% o Inputted Expenses Working Cap ` 0,00°.6 0.00% 0 0 Management Start up '� :,:: 0,00% TOTAL USES .3,889.091 194,458 0 a< check Income s Expense Rent - Residential a - 1 bedroom $34,656 - $0.93 2 bedroom $151,704 rvy $0.96 3 bedroom Payroll $24,648 Unit $0.85 ,Total Apartment Rental Income 17,584 20 $211,008 18;740 $0.94 Unit $1,452 Rent/Unit 879.2 ;Other Residential Income $600 Turnovers Unit Garage 10 @$80, 10 @$150 Total Maintenance w Wj Unit $875 Storage $69,440 y $3,472 Management and Other Costs Misc Management Fees�I 6.41% % of EG I Internet_ $726 Property Taxes Total Other Residential Income Reserves $27,600 $150 Gross Revenue $97,693 $238,608 $4,885 Apartment Vacaticv Loss (stabilized) ($11,930.40} Operating Expense Ratio: 43,11% Expense Residential Operating Costs - Administrative Unit $0 Payroll Y Unit $185 Marketing.. Unit $361 Total Utilities Unit $1,452 Insurances Unit $600 Turnovers Unit $0 Total Maintenance P -z Unit $875 Total Residential Operating $69,440 $3,472 Management and Other Costs Management Fees�I 6.41% % of EG I $726 Property Taxes $537 Reserves t{% $150 Total Exnenses $97,693 $4,885 Operating Expense Ratio: 43,11% lA. W' 7 7 LLI d o - O! p c y s U t" -. pmp qmq Qryy o C[y ON0 ��C�'1NM� ��pp h+fIn'J r- 1S Q�rCF .._ f" 00 M C�'1 YP O i0 YL OO tnY �7. g M N p .• n �mPl Y vY (i�N Jq di C4 n_ fO IQ. t') OOOt'3 f� No. Cp oo �y a 770— N CY ~ ! 4V .o°o oMr��OT is Fa us N and Nr1 tSt�'A V t N NAM N. {Y ty4t' 01. b Jp Y ©• O �.. Vl $ <L .• (�+r�i @, p� d Q C1) 10 T- N f� m to m ° ' 4 ail I� N � ; r°r.,. � m �' P 1�3 � � � 9 s�,. i�. � lR .: o 6 N umi m c4-r: ea N M W ifl IIIIFI .��mxo m Y: ��p ®Q m N w4-. P vr; •� -.C+� ,t !c oo .M f� Q A ti N Q ilf� N �.N �.•!lw�� INf� YO b` .24 m t� n�rv'i�H ;+} llf,,_: iiTT+i ry v'. 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A statement listing of 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)(f)l.k. and 66.1105(2)(f)l.n., 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; 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 August 2, 2016 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. NOW, THEREFORE, BE IT RESOLVED by the Plan Commission of the City of Oshkosh that: It recommends to the Common Council that Tax Incremental District No. 30 be created with boundaries as designated in Exhibit A of this Resolution. 2. It approves and adopts the Project Plan for the District, attached as Exhibit B, and recommends its approval to the Common Council. 3. Creation of the District promotes orderly development in the City. City of Oshkosh Wisconsin TID No. 30 Plan Commission Resolution Adopted this I6 th day of A„g„ gt 52016. rtx- Plan CjorWssion Chair 0 %Y , 0 J j -5a i3-S-1 Secretary of the Plan Commission City of Oshkosh Wisconsin TID No. 30 Plan Commission Resolution EXHIBIT A - LEGAL BOUNDARY DESCRIPTION OR MAP OF TAX INCREMENTAL DISTRICT NO. 30 CITY OF OSHKOSH TID 30 LEGAL DESCRIPTION PARTS OF LOTS A ND B AND ALL OF C IN G. PAPENDIEK'S PLAT, LOTS 1 THROUGH 4 AND PART OF LOT 5 IN BLOCK 26 OF L.M. MILLER'S FIRST ADDITION, PARTS OF WASHINGTON AVENUE, STATE STREET AND WAUGOO AVENUE, ALL LOCATED IN THE NORTHEAST X OF THE SOUTHWEST X, SECTION 24, TOWNSHIP 18 NORTH, RANGE 16 EAST, CITY OF OSHKOSH, WINNEBAGO COUNTY, WISCONSIN BOUNDED AND DESCRIBED AS FOLLOWS: COMMENCING FROM THE NORTHWEST CORNER OF SAID SECTION 24, TOWNSHIP 18 NORTH, RANGE 16 EAST; THENCE SOUTH 00 °15'31" EAST, 23.88 FEET ALONG THE WEST OF THE SOUTHWEST Y4 OF SAID SECTION 24; THENCE NORTH 89 °56'16" EAST, 1,643.89 FEET TO A POINT ON THE APPROXIMATE CENTERLINE OF STATE STREET AS CONSTRUCTED AND ALSO BEING THE POINT OF BEGINNING; THENCE NORTH 24 °35'03" WEST, 31.07 FEET ALONG SAID CENTERLINE TO A POINT ON THE NORTH LINE OF THE SOUTHWEST X OF SAID SECTION 24; THENCE NORTH 89 °56'16" EAST, 278.42 FEET ALONG SAID NORTH LINE OF THE SOUTHWEST X OF SECTION 24; THENCE SOUTH 00 °03'44" EAST, 29.02 FEET TO A POINT ON THE SOUTH RIGHT -OF -WAY LINE OF WASHINGTON AVENUE; THENCE SOUTH 04 °59'29" EAST, 75.50 FEET TO A POINT ON THE EAST LINE OF LOT B OF PAPENDIEK'S PLAT; THENCE SOUTH 00 °45'40" EAST, 23.77 FEET ALONG SAID EAST LINE TO THE SOUTHEAST CORNER OF SAID LOT B; THENCE NORTH 76 °35'16" WEST, 5.80 FEET ALONG THE SOUTH LINE OF SAID LOT B TO THE NORTHEAST CORNER OF LOT C OF SAID PAPENDIEK'S PLAT; THENCE SOUTH 13 °24'44" WEST, 50.00 FEET ALONG THE EAST LINE OF SAID LOT C TO A POINT ON THE NORTH LINE OF LOT 10F L.M. MILLER'S FIRST ADDITION; THENCE SOUTH 76 °35'16" EAST, 89.20 FEET ALONG LOTS 1, 4 AND 5 OF SAID OF L.M. MILLER'S FIRST ADDITION; THENCE SOUTH 13 °24'44" WEST, 155.70 FEET TO A POINT ON THE CENTERLINE OF WAUGOO AVENUE; THENCE NORTH 76 °35'16" WEST, 270.35 FEET ALONG SAID CENTERLINE TO A POINT ON THE APPROXIMATE CENTERLINE OF STATE STREET AS CONSTRUCTED; THENCE NORTH 14 °16'31" EAST, 40.68 FEET ALONG SAID CENTERLINE TO THE BEGINNING OF A 188.79 FOOT RADIUS CURVE TO THE LEFT; THENCE 128.04 FEET ALONG SAID CURVE, ALSO BEING THE APPROXIMATE CENTERLINE OF STATE STREET AS CONSTRUCTED, WHOSE CHORD BEARS NORTH 05 °09'16" WEST, 125.60 FEET; THENCE NORTH 24 °35'03" WEST, 99.97 FEET ALONG SAID CENTERLINE TO THE POINT OF BEGINNING. SAID AREA CONTAINS 80,480 SQUARE FEET OR 1.848 ACRES, MORE OR LESS. THIS CAN BE FOUND IN THE PROJECT PLAN City of Oshkosh Wisconsin TID No. 30 Plan Commission Resolution ITEM: PUBLIC HEARING AND APPROVAL OF RESOLUTION FOR CREATION OF TAX INCREMENT FINANCING DISTRICT NO. 30 WASHINGTON BUILDING REDEVELOPMENT; DESIGNATION OF BOUNDARIES AND APPROVAL OF PROTECT PLAN Plan Commission meeting of August 2, 2016 Prior to taking action on proposed Tax Increment District (TID) No. 30 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. 30. 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: Discovery Properties LLC Property Owner: Discovery Properties LLC Actions Requested: Public hearing on creation of TID No. 30 and approval of resolution to create TID No. 30 Project Plan and designate boundaries for TID No. 30. GENERAL BACKGROUND TID No. 30 is being created to facilitate and support the historic rehabilitation of 105 Washington Avenue (aka. Fraternal Reserve Association Building) as an adaptive reuse project from office usage to residential apartments. Specifically, the 5 story 29,100 square foot structure is being rehabilitated to create 20 "higher end" residential apartment units that will rent from $700 - $1100. The total project costs to facilitate this rehabilitation are approximately $3.9 million or approximately $195,000 per unit. TIF in this instance is being requested as a development incentive to facilitate construction of garages on a portion of the adjacent city parking lot (State Street Lot) as well as being used to offset reconstruction of the remaining parking lot area that will be used for public parking (those actions will require additional Plan Commission and Common Council action as project plan implementation items). Proposal TIF, in the form of Paygo, is being requested to help support rehabilitation of 105 Washington Avenue to create 20 higher end apartment units with rents approaching $1100 -$1200 range for some of the units. Specifically in this case TIF will be used to allow construction of 20 garage units that will be rented at $80 (single stall) to $150 (double stall) per month. Enclosed off street parking is an important component in creating a housing product that is not currently offered in large quantities proximate to the core downtown Main Street environment. The only comparable higher end housing product in the area (not including the Marion Road area) would be the 100 block which is newer higher end housing product (i.e. higher end finishes or amenities) with underground parking. There are some newer townhouses and apartments (some with garages) that have been recently constructed along Division Street but those would not be considered to be "high end" units as is proposed with the Washington Building redevelopment. Dozens of units have been developed over Main Street store fronts (some higher end) but virtually all lack any kind of enclosed parking. This project as proposed adds an amenity to the downtown housing stock that is not currently available in widespread numbers and is something that staff has heard time after time that is a much needed product from stakeholders in the community. The other significant component of this project involves reconstruction of the remaining portion of the overall parking lot that will be retained for public parking with about 20 parking spaces being retained for public use. The cost of reconstructing the city retained portion of the parking lot is approximately $147,000 and the value of the parking lot to be acquired by the developer is approximately $60,000 or a difference of about $87,000 which is being requested as the city contribution towards the parking lot's reconstruction. Staff believes that this a reasonable consideration and thus including that as a potential project cost in the Project Plan. It should be noted that repayment of this cost would come from increment generated by the new development and would be the first cost to be recovered from generated tax increment prior to any paygo payments being made to the developer. Type of District, Size and Location Tax Incremental District No. 30 (the "TID" or "District ") is a proposed one acre district in need of rehabilitation or conservation located in downtown Oshkosh at the intersection of Washington and State Street. The proposed District will be created to help support a proposed renovation of the Fraternal Reserve Association Building located at 105 Washington Avenue involving conversion of roughly 29,100 sq. ft. of vacant commercial space to twenty residential apartment units. The District also includes a public parking lot currently owned by the City which will be partially converted to enclosed private parking, and an additional commercial building located at 300 State Street which could potentially be rehabilitated in the future. Estimated Total Project Expenditures The City anticipates making total Project Cost expenditures of approximately $680,000 to facilitate rehabilitation of 105 Washington Avenue including an estimated $530,000 for development incentives, $88,000 for parking lot reconstruction (with the developer paying the balance of the parking lot reconstruction) and the balance for administrative expenses and payment of interest on funds expected to be advanced to the District to cover necessary expenditures prior to establishment of the District's increment revenue stream. No specific Project Costs are identified for 300 State Street; however, the City would expect to make available appropriate development incentives or other assistance at the time a rehabilitation project is proposed without further amending this Plan. Item - Creation of TID #30- Washington Bldg Redev The proposed Plan is in general conformance with the City of Oshkosh's present zoning and no changes are anticipated to the Plan area's C -3 Central Commercial zoning to implement the Plan. The proposed Plan is in general conformance with the City of Oshkosh's Comprehensive Plan identifying the area as appropriate for mixed downtown development. All development within the District will be required to conform to the 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, thus, no changes to the existing regulations are proposed or needed. The Project Plan includes a statement listing the kind, number, and location of proposed improvements. 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. ANALYSIS The developer would be receiving (after any public infrastructures and administrative costs are paid) a development incentive of approximately $530,000 (estimate) that will be provided over the life of the district. The development incentive will facilitate construction of the garages, as well as reconstruction of the retained city parking lot area, that will make the project more financially viable and increase the project's Return on Investment ROI/IRR from - 13.68% without TIF to -4.22% with TIF (see Appendix B of the TID No. 30 Project Plan for ROI analysis) attached. Without this TIF, no garages will be built because it simply is not financially feasible to do so without the support to increase the IRR. Additionally, as the city parking lot is in need of repair, the city would have to undertake those reconstruction costs which would approach $700,000 that would likely become a general city obligation and paid for through the property tax. Additionally, lands formerly tax exempt under public ownership will be added back to the property tax roll and will have both land and improvement value that will eventually fully contribute to the overall property tax roll once the TIF is terminated. As a result of the creation of this District, the City projects that additional land and improvements value of approximately $1.3 million will be created as a result of the rehabilitation project and subsequent economic appreciation. This additional value will be a direct result of the improvements made and projects undertaken within the District. A table detailing assumptions as to the timing of development and associated values is located in Section 10 of the Project Plan. Approval of this TIF Project Plan does not constitute approval of any activities identified in the project plan that may require other city review and approvals. The TIF plan is simply a financing mechanism to help facilitate redevelopment activity contemplated in the Plan. A separate development agreement will have to be approved by the Common Council prior to any payments being made to the developer. Disposing of the public parking lot will also require separate action by the Plan Commission and Common Council. Once approved, staff would move forward with further plan implementation. Item - Creation of TID #30- Washington Bldg Redev Should the Plan Commission (or Council, or Joint Review Board) not approve the resolution approving this Project Plan, the TIF will not move forward. RECOMMENDATIONS /CONDITIONS Staff recommends approval of the resolution for the Project Plan and designation of Boundaries for TID #30 as proposed. The Plan Commission approved the Project Plan and designation of Boundaries as requested. The following is the Plan Commissions discussion on this item. Mr. Burich presented the item and discussed the history of the structure and explained the reason for the creation of the proposed tax increment financing district. He reviewed the subject site and the area to be included within the district boundaries and discussed the area of the parking lot to be used for the garages for the apartment building and the remaining area which would remain as public parking. He also discussed the downtown apartment products available and explained that no higher end units have been developed in this area. He explained the mixed use structures that provide apartment dwelling units over commercial uses on the first floor in the downtown area and reviewed a map depicting the downtown apartment developments and their location. He discussed the quality of the housing units developed in recent years and the reconstruction of the parking lot which will be rebuilt as part of the TIF project. He also discussed project cost expenditures which would be an estimate of $530,000 for development incentives for the life of the TIF and $88,000 for the parking lot reconstruction. He also explained that the reason for the TIF assistance request was to increase the internal rate of return (IRR) which would be close to -14% without the TIF and 4% with the financial incentive. He further discussed the costs to the city to reconstruct the State Street parking lot without the creation of the TID which would be $700,000 and the success of a high end apartment development which is not feasible in this climate without garage facilities. He continued to discuss the benefits of these types of units