HomeMy WebLinkAboutItem V-Project Plan
Organizational Joint Review Board Meeting: Scheduled for May 2, 2017
Public Hearing: Scheduled for May 2, 2017
Approval by Plan Commission: Scheduled for May 2, 2017
Adoption by Common Council: Scheduled for May 23, 2017
Approval by the Joint Review Board: Scheduled for May 30, 2017
April 24, 2017
Project Plan for the Creation of
Tax Incremental District No. 32
(Granary Rehabilitation)
Tax Incremental District No. 32 Creation
Project Plan
City of Oshkosh Officials
Common Council
Steve Cummings Mayor
Steve Herman Deputy Mayor
Debra L. Allison-Aasby Council Member
Lori Palmeri Council Member
Caroline Panske Council Member
Thomas R. Pech, Jr. Council Member
Jake Krause Council Member
City Staff
Mark Rohloff City Manager
Allen Davis Community Development Director
Lynn Lorenson City Attorney
Darryn Burich Planning Director
Kelly Nieforth Economic Development Services Manager
Trena Larson Finance Director
Pamela Ubrig City Clerk
Plan Commission
David Borsuk Karl Nollenberger
Edward Bowen Kathleen Propp
Thomas Fojtik, Chair Jeffrey Thoms
John Hinz Robert Vajgrt
John Kiefer Mayor Steve Cummings
Joint Review Board
Mark Rohloff, City Manager City Representative
Mark Harris, County Executive Winnebago County
Melissa Kohn, Director – Oshkosh Campus Fox Valley Technical College District
Allison Garner, School Board President Oshkosh School District
Bill Castle Public Member
Table of Contents
EXECUTIVE SUMMARY .............................................................................................................................. 4
TYPE AND GENERAL DESCRIPTION OF DISTRICT ................................................................................ 7
PRELIMINARY MAPS OF PROPOSED DISTRICT BOUNDARY ............................................................... 8
MAPS SHOWING EXISTING USES AND CONDITIONS.......................................................................... 10
PRELIMINARY PARCEL LIST AND ANALYSIS ........................................................................................ 12
EQUALIZED VALUE TEST ........................................................................................................................ 13
STATEMENT OF KIND, NUMBER AND LOCATION OF PROPOSED PUBLIC WORKS AND OTHER
PROJECTS ................................................................................................................................................. 14
MAP SHOWING PROPOSED IMPROVEMENTS AND USES .................................................................. 17
DETAILED LIST OF PROJECT COSTS .................................................................................................... 19
ECONOMIC FEASIBILITY STUDY, FINANCING METHODS, AND THE TIME WHEN COSTS OR
MONETARY OBLIGATIONS RELATED ARE TO BE INCURRED ........................................................... 20
ANNEXED PROPERTY .............................................................................................................................. 25
ESTIMATE OF PROPERTY TO BE DEVOTED TO RETAIL BUSINESS ................................................. 25
PROPOSED ZONING ORDINANCE CHANGES ....................................................................................... 25
PROPOSED CHANGES IN MASTER PLAN, MAP, BUILDING CODES AND CITY OF OSHKOSH
ORDINANCES ............................................................................................................................................ 25
RELOCATION ............................................................................................................................................. 25
ORDERLY DEVELOPMENT OF THE CITY OF OSHKOSH ..................................................................... 26
LIST OF ESTIMATED NON-PROJECT COSTS ........................................................................................ 26
OPINION OF ATTORNEY FOR THE CITY OF OSHKOSH ADVISING WHETHER THE PLAN IS
COMPLETE AND COMPLIES WITH WISCONSIN STATUTES 66.1105 ................................................. 27
CALCULATION OF THE SHARE OF PROJECTED TAX INCREMENTS ESTIMATED TO BE PAID BY
THE OWNERS OF PROPERTY IN THE OVERLYING TAXING JURISDICTIONS ................................. 28
APPENDIX A – TAX INCREMENT FINANCING APPLICATION………………………………….…………29
APPENDIX B – MARKET STUDY AND INVESTMENT ANALYSIS REPORT (INVESTA-ANALYTICS).39
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 4 April 20, 2017
SECTION 1:
Executive Summary
Description of District
Type of District, Size and Location
Tax Incremental District (“TID”) No. 32 (the “TID” or “District”) is a proposed 0.45-acre district in need
of rehabilitation or conservation, located at the northeast and southwest corners of the intersection of
West 6th Avenue and Nebraska Street. Creation of the District is intended to facilitate rehabilitation of the
historic H.P. Schmidt Mill building, subsequently the site of The Granary restaurant. The building, which
has sat idle for a decade, would be renovated to create 5,459-sq. ft. of office space on the first and second
floors. The non-original addition to the main mill structure would be renovated into a 4,059-sq. ft.
brewpub and restaurant. A future build out of the third floor of the main mill structure for use as office
space is projected to occur in 2021. The project also includes construction of a new parking lot on the
southwest lot on the corner of West 6th Avenue and Nebraska Street and milling with overlay and curb on
a portion of 5th Avenue to facilitate additional on-street parking. A map of the proposed District
boundaries can be found in Section 3 of this plan.
Estimated Total Project Expenditures.
The City anticipates making total Project Cost expenditures of
approximately $710,000 to facilitate rehabilitation of the main
mill structure, the addition and the parking lot. The estimated
expenditures include $661,806 in projected development
incentives to be made on a “pay as you go” basis, and $47,500 for
administrative expenses that will be incurred over the life of the
District.
Economic Development
The City projects that additional land and improvement value of
approximately $1.68 million will result from the rehabilitation
project and subsequent economic appreciation. This additional
value will be a result of the improvements made and projects undertaken within the District. A table
detailing assumptions as to the redevelopment timing and associated values is included 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 22-years. The statutory maximum life of the District would be 27-years.
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 5 April 20, 2017
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:
At the City’s request, Ehlers completed a limited independent review of the developer’s sources
and uses, and cash flow proforma for project. The developer’s projected return on investment
over 10 years without TIF assistance is 1.95%, and improves to 4.72% with TIF assistance in a
present value amount of $369,105. (Projected future value payments of $661,806). Both return on
investment numbers are at a level that would not attract interest in the project from a typical
investor. The developer has cited their interest in being a participant in the City’s redevelopment
efforts in this area and a commitment to the community as their motivation for involvement in the
project. Based on Ehlers review, TIF assistance in the amount requested is warranted as the
projected return on investment will still be below market even with assistance.