in this area as it will bring in higher income households into the downtown vicinity which would assist in the revitalization of this area. He reviewed the site and surrounding area as well as the land use and zoning classifications in this area, the TID boundaries and photos of the subject site. Mr. Thorns questioned if this area was considered to be blighted. Mr. Burich responded that there are two different standards for this determination and that this area was considered to be in need of conservation and rehabilitation. Mr. Thoms then questioned if the area within the TID was all zoned C -3 Central Commercial District. Mr. Burich responded affirmatively. Mr. Thorns also questioned what the City's Comprehensive Plan designated for land use in this area. Item - Creation of TID #30- Washington Bldg Redev Mr. Burich responded that the area is designated as downtown or mixed downtown development which includes residential development and is compatible with the City's Comprehensive Plan. Mr. Thoms inquired about the negative IRR that would result even after the TIF assistance and why the development incentive was not higher to at least increase the IRR to a positive figure. Mr. Burich replied that it did not appear to be feasible and discussed the values and historic tax credits and that even with financial assistance the developer was not going to be able to achieve a positive IRR figure with this project. Mr. Thoms inquired about what would occur if the Commission recommends approval for the creation of the TID and the developer decides to not move forward with this project. Mr. Burich responded that the city could look to capture value to reconstruct the parking lot for public use or just not move forward with the TIF at all. Mr. Thoms questioned if there was any thought to utilizing two -story parking garages with both public and private use as the garage concept was taking out more public parking and creating private parking for the apartment use. Mr. Burich indicated that the City did a study and analysis of the parking lot use last year and the average number of stalls utilized was 9.8 on a daily basis which showed the lot was underutilized and there is not the traffic generation in this area to support full use of this parking lot and the remaining public stalls would be adequate for public use. Mr. Thoms inquired if the parking lot was close enough to the riverwalk for it to be utilized for the purpose of access to the riverwalk area. Mr. Burich responded that there were several hundred parking stalls closer to the riverwalk that could be utilized for that purpose and the costs for a mixed use parking structure was too high to be feasible. The Parking Utility also reviewed the proposed change to the lot and was supportive of the change to private use for the portion necessary for the garage units. Mr. Hinz discussed the redevelopment area and if there were any plans in the works for 300/302 Waugoo Avenue as it was part of the TIF district and how this property would be affected by the creation of the district. Mr. Burich replied that this property was included in the district to balance out the TIF project and would provide a mechanism to potentially redevelop the site without amending the plan. Ms. Lohry stated that she felt this was a good idea but questioned if it would be conceivable to have some of the parking facilities underground as it would provide a way to create more green space. Item - Creation of TID #30- Washington Bldg Redev Mr. Burich discussed the renovations planned for the William Waters Plaza on the corner of the district which will provide for upgraded green space and that the parking lot reconstruction would require some landscaping features to meet current code requirements. Mr. Bowen inquired if the parking garages on the site have been approved or would the plans need to come back to the Commission at a later date for approval. Mr. Burich responded that it is not a planned development but the land disposition would be required to be reviewed by the Commission. Mr. Cummings left at 4:25 pm. Mike Goudreau, 4482 Harbor Village Drive, Omro, developer for the project, discussed the historic designation of the structure and that they purchased it with the intent to renovate it into apartment units. He discussed the extensive work done to the interior and the high quality of the interior features and that the design of the apartments maintains the integrity of the original structure. He further discussed the challenges presented to the project and that they had anticipated a higher rate of return however it did not work out. He stated that the type of residents they anticipated to attract such as empty nesters or young professionals were considered while they completed studies on this development however these potential renters will not be interested in renting higher end apartment units without the garage amenity. Ms. Lohry again questioned if underground parking facilities would be possible. Mr. Goudreau responded that underground parking facilities were too cost prohibitive and discussed the current and future access points to the parking lot and the areas to be utilized for more green space. Dennis Ruedinger, 1434 Hazel Street, stated that he was a contractor working on this project and that it was very refreshing to work on such a development as it was not usual to continue to move forward with a project that is not producing positive revenue figures. He continued to discuss the historical feeling of the structure and the need for garages for this development to make it successful. Motion by Vajgrt to approve the creation of Tax Increment Financing District #30 Washington Building Redevelopment and designation of boundaries and project plan. Seconded by Thoms. Motion carried 7 -0. Item - Creation of TID #30- TVashington Bldg Redev Tax Increment District #30 ^A Washington Building Redevelopment �,of Map 1 - District Boundary Oshkosh N O N Q' w U-. Li- w V 1 OTTER AVE 1 �l ti i H N z O z fy- AVE MLegend TID #30 Boundary 0 25 50 We x FEEL JUIY.2 ()16 �1J TIF 30 WASHINGTON BUILDING BBLD LLC CITY OF OSHKOSH PC: 08 -02 -16 PO BOX 800 PO BOX 1130 OSHKOSH WI 54903 -0800 OSHKOSH WI 54903 -1130 DISCOVERY PROPERTIES LLC 230 OHIO ST STE 200 OSHKOSH WI 54902 -5825 KIECKHAFER REV TRUST H A/P D 702 E IRVING AVE OSHKOSH Wl54901 -4643 WINNEBAGO COUNTY PO BOX 2808 OSHKOSH WI 54903 -2808 GANNETT MIDWEST PUBLISHING INC s 7950 JONES BRANCH DR MC LEAN VA 22102 -3302 MASONIC BLDG ASSN 204 WASHINGTON AVE OSHKOSH WI 54901 -5030 404 N MAIN ST LLC 601 OREGON ST OSHKOSH WI 54902 -5965 JACOPA INC 25 WAUGOO AVE OSHKOSH WI 54901 -4848 PAUL E REDEMANN III PO BOX 481 OSHKOSH Wl54903 -0481 E-j NGTON AUGOO,AV 106 z 0 40& 123 IN 0 1 in = 0.02 mi . . . . . . . . . . ----- ----- I in 100 ft ................ The City of Oshkosh creates and mainta!bs GIS maps and data for its myn use. They may show the approximate relative location of property, boundaries and other feature from a variety of sources. Prinfing Date: 712012016 These map(sydatasets are provided for Information purposes only and may not be sufficient or appropriate for legal, engineering, or surveying purposes. They are provided 'AS-IS' Mhout Prepared by: City of Oshkosh, W1 warranties of any kind and the City of Oshkosh assumes no liability for use or misuse. tow VA N P citv� Oshkosh J-.QS0ann!ngLF1an Commission Silo Ran Map Ternp!alakRan Com6ssion Site Plan MapTemplalemd Uw. kAb 7 Exhibit B July 27, 2016 40 EHLERS LEADERS IN PUBLIC FINANCE Project Plan Tax Incremental District No. 30 City of Oshkosh Organizational Joint Review Board Meeting Held Public Hearing Held: Consideration for Approval by Plan Commission: Consideration for Adoption by Common Council: Scheduled for August 2, 2016 Scheduled for August 2, 2016 Scheduled for August 2, 2016 Scheduled for August 23, 2016 Consideration for Approval by the Joint Review Board: TBD E 0 1 -BW- 552 =1171 1 wwwohlers-inc_c Project Plan Tax Incremental District No. 30 City of Oshkosh Officials Common Council Steve Cummings Debra L. Allison -Aasby Caroline Panske Lori Palmeri Thomas R. Pech, Jr. Steve Herman Ben Stepanek City Staff Mark Rohloff Allen Davis Darryn Burich Trena Larson Pamela Ubrig Lynn Lorenson Plan Commission David Borsuk Edward Bowen Thomas Fojtik, Chair Ben Krumenauer John Hinz Joint Review Board Mark Rohloff, City Manager Mark Harris, County Executive Melissa Kohn, Director — Oshkosh Campus Allison Garner, School Board President Mayor Deputy Mayor Council Member Council Member Council Member Council Member Council Member City Manager Community Development Director Planning Director Finance Director City Clerk City Attorney Donna Lohry Karl Nollenberger Kathleen Propp Jeffrey Thorns Robert Vajgrt City Representative Winnebago County Fox Valley Technical College District Oshkosh Area School District Public Member WE 0 - 1 -BW- 552 -1171 1 www.ehlers-lnc-com Table of Contents EXECUTIVE S U M MARYttttittttttttttttttttttttttttttttitttttttti tttttttti ttttttttttttttitttttttttttttttttttttttt ittttttttttttttttttttttttttttttttittitttttttttti 9 TYPE AND GENERAL DESCRIPTION OF DISTRICTi tttttttttttttttttttttttttttttttttttttttttttttt ittttttttttttttttttttttttiitttttttttttttt cs PRELIMINARY MAPS OF PROPOSED DISTRICT BOUNDARY? tttttttttttttttttttttttttt itttttttttttttttt11111111111itti4 MAPS SHOWING EXISTING USES AND CON DITIONSitttttttttttttttttttttttttttttttttttttttttttt itttttttttttttttttttttttttttttttttttti'. PRELIMINARY PARCEL LIST AND AN ALYS I Sitttttttttttti tttttttttttttttttttttttttttttttttttttt ittttttttitttttttttttttttttttttttttttttttttttti �' EQUALIZED VALUE TESTiiiiiiittittiiiiiittiiiiiittiiitttttttttttttttti tttttttttttttttttttttttttttttttttttttt ittttttttitttttttttttttttttttttttttttttttttttti9� STATEMENT OF KIND, NUMBER AND LOCATION OF PROPOSED PUBLIC WORKS AND OTHER P ROJ ECTSitttttttttttttttttttttttttt itttttttttttttttttttttttttttttttttttttti tttttttti tttttttttttttttttttttttttttttttttttttt ittttttttitttttttttttttttttttttttttttttttttttt 99 MAPS SHOWING PROPOSED IMPROVEMENTS AND USESi tttttttttttttttttttttttttt ittttttttttttttttttttttttttttttttttttttttttsLS DETAILED LIST OF PROJECT COSTStttttti tttttttttttttttti ttttttttitttttttttttttttttttttttttttttt ittttittittttttttttttttttttttttttttttttttitttti9L" ECONOMIC FEASIBILITY STUDY, FINANCING METHODS, AND THE TIME WHEN COSTS OR MONETARY OBLIGATIONS RELATED ARE TO BE INCURREDiiitttttttttttttttttttttttt itttttttt11111111111111ii -9. ANNEXED P RO P E RTYttttttittttttttttttttttttttttttttttitttttttti tttttttti ttttttttttttttitttttttttttttttttttttttt ittttttttttttttttttttttttttttttiitttttttttttti 9s ESTIMATE OF PROPERTY TO BE DEVOTED TO RETAIL BUSINESStt ittttttttttttittttttttttttttttitttttttttttttttttttti99 PROPOSED ZONING ORDINANCE C HAN G Esiitti tttti ttttttttttttttttttttttitttttttttttttt ittttttttittttttttitttttttttttttttttttttttttttttt 99 PROPOSED CHANGES IN MASTER PLAN, MAP, BUILDING CODES AND CITY OF OSHKOSH O R D I N A N C E S itttttttttttttttttttti tttttttttttttttttttttttttttttttttttttti tttttttti tttttttttttttttttttttttttttttttttttttt ittttttttittttttittitttttttttttttttttttttttttt 99 R E L O CAT I O N itttttttttttttttttttti tttttttttttttttttttttttttttttttttttttti tttttttti tttttttttttttttttttttttttttttttttttttttttttttttt ittttttitttttttttttttttttttttttttttti 99 ORDERLY DEVELOPMENT OF THE CITY OF OSHKOSHi tttttttttttttttttttttttttttttttttttttt ittttttttittttttiiitttttttttttttttttti9s LIST OF ESTIMATED NON - PROJECT COSTSi tttttttttttttttttttttttttttttttttttttttttttttttt ittttttttittttttttttttttttttttttttttttttttttttii9s OPINION OF ATTORNEY FOR THE CITY OF OSHKOSH ADVISING WHETHER THE PLAN IS COMPLETE AND COMPLIES WITH WISCONSIN STATUTES 66. 1105i1111111itttttttttttttt1111111111ttii9Ls CALCULATION OF THE SHARE OF PROJECTED TAX INCREMENTS ESTIMATED TO BE PAID BY THE OWNERS OF PROPERTY IN THE OVERLYING TAXING JURISDICTIONS7111111111111111111i94 APPENDIX A — TAX INCREMENT FINANCING APPLICATION ......................... .............................9's APPENDIX B — MARKET STUDY AND INVESTMENT ANALYSIS REPORT (INVESTA- ANALYTICS) .... 38 SECTION 1: Executive Summary Description of District Type of District, Size and Location Tax Incremental District No. 30 (the "TID" or "District ") is a proposed one acre district in need of rehabilitation or conservation located in downtown Oshkosh at the intersection of Washington and State Street. The proposed District will be created to help support a proposed renovation of the Fraternal Reserve Association Building located at 105 Washington Avenue involving conversion of roughly 29,100 sq. ft. of vacant commercial space to twenty residential apartment units. The District also includes a public parking lot currently owned by the City which will be partially converted to enclosed private parking, and an additional commercial building located at 300 State Street which could potentially be rehabilitated in the future. A map of the proposed District boundaries is located in Section 3 of this plan. Estimated Total Project Expenditures The City anticipates making total Project Cost expenditures of approximately $680,000 to facilitate rehabilitation of 105 Washington Avenue including an estimated $530,000 for development incentives, $88,000 for parking lot reconstruction and the balance for administrative expense and payment of interest on funds expected to be advanced to the District to cover necessary expenditures prior to establishment of the District's increment revenue stream. No specific Project Costs are identified for 300 State Street, however, the City would expect to make available appropriate development incentives or other assistance at the time a rehabilitation project is proposed without further amending this Plan. Economic Development As a result of the creation of this District, the City projects that additional land and improvements value of approximately $1.3 million will be created as a result of the rehabilitation project and subsequent economic appreciation. This additional value will be a direct result of the improvements made and projects undertaken within the District. A table detailing assumptions as to the timing of development and associated values is located in Section 10 of this Plan. In addition, creation of the District is expected to result in other economic benefits as detailed in the Summary of Findings hereafter. Expected Termination of District Based on the Economic Feasibility Study located in Section 10 of this Plan, this District would be expected to remain open for 25 years of its 27 year maximum statutory life. Summary of Findings As required by Wisconsin Statutes Section 66.1105, and as documented in this Project 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 Project Plan: 1) would not occur; or 2) would not occur in the manner, at the values, or within the timeframe desired by the City. In making this determination, the City has considered the following information: • The economics associated with rehabilitation projects which typically involve additional costs such as abatement of hazardous materials, utility relocations, use of high end fmishes needed to Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 1 July 27, 2016 attract tenants, provision of adequate off - street parking through the construction of garages, and other similar costs. As such, the City believes that these sites are not likely to be redeveloped under normal market conditions without public investment and participation. 2. The economic benefits of the Tax Incremental 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 the following information: As demonstrated in the Economic Feasibility Section of this Project Plan, the tax increments projected to be collected are sufficient to pay for the cost of the development incentives and other related Project Costs needed to facilitate the desired rehabilitation work. • The rehabilitation expected to occur within the District will create 20 residential units, providing housing opportunities for City residents. • It is expected that the rehabilitation project will create a 0.5 Full -Time Equivalent (FTE) position for property management and another 0.5 FTE position for property maintenance. 3. The benefits of the proposal outweigh the anticipated tax increments to be paid by the owners of property in the overlying taxing jurisdictions. If approved, the District's creation would become effective for valuation purposes as of January 1, 2016. As of this date, the values of all existing real and personal property within the District would be frozen and the property taxes collected on this base value would continue to be distributed amongst the various taxing entities as they currently are now. Taxes levied on any additional value established within the District due to new construction, renovation or appreciation of property values occurring after January 1, 2016 would be collected by the TID and used to repay the costs of TIF- eligible projects undertaken within the District. Since the development expected to occur is unlikely to take place or in the same manner without the use of TIF (see Finding 91) and since the District will generate economic benefits that are more than sufficient to compensate for the cost of the improvements (see Finding #2), the City reasonably concludes that the overall benefits of the District outweigh the anticipated tax increments to be paid by the owners of property in the overlying taxing jurisdictions. It is further concluded that since the "but for" test is satisfied, there would, in fact, be no foregone tax increments to be paid in the event the District is not created. As required by Section 66.1105(4)(1)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 made and can be found in Appendix A of this plan. 4. 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)(b). 5. Based upon the finding stated above the District is declared to be a District In Need of Rehabilitation of Conservation based on the identification and classification of the property included within the District. 6. The Project Costs relate directly to promoting rehabilitation or conservation consistent with the purpose for which the District is created. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 2 July 27, 2016 7. The improvement of such area is likely to enhance significantly the value of substantially all of the other real property in the District. 8. The equalized value of taxable property of the District, plus the value increment 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 less than 35% 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 Sections 66.1105(5)(b) and 66.1105(6)(am)1. 10. The Project Plan for the District in the City is feasible, and is in conformity with the master plan of the City. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 3 July 27, 2016 SECTION 2: Type and General Description of District The District, comprising one acre in downtown Oshkosh at the intersection of Washington and State Street, is being created by the City under the authority provided by Wisconsin Statute Section 66.1105 and will be classified as a district "in need of rehabilitation or conservation" based on a finding that at least 50 %, by area, of the real property within the District meets that condition as defined in Wisconsin Statute Section 66.1337(2m)(a). The preliminary parcel list included in Section 5 to this Plan identifies those parcels meeting those criteria. Collectively, these parcels represent 100% of the total District area. Creation of the District is intended to facilitate achievement of the City's project goals and desired outcomes for this area by providing the means to pay the necessary costs needed to incentivize the developer to undertake the rehabilitation project. A preliminary map of the proposed District boundary can be found in Section 3 of this Plan. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 4 July 27, 2016 SECTION 3- Preliminary Maps of Proposed District Boundary 18B Tax Increment District #30 AM Washington Building Redevelopment District Boundary Oshkosh 16 I 2� z O LU L z LU O z U U 7 I 106 5 9 11 13 17 19 25 3 12� ti 4 i i 7 TER AVE - 112 -105 i 115 k I L204 123 220 219- 215 Legend ®TID #30 Boundary 0 25 50 100 Feet wE July, 2016 Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 5 July 27, 2016 Tax Increment District #30 Washington Building Redevelopment cliAFA Parcel Identification Oshkosh Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 6 July 27, 2016 Tcix Increment #30 - Washington Building Redevelopment - Parcel Identification Map ID Parcel N Owner Local Address Land Value 1, rov. Value To Vulue Equalized Value Class Description Dwelling Units Census Traci coning 1 02- 0088 -0000 DISCOVERY PROPERTIES LLC IC15 WASHINGTON AVE $42,000 $358,000 $440,000 $440,000 B WASHINGTON "ILDING 0 5 C -3D0 2 02- 0062 -0000 CTY OF OSHKOSH 0 STATE ST 0 0 0 4 STATE STREET PARKING LOT 0 5 C -3D0 3 02- 0064 -0000 KIEC KHAFER REV TRUST H A /PD 300 STATE ST $161100 $105,900 $122,000 $122,000 B ADVANCE OFFICE SYSTEMS 0 5 0-31)0 TOTALS, $58,100 $503,900 $562,000 $562,000 W n P LL w El Z 0 Z I > L H i 2 204 220 I 105 1.05 l 115 — 219 2 20- 3 2pq 5 9 11 13 13 17 19 25 -A � ` y� rn 123 215 �1 r' IR --r) Legend o --- - - - - -- IV! �' < .TIC #30 Boundary 50 100 � orr � A ✓� 172 �' ,11 w E I J uIy,2016 Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 6 July 27, 2016 SECTION 4- Maps Showing Existing Uses and Conditions OV a c Y E 0- o a as v m 4a O c � a IInn X U > 41- 0,:, UJ 111 E co 0 W UU�1 V> J L�1 C O � (D +- 1` m cn O W X } C cf] Z—(47 Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 7 July 27, 2016 rrlrrlarrlrl iiiiii —Nowe r� LIJ � • 1 !il NfI3RS Ulf nl rn�,ull li7 Rirllfi4l a ru Illll nul �rrrl Isla Gi [ 1131 e'i Bi Bllc71 4U� -. R�PUrI .. iI1J ii \II ►1 1111 ■ ■11111 rr it i]7 1i. iwlrl illll X1111 ' Illll�%l 1M11I1R7Pr 1151M3 11811 N W11 i.7i.7 lllllkl1� lil 0 ..l 111YlYll rllllll' 111lt�1•111{I - lllill W'ENCEti ON!il• S4 :. ►MI PJ31 all &O. anvil lll� Ff satrart ... C`r.... ...ru.0 �� fifli l 9N o Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 7 July 27, 2016 Tax Increment District #34 Washington Building Redevelopment Cuo7' Existing Conditions Oshkosh .rte t 6 T E 105 Area Blighted, Underutilized, in need of Rehabilitation C 204 Legend aTID 1t30 Boundary 0 25 5o l Feet wE July, 2016 Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 8 July 27, 2016 SECTION 5: Preliminary Parcel List and Analysis us] I� 'Assessed valuations listed are preliminary January 1, 2016. 2Patio shown is for January 1, 2015. Patio for 2016 not yet available. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 9 July 27, 2016 SECTION 6: Equalized Value Test The following calculations demonstrate that the City expects to be in compliance with Wisconsin Statutes Section.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 $246,105,970. This value is less than the maximum of $449,237,400 in equalized value that is permitted for the City of Oshkosh. The City therefore anticipates that it will be in compliance with the statutory equalized valuation test and may proceed with creation of this District. District Creation Date 9/1/2016 Valuation Data Percent Valuation Data Currently Available Change Est. Creation Date 2015 Total EV (TI D In) 3,743,645,000 3,743,645,000 12 %Test 449,237,400 449,237,400 Increment of Existing TIDs TI D #7 140,981,300 140,981,300 TI D #10 568,200 568,200 TI D #11 266,200 266,200 TI D #12 3,972,600 3,972,600 TI D #13 10,624,400 10,624,400 TI D #14 18,070,500 18,070,500 TI D #15 7,736,900 7,736,900 TI D #16 5,095,700 5,095,700 TI D #17 11,724,400 11,724,400 TI D #18 13,335,400 13,335,400 TI D #19 9,302,100 9,302,100 TI D #20 0 0 TI D #21 5,700,300 5,700,300 TI D #23 0 0 TI D #24 8,327,900 8,327,900 TI D #25 9,838,800 9,838,800 TI D #26 0 0 TI D #27 0 0 Total Existing Increment 245,544,700 245,544,700 Projected Base of New or Amended District 561,270 561,270 Total Value Subject to 12 %Test 246,105,970 246,105,970 Compliance Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 10 July 27, 2016 SECTION 7: Statement of Kind, Number and Location of Proposed Public Works and Other Projects Project Costs are any expenditure made, estimated to be made, or monetary obligations incurred or estimated to be incurred, by the City as outlined in this Plan. Project Costs will be diminished by any income, special assessments or other revenues, including user fees or charges received. To the extent the costs of a Project benefit the City outside the District that 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 is completed. Pro - ration of costs in the Plan are also estimates and subject to change based upon implementation, future assessment policies and user fee adjustments. The following is a list of public works and other TIF- eligible projects that the City may need to implement in conjunction with this District. Any costs necessary or convenient to the creation of the District or directly or indirectly related to the public works and other projects are considered Project Costs and eligible to be paid with tax increment revenues of the District. Property, Right -of -Way and Easement Acquisition Property Acquisition In order to promote and facilitate redevelopment the City may acquire property within the District. The cost of property acquired, and any costs associated with the transaction, are eligible Project Costs. Following acquisition, other Project Costs within the categories detailed in this Section may be incurred in order to make the property suitable for development. Any revenue received by the City from the sale of property acquired pursuant to the execution of this Plan will be used to reduce the total project costs of the District. If total Project Costs incurred by the City to acquire property and make it suitable for development and/or redevelopment exceed the revenues or other consideration received from the sale or lease of that property, the net amount shall be considered "real property assembly costs" as defined in Wisconsin Statutes Section 66.1105(2)(f)l.c., and subject to recovery as an eligible Project Cost. Acquisition of Rights -of -Way The City may need to acquire property to allow for installation of streets, driveways, sidewalks, utilities, stormwater management practices and other public infrastructure. Costs incurred by the City to identify, negotiate and acquire rights -of -way are eligible Project Costs. Acquisition of Easements The City may need to acquire temporary or permanent easements to allow for installation and maintenance of streets, driveways, sidewalks, utilities, stormwater management practices and other public infrastructure. Costs incurred by the City to identify, negotiate and acquire easement rights are eligible Project Costs. Relocation Costs If relocation expenses are incurred in conjunction with the acquisition of property, those expenses are eligible Project Costs. These costs may include, but are not limited to: preparation of a relocation plan; allocations of staff time; legal fees; publication of notices; obtaining appraisals; and payment of relocation benefits as required by Wisconsin Statutes Sections 32.19 and 32.195. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 11 July 27, 2016 Site Preparation Activities Environmental Audits and Remediation There have been no known environmental studies performed within the proposed District. If, however, it becomes necessary to evaluate any land or improvement within the District, any cost incurred by the City related to environmental audits, testing, and remediation are eligible Project Costs. Demolition In order to make sites suitable for development, the City may incur costs related to demolition and removal of structures or other land improvements, to include abandonment of wells or other existing utility services. Site Grading Land within the District may require grading to make it suitable for development and /or redevelopment, to provide access, and to control stormwater runoff. The City may need to remove and dispose of excess material, or bring in fill material to provide for proper site elevations. Expenses incurred by the City for site grading are eligible Project Costs. RDA Type Activities Contribution to Redevelopment Authority As provided for in Wisconsin Statues Sections 66.1105(2)(f)l.h and 66.1333(13), the City may provide funds to its RDA to be used for administration, planning operations, and capital costs, including but not limited to real property acquisition, related to the purposes for which it was established in furtherance of any redevelopment or urban renewal project. Funds provided to the RDA for this purpose are eligible Project Costs. Revolving Loan /Grant Program To encourage private redevelopment consistent with the objectives of this Plan, the City, through its RDA, may provide loans and /or matching grants to eligible property owners in the District. Loan and /or matching grant recipients will be required to sign an agreement specifying the nature of the property improvements to be made. Eligible improvements will be those that are likely to improve the value of the property, enhance the visual appearance of the property and surrounding area, correct safety deficiencies, or as otherwise specified by the RDA in the program manual. Any funds returned to the RDA from the repayment of loans made are not considered revenues to the District, and will not be used to offset District Project Costs. Instead, these funds may be placed into a revolving loan fund and will continue to be used for the program purposes stated above. Any funds provided to the RDA for purposes of implementing this program are considered eligible Project Costs. Miscellaneous Cash Grants (Development Incentives) The City may enter into agreements with property owners, lessees, or developers of land located within the District for the purpose of 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. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 12 July 27, 2016 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 in connection with 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. With all Projects 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. In the event any of the Project Cost expenditures included in this Plan are determined not to be reimbursable out of the TIF fund by counsel retained by the City for purposes of making such determination, or a court of record so rules in a final order, then such Project Cost is deleted from this Plan and the remainder of the Projects shall be deemed the entirety of the Projects for purposes of this Plan. The City reserves the right to implement only those projects that remain viable as the Plan period proceeds. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 13 July 27, 2016 SECTION 8: Maps Showing Proposed Improvements and Uses Tax Increment District #30 Washington Building Redevelopment Ci1o. Proposed Improvements Oshkosh Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 14 July 27, 2016 C4 �O -6 -6 -6 ID N C C O CL. 7 a 6 0 a 7 Y ` X U O Cn U 62 (D CL S CL -Fr L E � _a i— > cn U N � V) (D m 0 Q C d 0 V) w z u� I- I 111111iii,lllllli1111111 --��` iiiiiiir1� .nrnn.ni IrrrrrrrrrR7■ lrrr ■lrrrlNl! 1, l � L ■I s � ■rr1 ill �ii=iiii I'M rallxllrt 111 r -IMINl i[7 GilCll`JE ■■ Ca I�1 i ■■■I arr■I lull 1■■■1 1■■ ■I 1 [11 Gig @IIsAI 1 6'i Ll L'I131 C514 No 11 ..l[CI R7 C:IIGI _ 11 ■r: ■ ■ \Ilil 11lri rrrFlil rr ■■ _ iJ rr _ ilrrl [lr■I lrrl IrHr■ ■ii liUNIMMI��y IGIIk+ryr7 FI! 01! 