The structure has suffered from a lack of maintenance over the past decade. Significant water
penetration has occurred leading to mold issues that will require remediation. The age of the
structure, current condition and fact that the site has been vacant and underutilized for more than
a decade suggest that absent the use of TIF, redevelopment is unlikely to occur.
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 proposed project costs. On this basis alone,
the finding is supported.
The developer has reported that the proposed office space tenant has hired eight new full-time
employees in anticipation of an expanded office, and that the restaurant is expected to create the
equivalent of 10 full-time jobs upon opening.
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, 2017. As of this date, the values of all existing development 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, 2017 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 #1) 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
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 6 April 20, 2017
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)(i)4., a calculation of the share of projected tax increments estimated to be paid by the
owners of property in the overlying taxing jurisdictions has been 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 findings, as stated 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.
6. The project costs relate directly to promoting the rehabilitation of the area consistent with the purpose
for which the District is created.
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.
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 7 April 20, 2017
SECTION 2:
Type and General Description of District
The District, comprising 0.45 acres located at the northeast and southwest corners of the intersection of
West 6th Avenue and Nebraska 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)(b). The preliminary parcel list
included in Section 5 to this Plan identifies those parcels meeting those criteria. Collectively, these
parcels represent 53.33% of the total District area.
Creation of the District is intended to facilitate rehabilitation of the historic H.P. Schmidt Mill building. A
preliminary map of the proposed District boundary can be found in Section 3 of this Plan.
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 8 April 20, 2017
SECTION 3:
Preliminary Maps of Proposed District Boundary
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 9 April 20, 2017
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 10 April 20, 2017
SECTION 4:
Maps Showing Existing Uses and Conditions
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 11 April 20, 2017
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 12 April 20, 2017
SECTION 5:
Preliminary Parcel List and Analysis
City of Oshkosh, WI
Tax Increment District #32
Base Property Information
Parcel NumberStreet AddressOwnerAcreageLandImpTotal
Equalized
Value
Ratio2 LandImpTotalBlighted
Rehab/
Conservation3
03‐0010‐000050 W 6TH AVE50 WEST 6TH STREET LLC0.24031,700274,400306,10099.76%31,776275,060306,8360.240
03‐0019‐00000 W 6TH AVEREDEVELOPMENT AUTH CITY OF OSHKOSH0.210000199.76%000
Anticipated 1‐1‐2017 Reduction in Value Based on Sale (196,836)
Total Acreage0.450 31,700274,400306,10031,776275,06000.240
0.00%53.33%
110,000
NOTES:
1Property and assessment information per City of Oshkosh Parcel Viewer on 4‐12‐2017.
2Equalization ratio as of January 1, 2016 as published by the Wisconsin Department of Revenue.
3Properties within the District meet the definition of requiring "rehabilitation or conservation work" as set forth in Wis. Stat. § 66.1337(2m)(a)1. ‐ "Carrying out plans for a program of voluntary or
3compulsory repair and rehabilitation of buildings or other improvements."
Assessment Information1 Equalized ValueDistrict ClassificationProperty Information2
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 13 April 20, 2017
SECTION 6:
Equalized Value Test
The following calculations demonstrate that the City is 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 $264,138,900. This value is less than the maximum of $453,147,036
in equalized value that is permitted for the City of Oshkosh. The City therefore expects to be in
compliance with the statutory equalized valuation test and may proceed with creation of this District.
District Creation Date7/1/2017
Valuation DataPercentValuation Data
Currently AvailableChangeEst. Creation Date
2016
Total EV (TID In)3,776,225,3003,776,225,300
12% Test453,147,036453,147,036
Total Existing Increment264,138,9000
Projected Base of New District110,000110,000
Total Value Subject to 12% Test264,248,900110,000
Compliance PASSPASS
City of Oshkosh, WI
Tax Increment District #32
Valuation Test Compliance Calculation
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 14 April 20, 2017
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
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.
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.
Streets and Streetscape
Street Improvements
There are inadequate street improvements serving areas of the District. To allow redevelopment to occur,
the City may need to construct and/or reconstruct streets, highways, alleys, access drives and parking
areas. Eligible Project Costs include, but are not limited to: excavation; removal or placement of fill;
construction of road base; asphalt or concrete paving or repaving; installation of curb and gutter;
installation of sidewalks and bicycle lanes; installation of culverts, utility relocation, street lighting;
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 15 April 20, 2017
installation of traffic control signage and traffic signals; pavement marking; right-of-way restoration;
installation of retaining walls; and installation of fences, berms, and landscaping.
Streetscaping and Landscaping
To attract redevelopment consistent with the objectives of this Plan, the City may install amenities to
enhance development sites, rights-of-way and other public spaces. These amenities include, but are not
limited to: landscaping; lighting of streets, sidewalks, parking areas and public areas; installation of
planters, benches, clocks, tree rings, trash receptacles and similar items; and installation of brick or other
decorative walks, terraces and street crossings. These and any other similar amenities installed by the City
are eligible Project Costs.
RDA Type Activities
Contribution to Redevelopment Authority
As provided for in Wisconsin Statue Sections 66.1105(2)(f)1h 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.
Projects Outside the Tax Increment District
Pursuant to Wisconsin Statutes Section 66.1105(2)(f)1.n, the City may undertake projects within territory
located within one-half mile of the boundary of the District provided that: 1) the project area is located
within the City’s corporate boundaries and 2) the projects are approved by the Joint Review Board. The
cost of projects completed outside the District pursuant to this section are eligible project costs, and may
include any project cost that would otherwise be eligible if undertaken within the District. The City may
find it necessary to make the following project cost expenditures outside the District in the public rights-
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 16 April 20, 2017
of-way adjacent to the District’s boundaries: amenities to enhance public spaces such as landscaping;
lighting of streets, sidewalks, parking areas and public areas; installation of planters, benches, tree rings,
trash receptacles; and installation of brick or other decorative walks, terraces and street crossings.
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.