1331 Iron l,■a ■onrzyr modaIMNY rFlalrrrr roar► Ku11� um, ■rr ■Er V.R rrs!. rr� \ rrrxscI; - for P. R, ON Mai NEI I Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 15 July 27, 2016 SECTION 9: Detailed List of Project Costs All costs are based on 2016 prices and are preliminary estimates. The City reserves the right to increase these costs to reflect inflationary increases and other uncontrollable circumstances between 2016 and the time the expenditure is made. The City also reserves the right to increase certain Project Costs to the extent others are reduced or not implemented without amending the Plan. The tax increment allocation is preliminary and is subject to adjustment based upon the implementation of the Plan. This Plan is not meant to be a budget nor an appropriation of funds for specific projects, but a framework within which to manage projects. All costs included in the Plan are estimates based on best information available. The City retains the right to delete projects or change the scope and /or timing of projects implemented as they are individually authorized by the Common Council, without amending the Plan. Proposed TI F Project Cost Estimates Total Projects Notes 678,901 ' Reflects aty contribution requested by developer and listed within the "Tax Incremental Financing FbIicy and Application" dated April 30, 2016 Zoojected incentive amount based on 25 years of tax increment after recovering all other aty costs. 3Calculated by Ehlers. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 16 July 27, 2016 Projected Project ID Project Name/Type Total Year 1 Parking Lot Fbconstruction' 88,000 2016 2 Development I ncentive2 530,739 2018 -2042 3 Administrative Expense 36,000 2016-2042 4 Interest on Advances3 24,162 2018-2037 Total Projects Notes 678,901 ' Reflects aty contribution requested by developer and listed within the "Tax Incremental Financing FbIicy and Application" dated April 30, 2016 Zoojected incentive amount based on 25 years of tax increment after recovering all other aty costs. 3Calculated by Ehlers. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 16 July 27, 2016 SECTION 10: Economic Feasibility Study, Financing Methods, and the Time When Costs or Monetary Obligations Related are to be Incurred The information and exhibits contained within this Section demonstrate that the proposed District is economically feasible insofar as: • The City has available to it the means to secure the necessary financing required to accomplish the projects contained within this Plan. A listing of "Available Financing Methods" follows. • The City expects to complete the projects in one or multiple phases, and can adjust the timing of implementation as needed to coincide with the pace of private development. A discussion of the phasing and projected timeline for project completion is discussed under "Plan Implementation" within this Section. A table identifying the financing method for each phase and the time at which that financing is expected to be incurred is included. The development anticipated to occur as a result of the implementation of this Plan will generate sufficient tax increments to pay for the cost of the Projects. Within this Section are tables identifying: 1) the development and redevelopment expected to occur; 2) a projection of tax increments to be collected resulting from that development and redevelopment and other economic growth within the District; and 3) a cash flow model demonstrating that the projected tax increment collections and all other revenues available to the District will be sufficient to pay all Project Costs. Available Financing Methods To the extent Project Costs cannot be paid from cash on hand, the following is a list of the types of debt obligations that the City could utilize to raise the capital needed to finance Project Costs or to pay commitments to developers. General Obligation (G.O.) Bonds or Notes The City may issue G.O. Bonds or Notes to finance the cost of projects included within this Plan. The Wisconsin State Constitution limits the principal amount of G.O. debt that the City may have outstanding at any point in time to an amount not greater than five percent of its total equalized value. As of December 31, 2015 the City had approximately $41.8 million in unused G.O. debt capacity available. Bonds Issued to Developers ( "Pay as You Go" Financing) The City may issue a bond or other obligation to one or more developers who provide financing for projects included in this Plan. Repayment of the amounts due to the developer under the bonds or other obligations are limited to an agreed percentage of the available annual tax increments collected that result from the improvements made by the developer. To the extent the tax increments collected are insufficient to make annual payments, or to repay the entire obligation over the life of the District, the City's obligation is limited to not more than the agreed percentage of the actual increments collected. Bonds or other obligations issued to developers in this fashion are not general obligations of the City and, therefore, do not count against the City's statutory borrowing capacity. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 17 July 27, 2016 Tax Increment Revenue Bonds The City has the authority to issue revenue bonds secured by the tax increments to be collected. These bonds may be issued directly by the City, or as a form of lease revenue bond by a Redevelopment Authority. Tax Increment Revenue Bonds and Lease Revenue Bonds are not general obligations of the City and therefore do not count against the City's statutory borrowing capacity. To the extent tax increments collected are insufficient to meet the annual debt service requirements of the revenue bonds, the City may be subject to either a permissive or mandatory requirement to appropriate on an annual basis a sum equal to the actual or projected shortfall. Utility Revenue Bonds The City can issue revenue bonds to be repaid from revenues of the its various systems, including revenues paid by the City that represent service of the system to the City. There is neither a statutory nor constitutional limitation on the amount of revenue bonds that can be issued, however, water rates are controlled by the Wisconsin Public Service Commission and the City must demonstrate to bond purchasers its ability to repay revenue debt with the assigned rates. To the extent the City utilizes utility revenues other than tax increments to repay a portion of the bonds, the City must reduce the total eligible Project Costs in an equal amount. Special Assessment "B" Bonds The City has the ability to levy special assessments against benefited properties to pay part of the costs for street, curb, gutter, sewer, water, storm sewers and other infrastructure. In the event the City determines that special assessments are appropriate, the City can issue Special Assessment B bonds pledging revenues from special assessment installments to the extent assessment payments are outstanding. These bonds are not counted against the City's statutory borrowing capacity. If special assessments are levied, the City must reduce the total eligible Project Costs under this Plan in an amount equal to the total collected. Plan Implementation The City anticipates making total Project Cost expenditures of approximately $680,000 to support rehabilitation of 105 Washington Avenue including an estimated $530,000 for development incentives, $88,000 for public parking lot reconstruction and the balance for administrative expense and payment of interest on funds expected to be advanced to the District to cover necessary expenditures prior to establishment of the District's increment revenue stream. The City expects to incur the development incentive obligation through a development agreement to be entered into in 2016, with payments to be made on a "pay as you go" basis through the life of the District. The City would also incur the cost for parking lot reconstruction in 2016 and expects to advance funds for this purpose with recovery of the advanced amounts and accrued interest over time. No specific Project Costs are identified for 300 State Street, however, the City would expect to make available appropriate development incentives or other assistance at the time a rehabilitation project is proposed without further amending this Plan. It is important to note that this Plan does not constitute approval of any particular projects. Based on the 27 year maximum life of the District and corresponding 22 year expenditure period, it can be expected that economic conditions will change throughout the District's life and will alter the projections contained in this Plan. Decisions to undertake specific Projects through the life of the District must be made in the context of the current financial position of the TID and forecasts updated to reflect the best information available at that time. If financing as outlined in this Plan proves unworkable, the City reserves the right to use alternate financing solutions for the projects as they are implemented. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 18 July 27, 2016 Development Assumptions Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 19 July 27, 2016 aty of Oshkosh, Tax I ncrement D st ri d - 30 Development Assum• • Construction Year Actual 20 Unit Apt. Building Annual Total Construction Year 1 2016 856,287 856,287 2016 1 2 2017 0 2017 2 3 2018 0 2018 3 4 2019 0 2019 4 5 2020 0 2020 5 6 2021 0 2021 6 7 2022 0 2022 7 8 2023 0 2023 8 9 2024 0 2024 9 10 2025 0 2025 10 11 2026 0 2026 11 12 2027 0 2027 12 13 2028 0 2028 13 14 2029 0 2029 14 15 2030 0 2030 15 16 2031 0 2031 16 17 2032 0 2032 17 18 2033 0 2033 18 19 2034 0 2034 19 20 2035 0 2035 20 21 2036 0 2036 21 22 2037 0 2037 22 23 2038 0 2038 23 24 2039 0 2039 24 25 2040 0 2040 25 26 2041 0 2041 26 27 2042 0 2042 27 Totals 0 856,287 856,287 Notes 'Projected valuation as estimated by developer and listed within the "Tax Incremental Fi nancing PbIicy and Application" dated April 30, 2016. Converted to equalized value by Ehlers. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 19 July 27, 2016 Increment Revenue Projections Type of District District Creation Date Valuation Date Max Life (Years) Expenditure Pbriod/Termination Revenue Periods/ Final Year Extension Bigibility /Years Recipient District Rehabilitation September 1, 2016 �n 1, 2016 27 22 9/1/2038 27 2044 Yes 3 Yes Construction Inflation Year Value Added Valuation Year Increment Base Value 561,270 Appreciation Factor 1.00% E:]ApplytoBaseValue Base Tax Rate $25.95 Rate Adjustment Factor Discount Rate Total Increment Revenue Year Tax Pate' Tax Increment NR/ Calculation 1 2016 856,287 2017 5,613 861,900 2018 $25.95 22,365 21,916 2 2017 0 2018 14,232 876,131 2019 $25.95 22,735 43,746 3 2018 0 2019 14,374 890,505 2020 $25.95 23,108 65,489 4 2019 0 2020 14,518 905,023 2021 $25.95 23,484 87,142 5 2020 0 2021 14,663 919,686 2022 $25.95 23,865 108,705 6 2021 0 2022 14,810 934,495 2023 $25.95 24,249 130,174 7 2022 0 2023 14,958 949,453 2024 $25.95 24,637 151,548 8 2023 0 2024 15,107 964,560 2025 $25.95 25,029 172,827 9 2024 0 2025 15,258 979,819 2026 $25.95 25,425 194,008 10 2025 0 2026 15,411 995,230 2027 $25.95 25,825 215,090 11 2026 0 2027 15,565 1,010,795 2028 $25.95 26,229 236,071 12 2027 0 2028 15,721 1,026,515 2029 $25.95 26,637 256,951 13 2028 0 2029 15,878 1,042,393 2030 $25.95 27,049 277,728 14 2029 0 2030 16,037 1,058,430 2031 $25.95 27,465 298,401 15 2030 0 2031 16,197 1,074,627 2032 $25.95 27,885 318,968 16 2031 0 2032 16,359 1,090,986 2033 $25.95 28,310 339,429 17 2032 0 2033 16,523 1,107,508 2034 $25.95 28,739 359,783 18 2033 0 2034 16,688 1,124,196 2035 $25.95 29,172 380,028 19 2034 0 2035 16,855 1,141,051 2036 $25.95 29,609 400,164 20 2035 0 2036 17,023 1,158,074 2037 $25.95 30,051 420,190 21 2036 0 2037 17,193 1,175,267 2038 $25.95 30,497 440,105 22 2037 0 2038 17,365 1,192,633 2039 $25.95 30,947 459,909 23 2038 0 2039 17,539 1,210,172 2040 $25.95 31,402 479,600 24 2039 0 2040 17,714 1,227,886 2041 $25.95 31,862 499,177 25 2040 0 2041 17,892 1,245,778 2042 $25.95 32,326 518,641 26 2041 0 2042 18,070 1,263,848 2043 $25.95 32,795 537,991 27 2042 0 2043 18,251 1,282,099 2044 $25.95 33,269 557,226 Totals 856,287 425,813 Future Value of Increment 744,966 Notes: 'Tax rate is actual rate for 2015/16 taken from the City's Tax Increment Worksheet (DORForm FG202). Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 20 July 27, 2016 Cash Flow City of Oshkosh, Tax Increment Cash Flow Projection District # • Year Projected Revenues Advance From Municipal Expenditures City Contrib. Balances Tax Other City Total Revenue Repayment of to Parking Lot Total Advance Increments Funds Revenues Obligation' City Advance 2 Rennovation Admin. Expenditures Annual Cumulative Outstanding Year 2016 98,000 98,000 88,000 10,000 98,000 0 0 98,653 2016 2017 1,000 1,000 1,000 1,000 0 0 101,646 2017 2018 22,365 22,365 15,774 5,591 1,000 22,365 0 0 97,088 2018 2019 22,735 22,735 16,051 5,684 1,000 22,735 0 0 93,346 2019 2020 23,108 23,108 16,331 5,777 1,000 23,108 0 0 89,436 2020 2021 23,484 23,484 16,613 5,871 1,000 23,484 0 0 85,354 2021 2022 23,865 23,865 16,899 5,966 1,000 23,865 0 0 81,095 2022 2023 24,249 24,249 17,187 6,062 1,000 24,249 0 0 76,654 2023 2024 24,637 24,637 17,478 6,159 1,000 24,637 0 0 72,028 2024 2025 25,029 25,029 17,772 6,257 1,000 25,029 0 0 67,211 2025 2026 25,425 25,425 18,069 6,356 1,000 25,425 0 0 62,199 2026 2027 25,825 25,825 18,369 6,456 1,000 25,825 0 0 56,987 2027 2028 26,229 26,229 18,672 6,557 1,000 26,229 0 0 51,570 2028 2029 26,637 26,637 18,978 6,659 1,000 26,637 0 0 45,942 2029 2030 1 27,049 27,049 19,287 6,762 1,000 27,049 0 0 40,098 2030 2031 27,465 27,465 19,599 6,866 1,000 27,465 0 0 34,034 2031 2032 27,885 27,885 19,914 6,971 1,000 27,885 0 0 27,744 2032 2033 28,310 28,310 20,232 7,077 1,000 28,310 0 0 21,221 2033 2034 28,739 28,739 20,554 7,185 1,000 28,739 0 0 14,461 2034 2035 29,172 29,172 20,879 7,293 1,000 29,172 0 0 7,457 2035 2036 29,609 29,609 21,207 7,402 1,000 29,609 0 0 204 2036 2037 30,051 30,051 28,843 208 1,000 30,051 0 0 0 2037 2038 30,497 30,497 29,497 1,000 30,497 0 0 2038 2039 30,947 30,947 29,947 1,000 30,947 0 0 2039 2040 1 31,402 31,402 30,402 1,000 31,402 0 0 2040 2041 31,862 31,862 30,862 1,000 31,862 0 0 2041 0 0 2042 2042 32,326 32,326 31,326 1,000 32,326 2043 32,795 32,795 0 32,795 32,795 2043 2044 33,269 33,269 0 33,269 66,064 2044 Total 744,966 99,000 843,966 1 530,739 123,162 88,000 36,000 1 777,901 1 Total Notes: I Pro ected TID Closure 1EquaIto 100% of increment generated by rehabilitation project less annual administrative expense and amounts paid to recover prior City advances. Assumes the City wiII charge a 2% cost of funds on advanced amounts and wiII allocate 25 % oft he annual increment collected to repay the advance. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 21 July 27, 2016 SECTION 11: Annexed Property There are no lands proposed for inclusion within the District that were annexed by the City on or after January 1, 2004. SECTION 12: Estimate of Property to be Devoted to Retail Business Pursuant to Wisconsin Statutes Sections 66.1105(5)(b) and 66.1105(6)(am)l, the City estimates that less than 35% of the territory within the District will be devoted to retail business at the end of the District's maximum expenditure period. SECTION 13: Proposed Zoning Ordinance Changes The proposed Plan is in general conformance with the City of Oshkosh's present zoning and no changes are anticipated to the Plan area's C -3 zoning to implement the Plan. SECTION 14: Proposed Changes in Master Plan, Map, Building Codes and City of Oshkosh Ordinances The proposed Plan is in general conformance with the City of Oshkosh's Comprehensive Plan identifying the area as appropriate for mixed downtown development. All development within the District will be required to conform to the 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, thus, no changes to the existing regulations are proposed or needed. SECTION 15: Relocation Where the relocation of individuals and business operations would take place as a result of the City's acquisition activities occurring within the District, relocation will be carried out in accordance with the relocation requirements set forth in Chapter 32 of the Wisconsin Statutes and the Federal Uniform Relocation Assistance and Real Property Acquisitions Policy Act of 1970 (P.L. 91 -646) as applicable. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 22 July 27, 2016 SECTION 16: Orderly Development of the City of Oshkosh Creation of the District and the implementation of the projects in its Plan will promote the orderly redevelopment of the City of Oshkosh by preserving, rehabilitating and reusing existing structures. By utilizing the provisions of the Tax Increment Finance Law, the City can stabilize property values and attract new investment that results in increased tax base. Development of new uses in the District will add to the tax base and will generate positive secondary impacts in the community such as additional housing opportunities and increased employment opportunities. SECTION 17: List of Estimated Non - Project Costs Non - Project costs are public works projects that only partly benefit the District or are not eligible to be paid with tax increments, or costs not eligible to be paid with TIF funds. Examples would include: 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. The City does not anticipate making any non - project costs in connection with the implementation of this Plan. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 23 July 27, 2016 August 11, 2016 Darryn Burich, Director of Planning Services City of Oshkosh 215 Church Avenue Oshkosh, WI 54903 -1130 Dear Mr. Burich: I reviewed the project plan for, City of Oshkosh Tax Increment District # 30 Washington Building pursuant to Section 66.1105(4)(f) of the Wisconsin Statutes. I find that the plan includes a statement listing the kind, number, and location of proposed public improvements. It also includes an economic feasibility study, a detailed list of estimated project costs, and a description of the method of financing all estimated project costs, the time when the costs are to be incurred, and a list of estimated non - project costs. The plan contains maps of existing uses and conditions of real property, as well as, proposed improvements and uses. The plan shows any proposed changes in zoning of the real property in the district, and any proposed changes in the City's master plan, map or other municipal codes required or proposed as part of the district. The plan includes a statement of the proposed method for relocation of any persons to be displaced. The plan further shows that the district will promote the orderly development within the City, which is consistent with the City's Comprehensive Plan (Master Plan), building codes, and other city ordinances in relation to project elements. Upon adoption of the project plan by the Plan Commission and their submission to the City Council, all requirements of Section 66.1105(4)(f), Wisconsin Statutes, shall be complete and it is, therefore, my opinion that the project plan attached hereto is complete and complies with Wis. Stat. § 66.1105. Sincerely, CITY OF Lynn F. Lo?i City Attorney LL/ah City Attorney City Hall, 215 Church Avenue P.O. Box 1 130 Oshkosh, Wl 54903-1130 920,236.51 15 http: / /%A,,wv.ci.oshkosh %ovi.us t Als 3, Exhibit A: Calculation of the Share of Projected Tax Increments Estimated to be Paid by the Owners of Property in the Overlying Taxing Jurisdictions Estimated •• • of taxesthat ownersof taxable property each taxing jurisdiction overlaying district would pay byjurisdiction. 8atement of Taxes Data Year: 2014 Fbroentage Winnebago County 19,340,255 19.73% Otyof Oshkosh 40,840,022 41.67% Oshkosh Area School District 33,943,225 34.63% Fox Valley Technical College 3,890,900 3.97% Total 98,014,402 Fox Valley Winnebago Oshkosh Area Technical Revenue Year County Qty of Oshkosh School District College Total Revenue Year 2018 4,413 9,319 7,745 888 22,365 2018 2019 4,486 9,473 7,873 902 22,735 2019 2020 4,560 9,628 8,002 917 23,108 2020 2021 4,634 9,785 8,133 932 23,484 2021 2022 4,709 9,944 8,265 947 23,865 2022 2023 4,785 10,104 8,398 963 24,249 2023 2024 4,861 10,266 8,532 978 24,637 2024 2025 4,939 10,429 8,668 994 25,029 2025 2026 5,017 10,594 8,805 1,009 25,425 2026 2027 5,096 10,761 8,943 1,025 25,825 2027 2028 5,176 10,929 9,083 1,041 26,229 2028 2029 5,256 11,099 9,225 1,057 26,637 2029 2030 5,337 11,271 9,367 1,074 27,049 2030 2031 5,419 11,444 9,511 1,090 27,465 2031 2032 5,502 11,619 9,657 1,107 27,885 2032 2033 5,586 11,796 9,804 1,124 28,310 2033 2034 5,671 11,975 9,952 1,141 28,739 2034 2035 5,756 12,155 10,102 1,158 29,172 2035 2036 5,842 12,337 10,254 1,175 29,609 2036 2037 5,930 12,521 10,407 1,193 30,051 2037 2038 6,018 12,707 10,561 1,211 30,497 2038 2039 6,107 12,895 10,717 1,229 30,947 2039 2040 6,196 13,085 10,875 1,247 31,402 2040 2041 6,287 13,276 11,034 1,265 31,862 2041 2042 6,379 13,470 11,195 1,283 32,326 2042 2043 6,471 13,665 11,357 1,302 32,795 2043 2044 6,565 13,862 11,521 1,321 33,269 2044 146,997 310,408 257,988 29,573 744,966 Notes: The projection shown above is provided to meet the requirementsof Wisconsin 8atute 66.1105(4Xi)4. Project Plan TID No. 30 Creation City of Oshkosh Submitted by Ehlers Page 25 July 27, 2016 Appendix A Tax Increment Financing Application Tax Incremental Financing Policy and Application Please complete and submit the following information to the City of Oshkosh for a more detailed review of the feasibility of your request for Tax Incremental Financing (TIF) assistance. The application is comprised of five parts: 1. Applicant Information 2. Project /Property Information 3. Project Narrative 4. Project Budget /Financial Information 5. Buyer Certification and Acknowledgement. Where there is not enough space for your response or additional information is requested, please use an attachment. Use attachments only when necessary and to provide clarifying or additional information. The Department of Community Development (DCD) reviews all applications for TIF assistance. Failure to provide all required information in a complete and accurate manner could delay processing of your application acid DCD reserves the right to reject or halt processing the application for incomplete submittals. For further information please refer to the "City of Oshkosh Tax Incremental Financing Policy' document. Legal Name: Discovery Properlies, LLC Mailing Address: 230 Ohio St #200, Oshkosh Wi 54902 Primary Contact #: 920 230 3802 E -mail: mgoudreau @discovery- p rope rVes.corn Attorney: Jason Hirschberg Cell #: 920 379 9989 FAX #: 920 428 4606 Legal Entity: Individual(s) Joint Tenants Tenants in Common Corporation LLC X Partnership, Other If not a Wisconsin corporation /partnership /LLC, state where organized: Will a new entity be created for ownership? Yes No Principals of existing or proposed corporation /partnership /LLC and extent of ownership interest. Name: Address: Title: Interest: Mike Goudreau 230 Ohio St #200, Oshkosh Wi 54902 co -owner Randy Schmiedel 230 Ohio St #200, Oshkosh W 54902 co -owner 50% 50% Is any owner, member, stockholder, partner, officer or director of any previously identified entities, or any member of the immediate family of any such person, an employee of the City of Oshkosh? Yes, No X If yes, give the name and relationship of the employee: Have any of the applicants (including the principals of the corporation /partnership /LLC) ever been charged or convicted of a misdemeanor or felony? Yes No x If yes, please furnish details: Cbhf ! 37 D DISCOVE �Y 0 Date: 6/l/2016 RE: Summary Letter 105 Washington Ave. TIF Application C /O: Mark Rohloff City Manager — Oshkosh, WI 215 Church Avenue Oshkosh, WI 54903 Dear Mr. Mark Rohloff: We humbly submit for your review a project that we believe will significantly contribute to the downtown revitalization efforts and hope that the community might view this project favorably enough to utilize Tax Incremental Financing to help bring this project to fruition. We are proposing to renovate the semi- abandoned Washington Building, located at 105 Washington Avenue, into 20 new high -end apartments. In addition, we propose to acquire a portion of the city -owned parking lot adjacent to our building so that we can provide 20 garage units as well as recondition and landscape the entire parking lot, including a large portion that the city would retain for public use. This historic renovation and updating of public space will serve to remove blight and repurpose a building that has significantly fallen out of use due to substantial deferred maintenance and hope that you will support our efforts. Name of Developer & Owner: Discovery Properties, LLC ( Mike Goudreau and Randy Schmiedel Co- Developers / Co- Owners) Description of Site/Building: The Fraternal Reserve Association Building consists of 29,100 Sq. Ft. of vacant office space and sits on a parcel of roughly 10,424 Sq. Ft. located at 105 Washington Avenue. The adjacent parking lot to the south is roughly 31,400 Sq. Ft. Current & Proposed Uses: The most recent use was as office space however has sat vacant the past several years. We are proposing to turn it into market -rate apartment units. Description of End Users: With our planned high -end finishes and price- points, we are anticipating possibly young professional or more mature tenants or empty- nesters that might be looking to downsize from home ownership and take advantage of all the amenities vibrant downtown living has to offer. Project Start & End Dates: Deconstruction and some construction efforts have already begun. We are anticipating a late fall early winter 2016 completion date. Description of Public Benefit (Job Creation): The Full -time professional residents will support downtown business expansion and contribute positively to our Urban Revitalization efforts. The multi - million - dollar redevelopment costs will bring immediate impact to construction revenue in Oshkosh providing for dozens of local businesses and families in 2016. Overview of Private Sector Funding and Total Development Costs: Choice Bank will be our private financing partner for the project providing a $2,025,000 loan. An as of yet to be determined private equity partner will provide an estimated $723,000 and receive the benefit of the historic tax credits. Finally, Discovery Properties will make a capital investment in the amount of $1 million to cover the roughly $3.8 million total project development costs. Summary of Increment Projections and TIF Assistance Requested: Over the next 26 years, we estimate $628,144 of additional tax increment to be generated by this project. We are requesting the full 75% of the increment, or $471,858, as a PayGo note to be paid over the course of the 25 -year payback period. The `But For' Provision: The Washington building is listed on the National Park Service's Register of Historical Places. As a historical preservation project, significant additional expenses have been identified to accommodate unique requirements to maintain as much of the historical fabric as possible. While we will be obtaining tax credits that will help in offsetting these costs, without TIF assistance we estimate that this project would yield a - 13.68 %0 10 -year internal rate of return. Even with the TIF assistance requested, the 10 -year internal rate of return is only - 4.22 %. We initially undertook this project believing the historic tax credits would be enough to help overcome the increased cost of renovating an old building. However, after deconstruction, we have now found that this is no- Cbhf ! 38 where near the case in this project. While we both are thankful that this community has aided our efforts to grow a thriving business enterprise, and while we both believe in the central city revitalization efforts this project exemplifies and in maintaining historical buildings, we have come to realize that we will be taking a loss on this project even with TIF assistance. However, we seriously question whether we can continue to move forward without TIF now that we fully understand the total development costs. Again, we strongly feel that with the City's collaboration, together we can move forward with this project that benefits the entire city, Please feel free to contact me with any questions or clarifications that might be needed. Best regards, Mike Goudreau W Tax Incremental Financing Policy and Application Overall Project Summary and Objectives: Renovation of the Fraternal Reserve Association Building located at 105 Washington Ave from a roughly 29,100 sq ft vacant commercial office space to 20 high end residential apartment units. In addition we will acquire a portion of the city owned lot on which 20 new garage units will be constructed. The lot will be repaved and substantial landscaping will be installed. The city will retain approximately 28% of the refurbished lot for public use. Current and Proposed Uses: The building most recently was used as office space however sat vacant for the past several years falling into foreclosure. The building will be renovated into 20 high -end apartment units. The city - owned lot has been used for public parking. Roughly 72% of the lot will turn private and house garages while the remaining portion will stay public parking. Description of End Users: The high -end finishes proposed along with unique views and close proximity to a host of downtown amenities are likely to draw young professionals or possibly near to retirement individuals looking_ to potentially downsize or get out of the responsibility of home ownership. Property Summary: Parcel /Land Area: 41,814 SF Building Area: 29,100 SF # of Dwelling Units: 20 # of Stories: 5 # of Parking Spaces: 31 & 20 Garages Describe any zoning changes that will be needed: Proposed use is consistent with present C -3 zoning Identify any other approvals, permits or licenses (i.e. Liquor License, Health Department, etc): None Describe briefly what the project will do for the property and neighborhood: With fiber broadband connections & a modern urban feel, we feel this space will be uniquely positioned to draw professionals from many of the downtown businesses such as DealerSocket, 4 Imprint and Silver Star brands to become residents of our downtown fabric. Full -time professional residents will support downtown business expansion and contribute positively to our Urban Revitalization efforts. 