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 17 April 20, 2017
SECTION 8:
Map Showing Proposed Improvements and Uses
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 18 April 20, 2017
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 19 April 20, 2017
SECTION 9:
Detailed List of Project Costs
All costs are based on 2017 prices and are preliminary estimates. The City reserves the right to increase
these costs to reflect inflationary increases and other uncontrollable circumstances between 2017 and the
time of construction. 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 TIF Project Cost Estimates
ProjectedEstimated
Project IDProject Name/TypeYearCost
1Development Incentive Payments2019 ‐ 2038661,806
2Administrative Expense2017 ‐ 204247,500
3
4
5
Total Projects709,306
City of Oshkosh, WI
Tax Increment District #32
Estimated Project List
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 20 April 20, 2017
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.
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 redevelopment expected to occur, 2) a projection of tax increments to be
collected resulting from that 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, 2016, the City had approximately $48.6 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.
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 21 April 20, 2017
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 (RDA). 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 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 & Timeline
The City anticipates making total Project Cost expenditures of approximately $710,000 to facilitate
rehabilitation of the main mill structure, the addition and the parking lot. The estimated expenditures
include $661,806 in projected development incentives to be made on a “pay as you go” basis, and
$47,500 for administrative expenses that will be incurred over the life of the District. Expenditures are
expected to be made in the timeframes identified on the Detailed List of Project Costs included in Section
9, and will be paid from tax incremental revenues of the District as those revenues are received. While the
City could borrow funds in the implementation of this Plan, it does not expect to do so. The City expects
to advance funds to the District as needed to pay the costs of professional and other services related to
creation of the District and it administration during the District’s initial two years when no increment will
be generated. These advances will be repaid as funds become available. Development incentive payments
will be made only following receipt of associated tax increment revenue from the Project, and will be
limited to no more than 90% of the available increment.
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.
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Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 22 April 20, 2017
Development Assumptions
Actual Brew Pub &
Office Space2
Third Floor
Buildout
Additional
Lot
Personal
Property Annual Total
12017929,50030,00075,0001,034,50020171
22018 (15,000)(15,000)20182
32019 (15,000)(15,000)20193
42020 (15,000)(15,000)20204
52021326,474 (15,000)311,47420215
62022 (15,000)(15,000)20226
72023 020237
82024 020248
92025 020259
102026 0202610
112027 0202711
122028 0202812
132029 0202913
142030 0203014
152031 0203115
162032 0203216
172033 0203317
182034 0203418
192035 0203519
202036 0203620
Totals0929,500326,47430,00001,285,974
Notes:
1Assumptions as to incremental value and timing taken from Invista Analytics, LLC report dated 4‐10‐2017.
2Projected initial building valuation of $1,039,500 less estimated $110,000 TID base value.
Construction
Year
Construction
Year
City of Oshkosh, WI
Tax Increment District #32
Development Assumptions1
______________________________________________________________________________________________
Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 23 April 20, 2017
Increment Revenue Projections
Type of DistrictBase Value110,000
District Creation DateAppreciation Factor1.00%x Apply to Base Value
Valuation DateJan 1,2017Base Tax Rate$26.98
Max Life (Years)Rate Adjustment Factor
Expenditure Period/Termination227/1/2039
Revenue Periods/Final Year272045
Extension Eligibility/YearsYes3Tax Exempt Discount Rate3.00%
Recipient DistrictTaxable Discount Rate4.50%
Construction
YearValue AddedValuation Year
Inflation
Increment
Total
IncrementRevenue YearTax Rate1 Tax Increment
Tax Exempt
NPV
Calculation
Taxable NPV
Calculation
120171,034,50020181,034,5002019$26.98 27,914 27,10126,712
22018 ‐15,000201911,4451,030,9452020$26.98 27,818 53,32252,186
32019 ‐15,000202011,4091,027,3542021$26.98 27,721 78,69176,478
42020 ‐15,000202111,3741,023,7282022$26.98 27,623 103,23499,642
52021311,474202211,3371,346,5392023$26.98 36,334 134,576128,798
62022 ‐15,000202314,5651,346,1052024$26.98 36,322 164,995156,690
720230202414,5611,360,6662025$26.98 36,715 194,848183,669
820240202514,7071,375,3722026$26.98 37,112 224,144209,765
920250202614,8541,390,2262027$26.98 37,513 252,895235,008
1020260202715,0021,405,2282028$26.98 37,917 281,109259,424
1120270202815,1521,420,3812029$26.98 38,326 308,796283,040
1220280202915,3041,435,6842030$26.98 38,739 335,967305,883
1320290203015,4571,451,1412031$26.98 39,156 362,631327,978
1420300203115,6111,466,7532032$26.98 39,578 388,796349,349
1520310203215,7681,482,5202033$26.98 40,003 414,473370,019
1620320203315,9251,498,4452034$26.98 40,433 439,669390,012
1720330203416,0841,514,5302035$26.98 40,867 464,394409,349
1820340203516,2451,530,7752036$26.98 41,305 488,657428,052
1920350203616,4081,547,1832037$26.98 41,748 512,465446,142
2020360203716,5721,563,7552038$26.98 42,195 535,827463,638
2120370203816,7381,580,4922039$26.98 42,647 558,752480,559
2220380203916,9051,597,3972040$26.98 43,103 581,247496,925
2320390204017,0741,614,4712041$26.98 43,563 603,320512,754
2420400204117,2451,631,7162042$26.98 44,029 624,979528,063
2520410204217,4171,649,1332043$26.98 44,499 646,232542,869
2620420204317,5911,666,7242044$26.98 44,973 667,086557,189
2720430204417,7671,684,4922045$26.98 45,453 687,548571,038
Totals1,285,974398,518Future Value of Increment1,043,606
Notes:
1Tax rate shown is actual TID Interim Rate for the 2016/17 levy per DOR Form PC‐202 (Tax Increment Collection Worksheet).