9 Tax Incremental Financing Policy and Application Project Timetable Date Final Plan /Specification Preparation: May 15 Bidding and Contracting: May 30 Firm Financing Approval: June 10 Construction /Rehabilitation: Aug Landscaping /Site Work: July -Aug Occupancy /Lease Up: Sept Development Team Developer: Mike Goudreau and Randy Schmiedel Architect: Excel Surveyor: Martenson & Eisle Contractor: RH Design Other Members: Describe Team expertise and experience in developin, imilar projects: Discovery Properties owns over 90 rental properties in ushkosh. Mr Goudreau and Mr. Schmiedel recently were involved with the Riverfront senior apartments along with numerous other developments in Oshkosh. Other current Team projects in development: Currently considering other development opertunities Financial ability of the applicant to complete the project: 100% Full and part -time jobs to be created by the proposed project including estimated salary: This development is likely to create an additional 0.5 FTE for management of the property and another 0.5 FTE for the maintenance and general upkeep. rofessional Studies larket Studies: Applications for commercial and residential projects must include a comprehensive market udy. The market study must identify target markets, analysis of competition, demographics, market rents, tters of intent /interest from prospective tenants, or for housing developments, sale prices or rental rates of mrparable properties. ppraisal: All projects that involve the transfer of land must include a recent appraisal. Projects that include nd as a form of equity or collateral must also submit a recent appraisal. The appraisal must value the property .s is", and the impact on value must be considered for such items as demolition, environmental reinediation, location of utilities, lease buy -outs, and other work necessary to make the site developable. The property lust be valued assuming that the highest and best use is the proposed use. 41 Tax Incremental Financing Policy and Application Sources and Uses of Funds Identify the sources of funds used to finance the project. Typical sources include equity, lender financing, mezzanine financing, government financing, other anticipated types of public assistance, and any other types or methods of financing. Uses of Funds Amount ($) $ per SF of Building Area Land Acquisition: $214,399 $7.37 I SF Demolition: $108,200 $3.721 SF Environmental Remediation: $31,000 $1.071 SF Site Clearance and Preparation: $30,000 $1.031 SF Soft Costs/ Fees: $591,557 $20.331 SF Soft Cost Contingency: $40,000 $1.371 SF Hard Construction Costs: $2,873,935 $98.761 SF Total Project Costs: $3,889,091 $133.651 SF Sources of Funds Equity Developer Equity: Other Equity:( HTC Equity investor ) Total Equity: Loans Construction Financing: Permanent Financing: TIF Assistance Other: ('City Lot Reconcilliation ) Total Sources of Funds Financing Source Amount Equity: Discovery Properties Loans 1: Choice Bank 2: 3: 4: %° of total project costs $ 1,033,788 26.6 % $ 742,845 19.1 % Rate Term $ % mos. $ 2,025,000 4.5 % 25 yrs. 52.1 % $471,858(paygo) (12.1) % $ 87,458 2.2 % $ 3,889,091 100% Terms: Years /Interest Contact Information Cash mgoudreau @discovery- properties.com 25 vears (a 4.5% 42 920- 267 -8050 Tax Incremental Financing Policy and Application Detailed Pro Forma (mast correspond to line iterns for Uses of Funds on previous page) Ladd Acquisition $ 214,399 Demolition $ 108,200 Site Clearance and Preparation. Infrastructure $ Utilities /removal $ Utilities /relocation $ 30,000 Utilitieslinstallation $ Hazardous Materials Removal $ 31,000 Other( } $ Total Site Clearance and Preparation $383,599 Soft Costs /Fees Project Management ( %) $ General Contractor ( %) $ Architect /Engineer ( 9`0) $106,700 Developer Fee (_%) $ 312,004 Appraisal $ 4,800 Soil Testing $ Market Study $ 4,000 Legal /Accounting $ 15,000 Insurance $ 2,500 Title /Recording /Transfer $ 5,000 Building Permit $ 16,821 Mortgage Fees $ 2000 Construction Interest $56,000 Commissions $ Marketing $ 5,000 Real Estate Taxes $ 10,733 Other Taxes $ Other ( Historic Tax Credit Consultants) $ 51,000 Other ( ) $ Sub -total Soft Costs /Fees $ 591,557 Soft Cost Contingency $ 40,000 43 Tax Incremental Financing Policy and Application Pro Forma Income and Expense Schedule Applicants whose projects involve the rental of commercial, retail, industrial, or living units must submit project pro formas that identify income and expense projections on an annual basis for a minimum five -year to a maximum eleven -year period. If you expect a reversion of the asset after a holding period please include that in your pro forma as well. Please check with city staff to determine the time period needed for the pro forma. Identify all assumptions (such as absorption, vacancies, debt service, operational costs, etc.) that serve as the basis for the pro formas. Two sets of pro formas are to be submitted. The first set should show the project without TIF assistance and the second set with TIF assistance. For owner- occupied industrial and commercial projects, detailed financial information must be presented that supports the need for financial assistance (see below). Analysis of Financial Need Each application must include financial analyses that demonstrate the need for TIF assistance. Two analyses must be submitted; one WITHOUT TIF assistance and one WITH TIF assistance. The applicant must indicate the minimum return or profit the applicant needs to proceed with the project and rationale for this minimum return or profit. `Ihe analyses will necessarily differ according to the type of project that is be- ing developed. Rental Property: For projects involving rental of space by the developer to tenants (tenants include offices, retail stores, industrial companies, and households), an internal rate of return on equity must be computed with and without TIF assistance based on the pro forma of income and expense prepared for the Incotne and Expense Schedule below. The reversion at the end of the ten -year holding period must be based on the capitalized 11th year net operating income. The reversionary value is then added to the loth year cash flow before discounting to present value. State all assumptions to the analyses. For Sale Residential: Show profit as a percent of project cost (minus developer fee and overhead and minus sales commissions and closing costs, which should be subtracted from gross sales revenue). Other measure of profitability may be submitted, such as profit as a percent of sales revenue. Mixed Use Commercial 1 For -Sale Residential: Provide either separate analyses for each component of the project or include in the revenue sources for the for -sale portion, the sale value of the commercial component based on the net operating income of the commercial space at stabilization. Indicate how the sale value was derived. Owner- Occupied Commercial: For projects, such as "big -box" retail projects, provide copies of the analyses that the company needs to meet or exceed the company's minimum investment threshold(s) for proceeding with the project. Competitive Projects: In instances where the City is competing with other jurisdictions for the project (e.g., corporate headquarters, new manufacturing plant), present detailed analyses that demonstrate the capital and operating cost differential between the proposed location(s) in Oshkosh and locations that are seriously being considered by the applicant. 44 Tax Incremental Financing Policy and Application Revenue Projections - Rental Project Income rent per sf (or avg.) Commercial Rent Commercial Expense Recoveries Residential Rent Other Revenue ( Garage rent ) Gross Potential Income Commercial Vacancy % Residential Vacancy 5n' 1h-4A % Effective Gross Income (EGI) Expenses Maintenance & Repairs Real Estate Taxes Insurance Management Fee Professional Fees Other Expense ( utilities & trash ) Other Expense ( advertising ) Year 1 Year 2 $ 211,008 $ 214,608 $ 27,600 $ 28,069 >>Year 11 $ 247,008 $ 32,668 $ 238,608 $ 232,727 $ 268,209 $11,930 $ 9,950 $11,467 $ 226,678 $ 232,727 $ 268,209 $ 17,490 $ 17,665 $19,320 $10,733 $ 31,832 $ 34,814 $ 12,000 $12,120 $13,255 $ 14,520 $ 14,665 $ 16,039 $ 3,700 $ 3,737 $ 4,087 $ 29,040 $ 29,330 $ 32,078 $ 7,210 $ 7,282 $ 7,964 Total Expenses $ 94,693 $116,631 $ 127,558 Net Operating Income (NOI) $ 131,985 $ 116,096 $ 140,651 Capital Expenses (reserves, tenant ir»provenieWs, conindssiow) $ 3,000 $ 3,030 $ 3,314 Debt Service $135,067 $ 135,067 $ 135,067 Net Cash Flow (before depreciation) $ (6,083) $ (22,001) $ 2,270 Reversion in. Year 10 Year II NOI before Debt 6 Capital Expenses $140,651 Capitalization Rate 8 % Gross Reversion $1,758 „138 45 Tax Incremental Financing Policy and Application Revenue Projects — For -Sale Project Gross Sales Revenue Housing Units Unit Type's Number Price /Unit $ $ $ Total Housing Sales: $ *affordable tinits if ally Housing Unit Upgrades: $ Commercial Space Unit Type Size -sf Price per sf $ Total Commercial Sales: $ Total Gross Sales Revenue $ Cost of Sales Commissions % $ Marketing % $ Closing % $ Other Costs ( ) % $ Total Costs of Sales % $ Net Sales Revenue $ Tax Incremental Financing Policy and Application Summary Letter Provide a summary of the project in the form of a letter addressed to the City Manager. The letter should not exceed two (2) pages in length and should include only the following essential information about the project: • Description of site or building • Current and proposed uses • Description of end users • Project start and end dates • Profitability • Description of public benefits, including job creation. • Overview of private - sector financing • Amount of TIF assistance requested • Summary of increment projections • Name of developer and owner • Total development costs • Statement regarding why TIF is essential and why the "but for" provision will be met. Note:. In the "but for" discussion you must clearly describe why TIF is needed to help this project and why the project will not /cannot proceed without such support. Failure to clearly provide the "but for" explanation will delay action on your application. Project Narrative Provide an in -depth overview of the project in narrative format. The narrative must include a description of the following aspects of the project: . Current condition of the site and historical overview that includes the size and condition of any existing structures, environmental conditions, and past uses of the site. . Proposed use(s) of project (e.g. industrial, commercial, retail, office, residential for sale or for rental, senior housing, etc.) • Construction information about the project including: size of any existing structure to be demolished or rehabbed; size of any new construction: types of construction materials (structural and finish); delineation of square foot allocation by use; total number and individual square footage of residential units: type of residential units (e.g. for -sale, rental, condominium, single - family, etc); number of affordable residential units; number and type of parking spaces; and construction phasing. . If in an existing TID or redevelopment area, confirm that this project is consistent with the goals and objectives in the Project or Redevelopment Plan. • A summary of the proposed "greet' features to be included in the project. All projects that receive TIF assistance are encouraged to include environmentally friendly features. Page 47 Tax Incremental Financing Policy and Application Filing Requirements You must provide all of the following items with your signed application: I. Fee: An application fee of 1% of the requested TIF assistance or $10,000, whichever is greater. This fee is to cover City costs associated with evaluating the TIF application and does not cover the use of outside consultants, which if required will be paid for by the applicant. Make your check payable to the City of Oshkosh. 2. Site Maps: Provide a map that shows the location of the site. Also provide a map that focuses on the project and its immediate surroundings. Both maps should be no larger than 11x17 inches, Larger snaps will be required for projects presented to the Plan Commission, Redevelopment Authority, or Common Council. 3. Project Renderings: Provide preliminary architectural drawings, plans and renderings for the project. These drawings should be no larger than 11x17 inches. Larger maps will be required for projects presented to the Plan Commission, Redevelopment Authority, or Common Council. Notes • The City charges an administrative fee of 5% of the annual tax increment revenue, • If the project requires planning and zoning approvals, you must make these applications concurrent with this request. Agreement I, by signing this application, agree to the following: 1. I have read and will abide by all the requirements of the City for Tax Incremental Financing. 2. The information submitted is correct. 3. I agree to pay all costs involved in the legal and fiscal review of this project. These costs may include, but not be limited to, bond counsel, outside legal assistance, and outside financial assistance, and all costs involved in the issuance of the bonds or loans to finance the project. 4. I understand that the City reserves the right to deny final approval, regardless of preliminary approval or the degree of construction completed before application for final approval. 5. The undersigned authorizes the City of Oshkosh to check credit references and verify financial and other information. b. The undersigned also agrees to provide any additional information as may be requested by the City after filing of this application., Applicant Page 48 /.3e) -r Appendix B Market Study and Investment Analysis Report (Investa-Analytics) 1 *INVISTA ANALYTIC Prepared Exclusively For: Mr. Michael Goudreau and Mr. Randy Schmiedel Discovery Properties, LLC Prepared By: Timothy M Hess, PhD lnvista Analytics, LLC Page 49 member of inf � CONTENTS: Introduction/ Objective ..................................................... .. ............... .,.1 MarketStudy ........................................................... ..............................1 ProjectValuation .................................................. ..............................4 LotConstruction Analysis ....................................... ..............................5 OverallInvestment Analysis ................................... ..............................7 PotentialIncome ................................................ ..............................7 Budgetand Funding ......................................... ..............................8 TIFFunding ........................................................ ..............................9 OperationalProforma ....................................... .............................11 ReturnOn Investment ...................................... .............................14 Page 4: INTRODUCTION / OBJECTIVE Invista Analytics, LLC (IA) has been engaged to provide a market study of the present rental availability in the downtown Oshkosh neighborhood that might likely serve a demographic that would desire higher -end finishes and amenities summarizing both rental rates and occupan- cies. This infomnation was then utilized to create an operational proforma and investment analysis for the operation of a residential re -use of the Fratemal Reserve Association Building located at 105 Washington Avenue in Oshkosh, Wisconsin. This roughly 29,100 Sq Ft building is listed on the National Park Service Register of Historic Places and as such qualifies this project for Historic Tax Credit incentives. As part of this project, the developers seek to acquire a portion of the adjacent 0.72 acre park- ing lot located to the south of the Washington building which is presently owned by the City of Oshkosh. The developers intend to refurbish this parking lot and add 20 garage units to service the tenants of the newly renovated apartment building. The developers of this project are requesting Tax Incremental Financing (TIF) through the City of Oshkosh. Thus Invista Analytics sought to provide reasoning for methods of valuation for both the existing building and the completed project in order to estimate the potential increment generated. Two different proformas, with and without TIF, were created to evaluate the effect of the potential TIF funding mechanism. Finally, return on investment metrics were calculated on the with TIF and without TIF Investment scenarios. Source of Information In many instances in this report IA was required to seek outside sources of Information including assessment data from the City of Oshkosh, financing terms, capitalization rates, among other metrics. In all cases we sought to document the sources of information and any assumptions used. While much of the information was provided by the developers, these terms should be reviewed to be sure they align with any potential changes the developer may have in securing potential funding. It is also recommended that any reader also perform his/her own investment analysis. This report should be acceptable for external investing and /or lending purposes. Invista Ana - lytics will be available to answer any questions related to these market findings, operational proforma and investment analyses. MARKET STUDY The developers intend to renovate the Washington Building at 105 Washington Ave in Osh- kosh, Wisconsin. Specifically this building will be renovated into four residential units on each of the five floors. To evaluate the rental potential of the residential units, IA acquired the Apartment Data - Q or more Units excel database' from the city of Oshkosh Assessor's File Downloads web page. This data set was then limited to those properties that fell within a 1 mile driving distance of 105 Washington Ave and that had been constructed since the year 2000. After careful inspeo- tion it was noted that both the 900 N Main Apartments, the Anthem Apartments, and the soon to be in- service Beach Building were not included in this file and thus added to our comparison set. The locations of all potential comparable properties found through this search process are displayed in Figure 1 on the following page. Careful inspection noted that properties 1 and 5 are townhouse developments. While these might well compete for potential tenants, the overall living experience was determined to be different enough to not consider these in the determination of potential rent. Property 2 is a low - income housing apartment complex and thus serves potential tenants not similar to the target of the subject property. Similarly subject property 6 is a senior living apartment structure which also would not likely serve the demographic targeted by this development. 