City of Oshkosh, WI
Tax Increment District #32
Tax Increment Projection Worksheet
Rehabilitation
July 1, 2017
27
Yes
____________________________________________________________________________________________
Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 24 April 17, 2017
Cash Flow
City of Oshkosh, WI
Tax Increment District #32
Cash Flow Projection
Year
Present Value
1.00%5.75%Year
2017 0 010,00010,000 (10,000)(10,000)2017
2018 (100)(100)01,5001,500 (1,600)(11,600)2018
201927,914 (116)27,798 25,12323,7571,500 26,623 1,175 (10,425)2019
202027,818 (104)27,714 25,03646,1441,500 26,536 1,178 (9,247)2020
202127,721 (92)27,629 24,94967,2411,500 26,449 1,180 (8,067)2021
202227,623 (81)27,543 24,86187,1201,500 26,361 1,182 (6,886)2022
202336,334 (69)36,265 32,700111,8461,500 34,200 2,065 (4,821)2023
202436,322 (48)36,274 32,690135,2201,500 34,190 2,084 (2,737)2024
202536,715 (27)36,688 33,044157,5621,500 34,544 2,144 (593)2025
202637,112 (6)37,106 33,401178,9181,500 34,901 2,2051,6122026
202737,51316 37,529 33,761199,3301,500 35,261 2,2673,8802027
202837,91739 37,956 34,126218,8411,500 35,626 2,3316,2102028
202938,32662 38,388 34,494237,4901,500 35,994 2,3958,6052029
203038,73986 38,825 34,865255,3151,500 36,365 2,46011,0652030
203139,156111 39,267 35,241272,3521,500 36,741 2,52613,5912031
203239,578136 39,713 35,620288,6361,500 37,120 2,59416,1852032
203340,003162 40,165 36,003304,2011,500 37,503 2,66218,8472033
203440,433188 40,621 36,389319,0771,500 37,889 2,73221,5792034
203540,867216 41,083 36,780333,2951,500 38,280 2,80224,3812035
203641,305244 41,549 37,175346,8851,500 38,675 2,87427,2552036
203741,748273 42,020 37,573359,8731,500 39,073 2,94730,2032037
203842,195302 42,497 37,975372,2867,500 45,475 (2,978)27,2242038
203942,647272 42,9190 42,91970,1432039
204043,103701 43,8040 43,804113,9472040
204143,5631,139 44,7030 44,703158,6502041
204244,0291,587 45,6150 45,615204,2662042
204344,4992,043 46,5410 46,541250,8072043
204444,9732,508 47,4810 47,481298,2892044
204545,4532,983 48,4360 48,436346,7242045
Total1,043,60612,424 1,056,030 661,80647,500 709,306 Total
Notes:
1Percentage, term and interest rate shown for purposes of establishing economic feasibility only. The City has not
1agreed to terms or conditions with the proposed developer as to any public participation in the project.
Projected TID Closure
Total
Expenditures AnnualCumulative
Principal
Outstanding
Total
Revenues
Dev. Incentive
Payments
Projected RevenuesExpendituresBalances
Interest
Earnings/
(Cost)
Pay As You Go (PAYGO)
Developer Obligation1
Admin.
Tax
Increments
____________________________________________________________________________________________
Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 25 April 20, 2017
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)1, 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 RMU-PD (Riverfront Mixed Use – Planned Develeopment) and UMU
(Urban Mixed Use) zoning.
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
Implementation of this Plan will not require relocation of individuals or business operations. If relocation
were to become necessary, it 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. 32 Creation City of Oshkosh
Prepared by Ehlers Page 26 April 20, 2017
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
development of the City of Oshkosh by eliminating blight and encouraging redevelopment of an
underutilized site. 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 increased employment opportunities and increased demand for retail, service and hospitality related
services.
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 expect to incur any non-project costs in the implementation of this Project Plan.
____________________________________________________________________________________________
Project Plan TID No. 32 Creation City of Oshkosh
Prepared by Ehlers Page 27 April 20, 2017
SECTION 18:
Opinion of Attorney for the City of Oshkosh Advising
Whether the Plan is Complete and Complies with
Wisconsin Statutes 66.1105
____________________________________________________________________________________________
Project Plan TID No. 32 Creation City of Oshkosh
Submitted by Ehlers Page 28 April 20, 2017
Exhibit A:
Calculation of the Share of Projected Tax Increments
Estimated to be Paid by the Owners of Property in the
Overlying Taxing Jurisdictions
Statement of Taxes Data Year:2015Percentage
Winnebago County19,019,11319.58%
City of Oshkosh40,658,28941.85%
School District of Oshkosh Area33,555,43834.54%
Fox Valley Technical College3,910,2344.03%
Revenue Year
Winnebago
CountyCity of Oshkosh
School District
of Oshkosh
Area
Fox Valley
Technical
CollegeTotalRevenue Year
20195,46511,6839,6421,12427,9142019
20205,44611,6439,6091,12027,8182020
20215,42711,6029,5761,11627,7212021
20225,40811,5619,5421,11227,6232022
20237,11415,20712,5511,46336,3342023
20247,11115,20212,5461,46236,3222024
20257,18815,36712,6821,47836,7152025
20267,26615,53312,8191,49437,1122026
20277,34415,70112,9581,51037,5132027
20287,42415,87013,0981,52637,9172028
20297,50416,04113,2391,54338,3262029
20307,58516,21413,3811,55938,7392030
20317,66616,38813,5251,57639,1562031
20327,74916,56513,6711,59339,5782032
20337,83216,74313,8181,61040,0032033
20347,91616,92313,9661,62840,4332034
20358,00117,10414,1161,64540,8672035
20368,08717,28814,2681,66341,3052036
20378,17417,47314,4211,68041,7482037
20388,26117,66014,5751,69842,1952038
20398,35017,84914,7311,71742,6472039
20408,43918,04014,8891,73543,1032040
20418,52918,23315,0481,75443,5632041
20428,62018,42815,2091,77244,0292042
20438,71218,62515,3711,79144,4992043
20448,80518,82315,5351,81044,9732044
20458,89919,02415,7001,83045,4532045
204,322436,791360,48542,0081,043,606
Note: The projection shown above is provided to meet the requirements of Wisconsin Statute 66.1105(4)(i)4.
Estimated portion of taxes that owners of taxable property in each taxing jurisdiction
overlaying district would pay by jurisdiction.
City
of
Oshkosh
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 and 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: ________________________________________________________________________
Mailing Address: ____________________________________________________________________
Primary Contact #: _______________________________ Cell #: ___________________________
E-mail: _________________________________________ FAX #: ___________________________
Attorney:___________________________________________________________________________
Legal Entity: Individual(s)_____ Joint Tenants_____ Tenants in Common_____ Corporation_____
LLC_____ 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:
_________________ __________________________________ ______________ ___________
_________________ __________________________________ ______________ ___________
_________________ __________________________________ ______________ ___________
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___
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_____
If yes, please furnish details:_____________________________________________________________
___________________________________________________________________________________
Applicant Information:
8
Tim Hess 240 Algoma Blvd Suite A Member / owner 25%
Appendix A - Page 29
City
of
Oshkosh
Tax Incremental Financing
Policy and Application
Project/Property Summary:
Overall Project Summary and Objectives: ______________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Current and Proposed Uses: _________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Description of End Users: ___________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
________________________________________________________________________________________
Describe any zoning changes that will be needed:
____________________________________________
____________________________________________
____________________________________________
____________________________________________
____________________________________________
Property Summary:
Parcel/Land Area: ___________ SF
Building Area: ______________ SF
# of Dwelling Units: __________
# of Stories: _________________
# of Parking Spaces: __________
Identify any other approvals, permits or licenses (i.e. Liquor License, Health Department, etc):
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
Describe briefly what the project will do for the property and neighborhood:
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
_______________________________________________________________________________________
9 Appendix A - Page 30
Final Plan/Specification Preparation: ____________________________________________________
Bidding and Contracting: _____________________________________________________________
Firm Financing Approval: ____________________________________________________________
Construction/Rehabilitation: __________________________________________________________
Landscaping/Site Work: ______________________________________________________________
Occupancy/Lease Up: ________________________________________________________________
City
of
Oshkosh
Tax Incremental Financing
Policy and Application
Project/Property Summary:
Project Timetable Date
Development Team
Developer: _________________________________________________________________________
Architect: __________________________________________________________________________
Surveyor: __________________________________________________________________________
Contractor: _________________________________________________________________________
Other Members: _____________________________________________________________________
Describe Team expertise and experience in developing similar projects:
___________________________________________________________________________________
___________________________________________________________________________________
Other current Team projects in development:
___________________________________________________________________________________
___________________________________________________________________________________
Financial ability of the applicant to complete the project:
___________________________________________________________________________________
___________________________________________________________________________________
Full and part-time jobs to be created by the proposed project including estimated salary:
___________________________________________________________________________________
___________________________________________________________________________________
Professional Studies
Market Studies: Applications for commercial and residential projects must include a comprehensive market
study. The market study must identify target markets, analysis of competition, demographics, market rents,
letters of intent/interest from prospective tenants, or for housing developments, sale prices or rental rates of
comparable properties.
Appraisal: All projects that involve the transfer of land must include a recent appraisal. Projects that include
land as a form of equity or collateral must also submit a recent appraisal. The appraisal must value the property
“as is”, and the impact on value must be considered for such items as demolition, environmental remediation,
relocation of utilities, lease buy-outs, and other work necessary to make the site developable. The property
must be valued assuming that the highest and best use is the proposed use.
10
8 full time positions.
Appendix A - Page 31
City
of
Oshkosh
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.
Project Budget/Financial Information:
Uses of Funds Amount ($) $ per SF of Building Area
Land Acquisition: _____________________________________________________________________
Demolition: _________________________________________________________________________
Environmental Remediation: ____________________________________________________________
Site Clearance and Preparation: __________________________________________________________
Soft Costs/ Fees: ______________________________________________________________________
Soft Cost Contingency: _________________________________________________________________
Hard Construction Costs: _______________________________________________________________
Total Project Costs: ____________________________________________________________________
Sources of Funds % of total project costs
Equity
Developer Equity: $______________ __________%
Other Equity:(_______________) $______________ __________%
Total Equity: $______________ __________%
Loans Rate Term
Construction Financing: $_____________ ______% _________ mos.
Permanent Financing: $_____________ ______% _________ yrs. __________%
TIF Assistance $_____________ __________%
Other: (________________) $______________ __________%
Total Sources of Funds $______________ 100%
Financing
Source Amount Terms: Years/Interest Contact Information
Equity: _____________________________________________________________________________
Loans 1: _____________________________________________________________________
2: _____________________________________________________________________
3: _____________________________________________________________________
4: _____________________________________________________________________
11 Appendix A - Page 32
City
of
Oshkosh
Tax Incremental Financing
Policy and Application
Supplemental Information:
Detailed Pro Forma (must correspond to line items for Uses of Funds on previous page)
Land Acquisition $_________________
Demolition $_________________
Site Clearance and Preparation
Infrastructure $_________________
Utilities/removal $_________________
Utilities/relocation $_________________
Utilities/installation $_________________
Hazardous Materials Removal $_________________
Other(___________________) $_________________
Total Site Clearance and Preparation
Soft Costs/Fees
Project Management (_________%) $_________________
General Contractor (_________%) $_________________
Architect/Engineer (________%) $_________________
Developer Fee (_______%) $_________________
Appraisal $_________________
Soil Testing $_________________
Market Study $_________________
Legal/Accounting $_________________
Insurance $_________________
Title/Recording/Transfer $_________________
Building Permit $_________________
Mortgage Fees $_________________
Construction Interest $_________________
Commissions $_________________
Marketing $_________________
Real Estate Taxes $_________________
Other Taxes $_________________
Other (____________________) $_________________
Other (____________________) $_________________
Sub-total Soft Costs/Fees $_________________
Soft Cost Contingency $_________________
12 Appendix A - Page 33
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. The 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 Income
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 10th 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 / 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.