1. ' htfpJ h55aw. a. a5hkosi�. w9. uslassessor /asseis/dain3aadslApartments 4up.Ms' accessed Apni 10, 2016 105 WASHINGTON AVER INVE=.STIAFNT ANALYSIS Page 51 Figure 1: Potential Comparable Apartment Locations n vs 1 1 FUIIOR Ave 02b t.025 shl<os D Y1 Irvinr vc li E Irving Ave - i � n Dale Ave a. )f gyV 'T! P irk:vay Ave E Parkway Ave �A �yOr r /ru Hudson Avr S� z Merritt Ave t �yU y .rjry ✓� -1Y0 rn 9 y i � c LY4r :lnr JtGn AvE g y °ion Rib O� /lei 4)1repAve kFrkpt:s + 141; cni r t,015 4imprrnt .�6 CC aC ra A' /C L C c ur Q C!3 4) � WMh Avi r "nom rLr ��th Ave f tit �tlr Are Pioneer 1]r;ve Park 1.010 ` r r ci V., 1aNI Ave E10th Ave For each of the remaining comparable subject properties an on -line search was conducted to obtain information on the characteristics of the types of offerings, amenities and rental rates for each of the properties. Most of the properties had their own website that contained all of the information needed. Two had the information listed on the third party website, apartments. com. For both the 100 N Main and Anthem properties, a range of rents were given for their room types. In this case we used the middle of the ranges as the 'typical' rental rate. The data generated from this exercise is displayed in the table on the following page. The data was then submitted to an econometric quantile regression mode12 that used all of the covariates to predict the rents with the exception of parking. While several of the units offer un- derground parking, the rents used in the analysis were the base rate which includes surface lot parking. Thus the model sought to estimate the expected rent at the subject property without the garages that will be available. Given the Beach building has yet to be placed in service, a weighting was applied to each property to carry out the estimation. The Beach building units received a weight of 0.25, while all the other properties received at weight of 1.0. The resultant model parameters were then used along with the covariate data for the subject property units to arrive at an expected rent . for the one, two and three bedroom units to be rented. The model resulted in estimates of $722, $903, and $1,027 per month respectively for the one, two and three bedroom units. These estimates represent the predicted monthly rent one might expect to pay given the par- ticulars of the units that would be available assuming they are of roughly similar quality as the comparable properties with outside lot parking. The developers intend to secure the adjoining parking lot to the subject site from the City of Oshkosh and build 20 garage units,10 each of single and two car garages to service the subject property tenants. A number of the compara- ble properties offered underground parking for additional fees. The rates are given in the data table on the following page. It was noted that these parking options are leased per stall. 2. Koenker, Roger (2005). QuanbU RegresslcrF. Cambridge Urimrsaty Press. ISBN 0.521-60a27 -9 INVISTA- ANALYTICS.COM Page 52 Page 53 O V a ¢ 6 £ c u � d N L« L L 3 u ° U V TJ i c « o � S%S N v v c v u a O O C � _? Q OG � u w Z 7 t O y d 3 m w � � C � C w � ] c QY � N � O d � w L 9 t O nJ r v p,I N a > U ` U a ] p o LL O U « O � w D U rs ? L u � c c Ey A E a � Z p « d � d A t o � u o o v 3 v Q r v �J 105 WASHINGTON AVE INVESTMENT ANALYSIS I c c U {+ ° o o Q O U ay C v1 Y C T T c c c V O ap0 R E 60 ° m C « 0 c c c ° C V a 0 c c c > 111 s o zzz n f0 Ln V r E v 3 a c ° ° °�' x E 3 ° 3 8 X M d V O o O 3 m N U 41 ' oN] c C sa eQ O p U R N �y 7 m It i L E c tom' O l9 d n U'4 Y C u Q N C N q C L 12 c ~ Lo : E N G 7 C t'i � dj U R C0 eJ m N n a �^ C j, c c 7U6 A O 4 N H `�' °c c c °c a ." a �°r, y, r 2 n co 06 is x Q 7 2� + N Q+ Page 53 O V a ¢ 6 £ c u � d N L« L L 3 u ° U V TJ i c « o � S%S N v v c v u a O O C � _? Q OG � u w Z 7 t O y d 3 m w � � C � C w � ] c QY � N � O d � w L 9 t O nJ r v p,I N a > U ` U a ] p o LL O U « O � w D U rs ? L u � c c Ey A E a � Z p « d � d A t o � u o o v 3 v Q r v �J 105 WASHINGTON AVE INVESTMENT ANALYSIS I While this provides security and protection for a tenant's vehicle, it does not provide the poten- tial additional storage that a garage would provide. On the other hand, the detached garage may not provide the same convenience that underground parking provides. After reviewing comparable storage unit facilities in the Oshkosh market, it is recommended that the single car garages be rented at $80 per month and the two car garages be rented at $150 per month. These rents, for both the residential units and the adjacent garages will be utilized in all subse- quent analyses. 3aa 1 i► LLB C L t> i ION Any proposed T1F assistance requested from the developers will be subject to the city's 75% rule which states that at most 75% of the net present value of the increment generated by the project shall be made available to the project. To calculate this increment we need both the present (base) value of the building as it exists now and the value of the project upon comple- tion. Base Valuation The present assessed value of the building at 105 Washington is $440,000. While the de- velopers purchased the subject property for $212,000 in May of 2014, this was a foreclosure purchase and therefore not an 'arms - length` sale. Thus we cannot find any substantive reason to use something other than the present assessment of $440,000. Completed Project Valuation To arrive at a valuation for the completed project we employed a modified income approach. With this approach, one simply takes the Net Operating Income (NOI) of a property and divides by the appropriate cap rate to arrive at a valuation. However, when arriving at a valuation for a tax assessment purpose, one needs to factor the property tax out of the NOI calculation or risk running into a circular argument. In this case we factor the taxes out by removing the taxes from the expenses and arrive at an Adjusted NO] via the formula NOI = EGI - (EXPENSE - TAXES). Then the adjusted NOI is divided by a loaded cap rate. Following the assessor's lead from pri- or analyses, we employed a loaded cap rate of 11 %. Data for the effective gross income (EGI) and other values can be found on the Profit and Loss Proforma with TIF on page 12. ._,:'' . Modj[ledincocrie'/�pproa <ti fay{ ulatlon .:TortlssefsmenlValuat[on... .,.;, ...,,. ;,.,....' Year 1 Year 2 Year 11 Amount Percent Amount Percent Amount Percent EGI 226,678 232,727 268,209 Expense 94,693 41,77% 116,631 50.110A 127,558 47.569€ Taxes 10,733 31,832 34,814 Adjusted N01 142,718 62.96% 147,928 63.56% 175,465 65.42% Loaded CAP RATE 11.00% 11,00% 11.00'% Valuation 1,297,400 1,344,800 1,595,100 Valuation from Taxes 437,457 1,297,400 1,418,947 The year 1 figures would suggest a valuation of $1,297,400 upon completion of the project. Subsequent analyses in this report use this figure. INVISTA- ANALYl-ICS.COM Page 54 LOT CONSTRUCTION ANALYSIS As previously indicated, the developers are seeking to acquire a portion of the city owned lot, located just south of the Washington building on parcel 0200620000, in order to provide ad- ditional surface lot parking along with detached garage units to service tenants of the subject property. The city will also retain a portion of the lot for public use. However, from an efficiency standpoint, it would seem to make sense that if substantial work is to be done on this lot, that both portions, i.e. that to be acquired by the developers, and the portion to be retained by the city, be updated at the same time. In what follows we attempt to provide a reasonable attempt at accounting for the costs and benefits to both the developers and the city. To find a valuation of the potential acquisition of a portion of the lot by the developers we first found some comparable privately -owned properties with asphalt paving parking lots located on them. The table below provides details on the comparable lots found on the City Assessor's website including square footage and total assessments. Figure 2 below provides a map of the comparable lots along with the subject property. From these comparables we find an average assessment of $2.64 per square foot. Applying this to the subject property with a total of 31,390 square feet results in a total valuation of $82,901 for the entire lot. Figure 2; Comparable Private Lot Locations Comparable Parking Lots FJPY, A I Owner Map Ind parcel Sq Ft Asmt Asmt /SF Fox River Development J West Rentals Burns Oregon St LLC M & D Enterprises 1 2 3 4 0400610000 0401630000 09007000M 0300890000 15,600 7,440 16,200 13,500 39,000 18,600 41,700 40,000 2300 2.500 2.574 2.963 Total 52,740 139,300 2.641 Subject property City of Oshkosh 5 0200620000 31,390 x 2.641 = $82,901 From these comparables we find an average assessment of $2.64 per square foot. Applying this to the subject property with a total of 31,390 square feet results in a total valuation of $82,901 for the entire lot. Figure 2; Comparable Private Lot Locations 105 WASHINGTON AVE INVESTMENT ANALYSIS Page 55 cn c•, FJPY, A I 025 -• r li Yl lnin9 A•re llshkati tl:riviy Are El � n 7 f1*_)r. Are t a4 4Y Fs+k�b /Rvt },«:k «t�Rr2 EP 4 ?°+ a,r�e kls1 R,r �4 R/ 9rifi MernliMe a 4 r e W F. � ASK ortc,"gV E 5 s + ! �� k� 1315 a'an{a4R • � �3aeA,ye a %i � � N � pk V1 F.rt SV n kri• .o 111111 W E,h lx P'ir ,rte Q1Q_ yl/ ,m � W I[rhAce t1Rh l:x a• 105 WASHINGTON AVE INVESTMENT ANALYSIS Page 55 Next we downloaded the GIS image of the lot off of the Assessor's website and loaded the image into CAD. Using the dimensions provided on the image, we calibrated the scale. Inset rectangles were overlayed to calculate the overall area (See Figure 3a on the following page). The total estimated area via this method was 32,160.45 Sq Ft, which was within 2.5% of what was listed on the assessor's data. Moreover, the intent of the use of the image was to find relative areas, thus even though this method found a slightly greater area, so long as the same method is used throughout, the relative areas might all be equally inflated and thus factor out, making the potential discrepancy irrelevant for this purpose. The developers are proposing that the city retain the south east section (red area in Figure 3b) of the lot adjacent to the building located on 300 State Street. Direct access would be provided off of State street along with a shared access from the south off of Waugoo Avenue (green area Figure 3b). The developers propose splitting this shared access evenly with the City. In this case the city would end up retaining 8,944.4 square feet of the parking lot or approxi- mately 27.8% while the developers would acquire the remaining 72.2% of the lot. Using these percentages the value of the portion of the lot that the developers would obtain would then be $59,845. The developers are proposing to repave the entire lot and provide landscaping such that the lot is up to modern engineering standards, including both the area to be retained by the city and the area to be acquired by the developers. IA reviewed the developers costs associated with the project and identified only those cost attributable to the repaving and landscaping. Without the developers fees, this totaled roughly $397,000. To calculate the amount of that attributable to the portion the city will retain, we estimated the total area minus the area of the garages to be built (grey in Figure 3c). Removing this, the city's portion would be 37.1 % of the total area to be completed. Thus the value of the work to be completed on the portion of the lot the city will retain under this plan is $147,276. Under this scenario, white the developers stand to gain from the acquisition of a portion of the land, the costs associated with the completion of the city's portion of the lot results In a net loss of $87,431. The developers are requesting that the City of Oshkosh contribute this amount for the comple- tion of this work. The subsequent analyses assume this will be the case. I INVISTA- ANALY- FICS.COM Page 56 Lot. Valuation and Paving Costs TotatLot city Shared Garages Area (Sq Ft) 32,160.45 6,850.00 4,188.80 8,038.88 Region Biue - Fig 3a Red - Fig 3b Green - Fig 3b Grey - Fig 3c Notes 50/50 split Entire Lot Lot - Garages City Discovery City Discovery Area Retained 8,944.40 23,216.05 8,944.40 15,177.17 Proportion Area Retained 27.81% 72.19% 37.08% 62.92% Value Retained /Acquired 23,056 59,845 147,276 249,903 Discovery Net Loss 147,276 - 59,845 = $87,431 The developers are proposing to repave the entire lot and provide landscaping such that the lot is up to modern engineering standards, including both the area to be retained by the city and the area to be acquired by the developers. IA reviewed the developers costs associated with the project and identified only those cost attributable to the repaving and landscaping. Without the developers fees, this totaled roughly $397,000. To calculate the amount of that attributable to the portion the city will retain, we estimated the total area minus the area of the garages to be built (grey in Figure 3c). Removing this, the city's portion would be 37.1 % of the total area to be completed. Thus the value of the work to be completed on the portion of the lot the city will retain under this plan is $147,276. Under this scenario, white the developers stand to gain from the acquisition of a portion of the land, the costs associated with the completion of the city's portion of the lot results In a net loss of $87,431. The developers are requesting that the City of Oshkosh contribute this amount for the comple- tion of this work. The subsequent analyses assume this will be the case. I INVISTA- ANALY- FICS.COM Page 56 Figure 3: Lot Area Calculations OVERALL INVESTMENT ANALYSIS Potential Income We first document the expected maximum revenue assuming the building and the garages are at full occupancy. The table on the following page utilizes the predicted rents for the apartment units and garages along with the number of each. In total the developers could anticipate a maximum annual income of $238,608 assuming these rents and full occupancy. 105 WASHINGTON AVE INVESTMENT ANALYSIS j Page 57 140 x 52.2 = 7,308 I a 100 x 85.5 = 8,5so :� F 129.9 x 1251 = 16,50245 i b V 100 x 68.5 = 6,850 • 38.5 x f 108.8= - �4,188.8 Woo C + ,' -srsn " - �P'�•iP'r�s�I:,- 1C°',_ v: sue.,+ OVERALL INVESTMENT ANALYSIS Potential Income We first document the expected maximum revenue assuming the building and the garages are at full occupancy. The table on the following page utilizes the predicted rents for the apartment units and garages along with the number of each. In total the developers could anticipate a maximum annual income of $238,608 assuming these rents and full occupancy. 