City
of
Oshkosh
Tax Incremental Financing
Policy and Application
Supplemental Information:
13 Appendix A - Page 34
Revenue Projections – Rental Project
Year 1 Year 2 >>Year 11
Income rent per sf (or avg.) $________ $______ $_________
Commercial Rent $________ $______ $_________
Commercial Expense Recoveries $________ $______ $_________
Residential Rent $________ $______ $_________
Other Revenue (_________________) $________ $______ $_________
Gross Potential Income $________ $______ $_________
Commercial Vacancy ______% $________ $______ $_________
Residential Vacancy ______% $________ $______ $_________
Effective Gross Income (EGI) $________ $______ $_________
Expenses
Maintenance & Repairs $________ $______ $_________
Real Estate Taxes $________ $______ $_________
Insurance $________ $______ $_________
Management Fee $________ $______ $_________
Professional Fees $________ $______ $_________
Other Expense (_________________) $________ $______ $_________
Other Expense (_________________) $________ $______ $_________
Total Expenses $________ $______ $_________
Net Operating Income (NOI) $________ $______ $_________
Capital Expenses (reserves, tenant improvements, commissions) $________ $______ $_________
Debt Service $________ $______ $_________
Net Cash Flow (before depreciation) $________ $______ $_________
Reversion in Year 10
Year 11 NOI before Debt & Capital Expenses $________
Capitalization Rate ________%
Gross Reversion $________
City
of
Oshkosh
Tax Incremental Financing
Policy and Application
Supplemental Information:
14 Appendix A - Page 35
Revenue Projects – For-Sale Project
Gross Sales Revenue
Housing Units Unit Type* Number Price/Unit
__________ _______ $____________ $____________
__________ _______ $____________ $____________
__________ _______ $____________ $____________
__________ _______ $____________ $____________
__________ _______ $____________ $____________
__________ _______ $____________ $____________
__________ _______ $____________ $____________
Total Housing Sales: $____________
*affordable units if any
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 $__________
City
of
Oshkosh
Tax Incremental Financing
Policy and Application
Supplemental Information:
15 Appendix A - Page 36
Summary Letter
Provide a summary of the project in the form of a letter addressed to the City Manager. The letter should not
exceed two (2) pages in length and should include only the following essential information about the project:
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t%FTDSJQUJPOPGFOEVTFSTt4VNNBSZPGJODSFNFOUQSPKFDUJPOT
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including job creation. “but for” provision will be met.
Note: In the “but for” discussion you must clearly describe why TIF is needed to help this project and
why the project will not/cannot proceed without such support. Failure to clearly provide the
“but for” explanation will delay action on your application.
Project Narrative
Provide an in-depth overview of the project in narrative format. The narrative must include a description of
the following aspects of the project:
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any existing structures, environmental conditions, and past uses of the site.
t1SPQPTFEVTF T
PGQSPKFDU FHJOEVTUSJBM
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SFUBJM
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SFTJEFOUJBMGPSTBMFPS
for rental, senior housing, etc.)
t$POTUSVDUJPOJOGPSNBUJPOBCPVUUIFQSPKFDUJODMVEJOHTJ[FPGBOZFYJTUJOHTUSVDUVSFUPCF
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.
t*GJOBOFYJTUJOH5*%PSSFEFWFMPQNFOUBSFB
DPOĕSNUIBUUIJTQSPKFDUJTDPOTJTUFOUXJUIUIFHPBMTBOE
objectives in the Project or Redevelopment Plan.
t"TVNNBSZPGUIFQSPQPTFEiHSFFOwGFBUVSFTUPCFJODMVEFEJOUIFQSPKFDU"MMQSPKFDUTUIBUSFDFJWF
TIF assistance are encouraged to include environmentally friendly features.
City
of
Oshkosh
Tax Incremental Financing
Policy and Application
Attachments:
16 Appendix A - Page 37
Filing Requirements
You must provide all of the following items with your signed application:
1.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 maps 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
t The City charges an administrative fee of 5% of the annual tax increment revenue.
tIf 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.
6.The undersigned also agrees to provide any additional information as may be requested by the City
after filing of this application.
Applicant Name______________________________________________Date_____________________
City
of
Oshkosh
Tax Incremental Financing
Policy and Application
Filing Requirements, Notes, Certification and Agreement:
17 Appendix A - Page 38
H. P. SCHMIDT MILL INVESTMENT ANALYSIS | 1
H. P. SCHMIDT MILL BUILDING
MARKET STUDY and
INVESTMENT ANALYSIS REPORT
APRIL 10, 2017
Prepared Exclusively For:
50 West 6th Street, LLC
Prepared By:
Timothy M Hess, PhD Invista Analytics, LLC
member of
Appendix B - Page 39
2 | INVISTA-ANALYTICS.COM
CONTENTS:
Introduction / Objective .........................................................................1Market Study .........................................................................................2Project Valuation ................................................................................3Overall Investment Analysis .................................................................4Potential Income ..............................................................................4Budget and Funding .......................................................................4TIF Funding ......................................................................................5Operational Proforma ....................................................................7Return On Investment ...................................................................10
Appendix B - Page 40
H. P. SCHMIDT MILL INVESTMENT ANALYSIS | 1
INTRODUCTION / OBJECTIVE
Invista Analytics, LLC (IA) has been engaged to provide a market study of commercial rental
rates of properties in Oshkosh, and specifically what an investment property in the third ward,
is likely to command. This information, along with the current proposed lease rates were uti-
lized to create an operational proforma and investment analysis for the development of the H.
P. Schmidt Mill building located at 50 West 6th Avenue in Oshkosh, Wisconsin.
The original mill portion of the building contains 3 stories and a basement. In 1984, develop-
ers converted the entire building into The Granary restaurant. However, this renovation only
refurbished the first and second floors of the original mill structure. The third floor substantially
remains as it was left in 1984, with only scuttle-hole access. The proposed development plan calls for substantially renovating the first and second floors to provide approximately 5,459
square-feet of office space. The non-original addition to the main mill structure will be renovat-
ed into a 4,059 square foot brewpub and restaurant.
The plan calls for the construction of a new parking lot on the south-west lot on the corner of W
6th Ave and Nebraska St. to service both tenants, in addition to milling with overlay and curb
a portion of 5th avenue to facilitate additional on-street parking. A future build-out of the third
floor of the office space is estimated to occur in year 5 of the plan.
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.
Figure 1 - Front elevation and overhead view of site
Appendix B - Page 41
2 | INVISTA-ANALYTICS.COM
Source of Information
In many instances in this report IA was required to seek outside sources of information includ-ing assessment data from the City of Oshkosh, construction cost estimates from the general
contractor, 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 informa-
tion 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 recom-mended 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.
ABBREVIATED MARKET STUDY
To assess the potential market rents within the downtown / south-shore area, IA conducted
a comprehensive web search of available commercial space for lease within one mile of our
subject property location. Websites included typical real estate agencies including realtor.com,
firstweber.com, coldwellhomes.com, and oshkoshrealty.com. In addition, individual developer and property management sites were also searched including blackteak.com, alexanderbish-
op.com, alliancedevelopment.biz, and schwabproperties.com. Properties were considered
as potential comparisons if they were constructed of either stone, brick or masonry and had
between 1,500 and 10,000 square feet of space available for lease. This search resulted in six
potential comparable properties, which are displayed on the map below.
For each property we recorded the modified gross asking rent along with the salient features
that distinguish each of the properties. The results are in the table below.
Available Commercial Space
Rate / SFSq Ft Source ParkingUtilitiesFurnished
1 - 146 Algoma - Suite C$9.002187www.blackteak.comNoneNot IncludedNo
2 - 240 Algoma Blvd$9.00500 - 2500www.blackteak.com5 - 25Not IncludedNo
3 - 16 Washinton Ave$9.605000 MLS # 50154082 30 stallsNot IncludedNo
4 - 217 N Main St$12.005825 MLS # 50092395 addIncludedNo
5 - 601 Oregon St¹$13.687000 MLS # 50141734 8Not IncludedYes
6 - 683 N Main $6.801500 MLS # 50148375 SharedNot IncludedNo
1. Orliginal listing offered as NNN lease. To adjust, estimated taxes was incorporated into a per square foot rate.
Figure 2 - Comparable Commercial Properties for Lease
Appendix B - Page 42
H. P. SCHMIDT MILL INVESTMENT ANALYSIS | 3
Modified Income Approach Calculation for Assessment ValuationYear 1 Year 2 Year 6 Year 11AmountPercentAmountPercentAmountPercentAmountPercent
EGI 129,492 129,492 170,935 176,611
Expense 25,554 19.73%21,529 16.63%50,077 29.30%61,230 34.67%
Taxes 8,364 4,047 30,539 39,901
Adjusted NOI 112,302 86.73%112,010 86.50%151,397 88.57%155,281 87.92%
Loaded CAP RATE 10.50%10.50%10.50%10.50%
Valuation 1,069,500 1,066,800 1,441,900 1,478,900
Valuation from Taxes 310,000 150,000 1,131,907 1,478,900
The developer is proposing to lease 5,459 square feet of office space at a modified gross net
rate of $14.07 per square foot. The brewpub has a potential tenant willing to lease the space
at $13.30 per square foot per annum. Both of these lease rates appear to be higher than the typical lease rate of the comps listed on the previous page. Thus we are comfortable with the
claim that the potential TIF financing is not simply being used to lower the lease rates for the
tenants.
PROJECT VALUATION
The City of Oshkosh TIF policy states that at most 90% of the increment created within the TIF
district can be made available to assist any deserving development when the pay-as-you-go
funding mechanism is used. In order to calculate the potential assistance, we must estimate the value of the property both at the time of the TIF district creation, as well as the value of the
completed project. The difference between these two valuations is then the increment created.
Base Valuation
While not an arms-length sale, the developer purchased the property from the U.S. Small
Business Administration for $50,000 in May of 2015. Prior to this, the US-SBA conducted an
auction of the building in January of 2015. Records show the auction lasted for one week with
a starting bid of $100,000. No bids were placed on the property at this time. Records from the
auction showed that the property was in need of extensive mold remediation. This was likely the reason for the lack of bids on the property at auction. While a portion of the remediation
was taken care of by the developer after purchase, there is still extensive remediation work to
be done.
In addition to the remediation, the building needs extensive work before one could even obtain occupancy. Both roofs have extensive damage and allow water in. The HVAC units have all
been sitting unused for the past 10 years and are now completely unservicable. Most every
window is cracked or broken. Even with the partial remediation that was completed on the
building, we estimate it’s present value to be $110,000.
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 NOI via the formula
NOI = EGI - (EXPENSE - TAXES).
Then the adjusted NOI is divided by a loaded cap rate. Following the assessor’s lead from
prior analyses, we employed a loaded cap rate of 10.5%. Data for the effective gross income
(EGI) and other values can be found on the Profit and Loss Proforma with TIF on page 12. Us-ing this approach results in a completed project valuation of $1,069,500.
Appendix B - Page 43
4 | INVISTA-ANALYTICS.COM
It is anticipated that work will begin mid-way through year 5 to finish off the 3rd floor of the mill
building to provide yet another floor of office floor space for the tenant. Using the same income
approach we estimate the value of the entire project to be $1,441,900 upon completion of this
work.
OVERALL INVESTMENT ANALYSIS
Potential Income
We first document the expected maximum revenue given the proposed rates each of the pro-
spective tenants have tentatively agreed to. The table below summarizes the rates and poten-tial annual income upon completion of the renovations. In total the developers could anticipate
a maximum annual income of $130,800.
Budget and Funding
Next we look at the detailed budget and sources of income. The table on the following page
lists all expected expenses of the initial build-out for each space, the associated equipment for
the restaurant, and the exterior and common areas. Including a 10% contingency, we antici-pate hard costs of $1,101,751. Adding soft costs and site aquisition, the total estimated cost of
this project is $1,562,601 under the TIF scenario.
On the funding side the developers anticipate bringing roughly $393K to the project in the form
of cash investment and equity. Given our estimates of valuation and increment, 90% of the net present value of the increment over the 27 year proposed TIF time frame would be approx-
imately $369K using 5.75% discount rate if we monetize the municipal revenue obligation
note. This would then leave approximately $800K remaining that the developer would look to
finance. Initial conversations with Verve credit union have been met with favorable reactions to
the prospect of providing this long term financing.
We further estimate the cost to build-out of the third floor of office space to be $325,000. At this
point we anticipate the developer refinancing the original note and adding 80% of the $325K to
the primary note on the project. The remaining 20%, or $65K, will be from a cash investment
on the part of the developer.