105 WASHINGTON AVE INVESTMENT ANALYSIS j Page 57 Maximum Rental lk6f.1le Potentlal Unit Type No Units Ave Rent /Mo Subtotal 1 Bed /1 Bath 4 722 2,888 2 Bed /1 Bath 14 903 12,642 3 Bed /1 Bath 2 1,027 2,054 Subtotal 17,584 Garage Units No Units Ave Rent /Mo Subtotal 1 Car 10 80 800 2 Car 10 150 1,500 Subtotal 2,300 Monthly Total $19,884 Annual Total $238,698 Residential Annual $211,008 Garage Annual $27,644 Data published by the CoStar Group on multi- family vacancy rates over the past five years in Oshkosh shows a general downward trend with rates in 2010 as high as 5.17% in the fourth quarter, while the fourth quarter of 2015 was 3.08 %. The five year average was 4.1% during this period. Budget and Funding Next we look at the detailed budget and sources of income. The table on the next page lists all expected expenses separated out for the building and the parking lot/garage component of the project. The columns labeled TIF and HTC represent an indicator as to whether each expense is allowable for reimbursement for either the TIF funding mechanism or historical tax credits. Note the historic tax credits are only applicable to the building costs while the TIF can apply to both components of the project. We employed the Wisconsin Housing and Economic Develop- ment Authority's criterion for allowable expenses for the TIF basis estimation. Total expenses for the project reach a little under $3.9 million. Of those, approximately $2.44 million are allowable expenses for historic tax credits and $3.29 million are allowable TIF expenses. On the funding side, the developers have secured a funding commitment from Choice Bank in the amount of $2.025 million. In addition, the developers plan to sell the tax credits to raise initial capital to fund this project. To estimate a value of these credits we spoke with 2 tax credit brokers. Vickie Holland, with Dimension Development, LLC based out of Madison, WI, suggested a good estimate if the de- velopers were to bring in an equity partner would be 93 cents on the dollar for the federal cred- its and 60 cents on the dollar for the state credits. These estimates were confirmed by Donald Bernards, CPA and tax credit broker with Baker Tilly, again based out of Madison. Eking this estimate of value, we estimate the tax credits to be worth $742,845. With the city contributing towards the lot build -out, the developers will then bring $1,033,788 in cash to complete the project. INVISTA- ANALYTICS.CON Page 58 TIF Funding We assume that the project will be completed by November 2016 and that the assessor will apply the new assessed value before the first of the year, 2017. Thus the full value of the project will be on the 2017 tax year assessment and the Increment can be paid out in the fall of 2018. We assume the assessed value will increase at a rate of 1 % per year and that the base value will be $440,000. Thus over 25 years of proposed payout, the total increment will be $629,144. Applying the 75% rule the total note from the city due to the developer would be in the amount of $471,858. With a 2.05% interest rate, this note can be paid down over 25 years. (See TIF Nate payoff schedule on the following page.) 105 WAS[ IINGTON AV[-' INVE3TMf'NT ANALYSIS Page 59 Detailed Project Budget <- Ount Building Parking Lot Combined TIF HTC Notes Ac u €sit €on &site pre Land Acquisition 214,399 Demolition 108,200 1 1 Utilities /relocation 30,000 1 1 Hazardous Materials Removal 31 OW 1 1 Subtotal $383,599 $0 $383,599 Soft Costs Fees General Contractor I 1 GC built Into Hard Costs Architect/Engineer 76,900 29,800 106,700 1 1 Developer Fee (10%) 240,682 71,321 312,004 1 1 WHE0A allows 12 -15;5 Appraisal 4,800 4,600 Market Study 4,000 4,000 Historic Tax Consultant 51,000 51,000 Legal/Accounting 15,000 15,MO Insurance 2,500 2,500 Title /Recording/rransfer 5,000 5,000 Building Permit 10,821 6,000 16,821 Mortgage Fees 2,000 2,000 Construction Interest 56,000 56,000 1 1.19M @ 3.95 for 6 mo Marketing 5,000 5,000 Real Estate Taxes 10,733 I0,733 1.25 3/16/15- 6/10/16 Soft Cost Contin en 40000 400011 Subtotal $524,436 $107,121 $631,557 Hard Costs HTC Allowable 1,887,372 1,887,372 1 1 HTC Non - Allowable 273,350 713,21a 986 563 1 Subtotal $2,160,722 $713,213 $2,873,935 Total Project Costs 3 068 757 $820 334 $3,889,091 Hist Tax Credit Allowable Costs 2,443,570 TIF Allowable Casts 3,292,639 "- .Source of Funding Permanent Financing 2,025,000 2,025,000 Choice Bank Proceeds from HTC Sale 742,845 742,845 Lot ReconcfMatfon Funds 87,458 87,458 From City of Oshkosh Other Cash Funds 300 911 732,876 1,033,788 Cash from Developers ota t of unds 3 068 757 820 334 88 1 ii TIF Funding We assume that the project will be completed by November 2016 and that the assessor will apply the new assessed value before the first of the year, 2017. Thus the full value of the project will be on the 2017 tax year assessment and the Increment can be paid out in the fall of 2018. We assume the assessed value will increase at a rate of 1 % per year and that the base value will be $440,000. Thus over 25 years of proposed payout, the total increment will be $629,144. Applying the 75% rule the total note from the city due to the developer would be in the amount of $471,858. With a 2.05% interest rate, this note can be paid down over 25 years. 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The following assumptions were used to generate these: • Residential rental income will increase by $15 per month for each unit every year which works out to roughly a 1.7% increase. • Garage rental income will increase by 1.7% per year. • The first year vacancy rate will be 5% and will hold constant at 4.1 % per year thereafter. • Expenses including Maintenance and Repairs, Insurance, Manage- ment Fees, Professional Fees, Utilities and Trash, and Advertising will all increase by 1% per year. • Year 5 of the professional fees has a one-time increase of $3,500 for the close out of the relationship with the equity investor for the historic tax credits. • The first year will be taxed under the present assessment however subsequent years will start at 2.45% of the $1,297,400 value and increase by 1% per year in accordance with the TIF note payout schedule. • Capital reserves will increase by 1 % per year. • Debt service will be fixed over the first 10 years with a 25 year amorti- zation schedule and a 4.5% interest rate offered through Choice Bank. Estimated expenses were arrived by taking averages over the developers rental portfolio in the Oshkosh area. It as anticipated that the proposed development can be run with comparable efficiencies. The proforma with the TIF assistance starts with a negative cash flow in the first two years of in part due to the ramping up of occupancy in the first year and the lack of increment payment. By the third year we start to see positive cash flow. By the tenth year we see a positive cash flow of $23,263. The "without' TIF picture is much more bleak. Under this scenario the developers do not see any positive cash flow until the eleventh year, and even then the returns are modest at best. '105 WASI I1NG1'ON AVER INVES IVIENT ANALYSIS j Page 61 I Iwvasrn- ANALY] ics.COM Page 32 .4 00 w 00 s{ m m h co a n 00 o a n 00 .i o b o b O dl b D a N , m ap h b m 00 N a Ln Ll h r L w m O oo N n N d M H N 01 Q M l0 V N n f� M to Ip N a m N V1 V3 H V} a m to N [/� m N Vf M M V} N V> N uV 1A V! 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NVT H N IA V1 m N N N N .- co 00 n N a 00 N N O to h h m O b IA W n .i O l!1 a N O aR Ill N m a O M to o to b tp M M h 1, 00 IA CJ1 n O 2 d O T .� N O tl' O1 �-I O0 M N Ill lT3 H n nj N Ilj [r1 Lf1 N A M M N V} H a N H V1 A H e-I M ri N VT VT V} V1 VT N lHM1 4 h Oo 00 o w tT A to m m m 0o h d H b m n 7 O m b b n noa O co no ri a m m .-i N N tfI n v_r vm oo la 00 In m 00 l0 a .io 00 .4 -, W N O N m p Vi 00 M N Ill M O n N N t+5 V1 V Vl V} In m V1 N V/ N V} Vn N m V} M e-1 IN N H VT to m h a a O M N Q N rt a H 00 A tP m h b O N N Q o m tp m N? b A w N r-I t0 00 N h m r1 to N 00 ul to lD M A tl1 b M - tl 4 �' F .} [Il O N N O O oo t+'1 N tl1 R/ O n I-f tT f!l lf3 N :C' N M N lh V1 00 N N N A N H m .-1 .i N m N +R Vl -A iR 14 O V) m N 5 iN N 1? V} y J In 00 Ill c-I O N o e! m N In N o0 O t4 h O O m m O Ol m 111 H O vl l0 w N n ri N b A N W ro ll Ill O d tl1 of N % at to d O e} t0 N A d •+ m N N W N rJ tl1 n O A b M W H¢ N' m N tp V N N N N V} N A N V1 b N H m N N 14 M try V! V1 V} V1. N V V} M in d Q -. a 0o N lo b Q e4 o N I O N O W w b e-S n W Ca : O M h W O t0 11 IA 00 N N N h b H N N O a m a Dl *i a A s Loll M til o o a O ...: a, c-I N Q N 00 N lV M 6 n w M m VI Ili V, 'A N eq m .-I �-i Vf N to YF Vl N lA V} ei tY lh M1l N r V1 N l/T w Cta N' m 00 b to m h N N tl H N V V N N O A A rl; Ii N N m N .--t QI rI N w w m M O O O '.' 4j 0�0 N N 00 N o h n P, N N a 0'1 61 n n 1` O 0'1 111 N N H VS y sK V} Vl H m H H V} N N V} u1 v? Vh N ei Q Vf M N N H N N oo m w d o Q zn N O t.1 A O ry r1 N o n in o w m to o o ri A t/l m b A b m N Lo M m m to oo vi to n m N M b M m b I t o o b m _ 7 m .a fIi tTi M +: ti ri v ni eT n t6 I: rli tli I? H N N N VF V) l0 N N IA N H M ei H V} N V} Vl V} V? VT V1 M ei M VF M ei .i vy N V) N K N N 0o O O to O 00 o m O O O O o M In tl h m o o Ih O tp O b m m A b a m O N O a-i d n 0 Ill n N 011 b 00 tl t➢ w v } rF fv 00 H ID h O N a m a h d a tl C r[ m Vl O to ei N V! M N H u< N .i .--t e-i '-t V} N VT V} V> N Vf Vf a V1 M VT m Vi N en � E E Q aa C 3 16 •yCy O.F H i G p0 N N O m O�J o C w 0/ f0 H - ca C w U m C t6 A is Y V Ql N m M Ut' d R Ol a Z t d Y d C 7 N Y W C C Ci O N a N a` K °u y U C _� j tO INO a ~ rt C l7 I�u w I Iwvasrn- ANALY] ics.COM Page 32 1U5 WASI IINGT ON AVL INVF STME=NT ANALYSIS Page 63 .+ w co o m h c+ O V M Ol n W 'ct oo " v rn o N 9 tD V} P T h w W V O N N H M M co n LO m co N O O O m M M H l0 m W M O A N N A N T H W T V m t!i V N h A G M M N tl M Nn n N H N 1D N V1 VF Vl Vf V} lR N H ri ri H N N VR O co N O O h M Ol Ql tl a A H M M co H h O W O N N N M M Q1 N t0 N W to W H w r• W 61 M W l0 N O] N O H Q d M N N H v Ol M Vl H tri n M ul Q m V) A H tD H m H N V) M V> N M Vl N VT N 11 N 11 N V} 44 N Vl Cl co M O M N o Rt m V M A tO h M I$ Ql n M O W V1 {p W M Q6 M N H tD N m N Ql N O O (n H T A O m Q N If ko O N N O Gl O } O H ei H O W V N !Il 4 H n ui N M to M M M V} n H V1 tD H M H H Vi m Vb V! V} In V! V. N M eA M m N Vy N 90 co A n M co A N O W h h N O w O to A M n N n c l vt tD N M Ql b m M m to w w m m n rn W N Q; H h Q o H D 00 M ry n w n to H A' o w' tb crl r, tr cr H r- m N m tri -ti m m N V} w N .-I V! M N .-a m H H vi m +n V• t^ Vl VT V} N m v* m H rl H y N Vy VI V! VY V) h co co O t6 m A >D M o0 M co n a W tD M h tD O m VY v M 7 N 0o h M M w to m H N N M M V n O5 W lO W W tD M {. H e A a } N O M O N cp M N 'n m O' r` N Q1 M ll'1 o M M N Vf tD N H Vr M N H m M V! Vl V) V� N V) N rl r! H VT VY V? N y Vi lO W h O M O lA N V N m H W n m n M iy': O N N O O M O N lO W tl W N H tD w N A M tD N W to N LO a M tO M O N O h W 61 O Ol d 00 00 M N vl cr O r, m m A N m V) to N H VT N H M H r-I V1 m V} V! N VT V1 V} N N Vl m " W V} VH1 }S 7: QV1 co m O M N ri O w n O q pe m u1 w _] , n N V? tl to M Q1 M tl 09 O m cO H Ln H O N n tl H M N Ln W H to c* H O M L. C. Y w Vl Qi 7 O M c (!1 .. N N N V} M H H N N H M H H V? M VI VL V/ VT V/ +A N N V} m e4 4 Vl iWA VH} O: :G: Q co N O O V M O N O N O M w O H h O1 i Q p m U! is M O 7 DO W N M +A N h D H N N n V m at W m a n W Ql o Ol M Q O A M 'c : .emu, H al O O O c0 N N ct M Ql h of 'r w Q .i+ N N Vf M � H iA It � H m H M V} N lA V` V1 V1 to VF ai N VT M rc ta h. 3: M W w O Q n n N H V)- L O tf u} M H M O N V tl M ct M tl .--I h N M co pp O h m Q w to w c0 p ri m N M to to n tp H O w %6 oo H N c h tD m h r N V M Qi r` A WW c O r` m Vj q m N V! Q N M H M H H VS N to Vf to VF VT N [A {N 44 �4 M N O M n O N W to O h W O tD Vl R lo O A tD Ill Gl N A tD M N tO M m co �R W H t0 n m N M QI m tO [D O 0 0 O O N N 61 t- tD t0 M N N N V) N {V m H H V> N Vl VT V> VF N Vl W H VA m W H H N to VT V4 N V} VI to oo Q 0 m O co O m n 0 0 0 0 M M O h M -, O Q V} O lO 4 to m Ql A tO tT M n N O tl H tl h n Vl A O N m 00 O w tD Ql O p CD O H h. 00 H tD h O N cr M T A Q H M Ill to H N m H N H H H H V} N of Ql M VY m VI V} VL VS V) V! + w O ? Ln E o ec 0 v o u a E U c 4i % IL CJ N N m U K i t4 N N CJ ice- C Z m V L° c w c ¢� aV1 ? •Y! ty c cc O a LL N U 16 V N t6 O u to j� O a+ �, U O N o_ l7 H 7 X n. Q o d a u AL w w .v°" Z u O 2 1U5 WASI IINGT ON AVL INVF STME=NT ANALYSIS Page 63 Return On Investment In order to calculate the Internal Rate of Return (IRR) we first need to calculate an assumed reversion at the end of year ten. To do this we use the N01 from year eleven and divide by a terminal cap rate. We again follow the lead of the assessor and use the 11% loaded cap rate and subtract off the presumed mill rate of 2.45 %, then rounding down (which provides more presumed value) we arrive at a non - loaded cap rate of 8 %. This results in a valuation of $2.06 million in the TIF scenario. However after 10 years there would still be $1,471,334 left to pay off on the mortgage. Thus a net reversion of $587,035 is used in addition to the year 10 net cash flow. This leads to a 10 year Internal Rate of Return of - 4.22 %. A similar calculation With- out TIF leads to an IRR of - 13.68 %, again, a very bleak prospect for this investment. I INVISi-A- ANALY1'ICS.COM Page 64 ;Return onlneestment Metila With TIF Without TIF Net Cash Flow Reversion Total Net Cash Flow Reversion Total - 1,033,788 - 1,033,788 - 1,033,788 - 1,033,788 Initial Cash Outlay Year 1 6,083 -6,083 -6,083 -6,083 Year 2 -965 -965 - 22,001 - 22,001 Year3 2,067 2,067 - 19,288 -19,28 Year 5,098 5,098 16,579 - 16,579 Year 5 4,627 4,627 - 17,374 - 17,374 Yea r6 11,156 11,156 - 11,173 - 11,173 Year? 14,184 14,184 -8,476 .8,47 Year 17,211 17,211 -5,783 -5,783 Year 20,238 20,238 -3,095 -3,095 Year 10 23,263 587,035 610,298 -410 286,804 286,394 Yr 11 N01 164,670 140,651 Terminal Cap Rate 8.001A 8,001A Gross Reversion 2,058,369 1,758,138 Mortgage Payoff 1,471,334 1,471,334 Net Reversion 587,035 286,804 10yr IRR => -4.22% 10yr IRR => - 13.68% I INVISi-A- ANALY1'ICS.COM Page 64 The findings presented herein are based upon the information available and received at the time this report was compiled. Invista Analytics (IA) has taken every possible precau- tion to evaluate this information for its completeness, accuracy and reliability. To the best of its knowledge, IA feels the information and conclusions presented herein are sound and reliable. It should also be understood that normal economic and marketplace conditions change con- stantly. IA assumes no responsibility for information that becomes outdated once this report is written; nor is it responsible for keeping this information current after April 29, 2016. The results presented in this report are the professional opinion of IA and are based on the information available at this time. These opinions infer proper and professional management of the business operation. The opinions also infer that market conditions do not change the information received upon which these opinions are based. IA assumes no responsibility for changes in market conditions. Furthermore, it is assumed that the reader of this report completely understands its contents, assumptions and recommendations. If the reader does not fully understand the contents contained herein, clarification should be sought from Invisla Analytics. Finally, JA assumes no responsibility should the management of the proposed business ven- ture deviate from any recommendations that may have been provided in this report. Any further questions about this report should be directed to IA. Sincerely, Zen— Timothy Hess, PhD INVlgTA ANALYTICS 146 Algoma Blvd - Suite H Oshkosh, W154901 920.203.2177 w wr.invista -a natytics.com 105 WASI IINGTON AVE INVESTMI NT ANALYSIS � Page 65 iNUiSTA ANALYTICS. Page 66