Unit Type Sq FtRent/sfMonthly RentAnnual Rent
Office Space545914.07 6,400 76,800
Brew Pub 405913.30 4,500 54,000
Total $130,800
7959117582.287
Maximum Rental Income Potential
Appendix B - Page 44
H. P. SCHMIDT MILL INVESTMENT ANALYSIS | 5
Amountw/ TIFw/o TIFNotes
Acquisition & Site PrepLand Acquisition 110,000110,000Lot Acquisition 7,5007,500Subtotal$117,500$117,500
Soft Costs/Fees
General Contractor 110,175110,175Architect/Engineer 55,08855,088
Developer Fee (6%)82,62182,621Appraisal4,0004,000
TIF Application 10,000TIF Consulting / Market Study 18,000Legal/Accounting 4,0004,000Insurance2,5002,500Title/Recording/Transfer 3,0003,000Building Permit 10,82110,821Mortgage Fees 2,5002,500Construction Interest 6,301 6,301Real Estate Taxes 4,3444,3444/1/2017 - 8/15/2017Soft Cost Contingency 30,00030,000Subtotal$343,350$315,350
Hard Costs
Brew Pub 265,853265,853Office Space 351,083351,083
Resteraunt Equipment 126,315126,315Exterior/Parking Lot 258,341258,341Contingency (10%)100,159100,159Subtotal$1,101,751$1,101,751
Total Project Costs $1,562,601$1,534,601Source of FundingPermanent Financing 800,112855,600TIF Monitization Note 369,106Equity by developer 393,384679,001Total Source of Funds 1,562,6011,534,601
Detailed Project Budget
TIF Funding
We assume that the project will be completed by September 2017 and that the assessor will
apply the new assessed value before the first of the year, 2018. Thus the full value of the
project will be on the 2018 tax year assessment and the increment can be paid out in the fall of 2019. We assume the assessed value will increase at a rate of 1% per year and that the base
value will be $110,000. Adding the estimated $325K cost to build out the third floor in year five
to the present budget of $1.562 million results in an overall project cost of $1.887 million. The
net present value of the 90% of the increment is $369K or 19.5% of the total estimated project
costs. This is significantly below the 25% cap in the City of Oshkosh TIF policy. (See TIF Note payoff schedule on the following page.)
Appendix B - Page 45
6 | INVISTA-ANALYTICS.COM
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Appendix B - Page 46
H. P. SCHMIDT MILL INVESTMENT ANALYSIS | 7
Operational Proforma
The operational proforma, both with and without TIF assistance can be found on the following page. The following assumptions were used to generate these:
• The brew pub will maintain a stable rent for the first 5 years then
increase by 2% every year thereafter. The first term of this lease would
be for 10 years.
• The office tenant lease will be for an initial term of 7 years. It will then increase by 10% at the beginning of each of 2 five year extension peri-
ods. For purposes of the proforma however, we assume the third floor
is built out at year 5 and that a new lease is negotiated at this point.
The third floor would add 2,500 square feet of space and the new
lease rate would be $14.74 per square foot.
• For planning purposes we assume a vacancy / credit loss of 1%.
• Expenses including Maintenance and Repairs, Insurance, Professional
Fees, and Common Area Maintenance will all increase by 2% per year.
• Capital reserves will increase by 1% per year.
• Debt service will be fixed over the first 5 years with a 20 year amorti-
zation schedule and a 4.5% interest rate offered through Verve. At the beginning of year 6, we assume $260K or 80% of the $325K project-
ed cost to complete the third floor will be added to the original note
remaining amount. This new amount will be amortized over 15 years at
5%.
The proforma with the TIF assistance starts with a modest cash flow of $10,374 the first year
and rising up to $25,861 by the end of year 10. Below the “with TIF” proforma is the he “without
TIF” proforma. In this scenario, the cash flow does turn out slightly better in the beginning but
then loses ground relative to the “with TIF” scenario ultimately ending up with a year 10 cash
flow of $17,134.
Appendix B - Page 47
8 | INVISTA-ANALYTICS.COM
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Appendix B - Page 48
H. P. SCHMIDT MILL INVESTMENT ANALYSIS | 9
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Appendix B - Page 49
10 | INVISTA-ANALYTICS.COM
Return on Investment Metrics
With TIF Without TIF
Net Cash FlowReversionTotalNet Cash FlowReversionTotalInitial Cash Outlay -393,384 -393,384-679,001 -679,001
Year 1 10,374 10,374 34,183 34,183
Year 2 14,351 14,351 38,160 38,160
Year 3 12,292 12,292 10,982 10,982
Year 4 11,951 11,951 10,745 10,745
Year 5 -53,397 -53,397-54,501 -54,501
Year 6 23,937 23,937 23,736 23,736
Year 7 23,763 23,763 15,731 15,731
Year 8 24,475 24,475 16,457 16,457
Year 9 25,161 25,161 16,790 16,790
Year 10 25,861486,952512,814 17,134680,325697,459
Yr 11 NOI 115,122 115,122
Terminal Cap Rate 7.802%7.802%
Gross Reversion Bldg1,475,500 1,475,500
Mortgage Payoff 914,773 721,400
5% Realtor Fee 73,775 73,775
Net Reversion 486,952 680,325
10yr IRR =>4.72%10yr IRR =>1.95%
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 NOI from year eleven and divide by a
terminal cap rate. We again follow the lead of the assessor and use the 10.5% loaded cap rate
and subtract off the presumed mill rate of 2.698% to arrive at a non-loaded cap rate of 7.802%.
This results in a valuation of $1.475 million in the TIF scenario. However after 10 years there
would still be $914,773 left to pay off on the mortgage. After a 5% realtor fee we estimate a net reversion of $486,952 in addition to the year 10 net cash flow. This leads to a 10 year Internal
Rate of Return of 4.72%. A similar calculation without TIF leads to an IRR of 1.95%.
The developer considers these rates of return to be substantially different. However, beyond just the rate of return is the amount of up-front cash the developer would need to put into each deal. In the ‘with TIF’ scenario the developer is putting in $393K up front, however, in the ‘with-
out TIF’ scenario the developer would need to bring in over $679K to make the project work.
Combine this with the rates of return and it is clear that this is a project that the developer
would not undertake but for the potential TIF assistance.
Appendix B - Page 50
H. P. SCHMIDT MILL INVESTMENT ANALYSIS | 11
DISCLAIMER
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 10, 2017.
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 Invista Analytics.
Finally, IA 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,
Timothy Hess, PhD
240 Algoma Blvd - Suite AOshkosh, WI 54901
920.203.2177
www.invista-analytics.com
Appendix B - Page 51
H. P. SCHMIDT MILL INVESTMENT ANALYSIS | 12Appendix B - Page 52