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29. 17-271
MAY 23, 2017 17-271 RESOLUTION (CARRIED 4-3 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVE TAX INCREMENT DISTRICT NO. 32 PROJECT PLAN; DESIGNATE TAX INCREMENT DISTRICT NO. 32 BOUNDARIES; CREATE TAX INCREMENT DISTRICT NO. 32 GRANARY 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. 32 (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; MAY 23, 2017 17-271 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 May 2, 2017 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. 32, Granary Redevelopment", are hereby established as specified in Exhibit A of this Resolution. 2. The District is created effective as of January 1, 2017. 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. MAY 23, 2017 17-271 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 #32 was within the City boundaries as of January 1, 2004. 4. The Project Plan for "City of Oshkosh Tax Increment District No. 32, Granary Redevelopment" (attached as Exhibit S) 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. 32 Granary Redevelopment. "Exhibit A" TID 32 Granary Redevelopment Legal Description ALL OF LOT 1 OF CERTIFIED SURVEY MAP NUMBER 1252 AS RECORDED IN VOLUME 1, PAGE 1252, DOCUMENT NUMBER 611506, WINNEBAGO COUNTY REGISTER OF DEEDS, ALL OF LOTS 9 AND 10 IN BLOCK 5 IN THE PLAT OF THE ORIGINAL THIRD WARD, PARTS OF W. 5TH AVENUE, W. 6TH AVENUE AND NEBRASKA STREET, ALL LOCATED IN THE FRACTIONAL SOUTHWEST 1/40F THE SOUTHWEST 1/40F SECTION 24, TOWNSHIP 18 NORTH, RANGE 16 EAST, CITY OF OSHKOSH, WINNEBAGO COUNTY, WISCONSIN, BOUNDED AND DESCRIBED AS FOLLOWS: COMMENCING FROM THE SOUTHWEST CORNER OF SECTION 24, TOWNSHIP 18 NORTH, RANGE 16 EAST; THENCE N00°3833"W, 689.77 FEET ALONG THE WEST LINE OF SAID SECTION 24 TO A POINT ON THE EXTENDED SOUTH LINE OF W. 6TH AVENUE; THENCE S89°4225"E, 433.02 FEET ALONG THE EXTENDED SOUTH LINE AND SOUTH LINE OF SAID W. 6TH AVENUE TO THE NORTHEAST CORNER OF LOT 9 OF BLOCK 5 OF THE PLAT OF THE ORIGINAL THIRD WARD AND THE POINT OF BEGINNING;THENCE N00°19'06"W, 60.00 FEET ALONG THE EXTENDED WEST LINE OF SAID LOT 9 TO A POINT ON THE NORTH LINE OF W. 6TH AVENUE; THENCE S8904225"E, 100.10 FEET ALONG SAID NORTH LINE OF W. 6TH AVENUE TO THE NORTHEAST CORNER OF W. 6TH AVENUE AND NEBRASKA STREET; THENCE N00019'05"W, 150.87 FEET ALONG THE WEST LINE OF SAID NEBRASKA STREET TO A POINT ON THE SOUTH LINE OF VACATED NEBRASKA STREET; THENCE N89040'56"E, 22.00 FEET ALONG THE NORTH LINE OF SAID NEBRASKA STREET; THENCE S8903829"E, 16.00 FEET TO THE NORTHEAST CORNER OF SAID NEBRASKA STREET AND W. 5TH AVENUE; THENCE S7305345"E, 150.29 FEET ALONG THE NORTH LINE OF SAID W. 5TH AVENUE TO A POINT ON THE EXTENDED WEST LINE OF LOT 1 OF CERTIFIED SURVEY MAP NUMBER 1252; THENCE S00001'38"W, 170.13 FEET ALONG THE EXTENDED WEST LINE AND WEST LINE OF SAID LOT 1 TO A POINT ON THE SOUTH LINE OF W. 6TH AVENUE; THENCE N8904225"W, 121.14 FEET ALONG THE SOUTH LINE OF SAID W. 6TH AVENUE TO THE SOUTH EAST CORNER OF W. 6TH AVENUE AND NEBRASKA STREET; THENCE S00019'05"E, 90.00 FEET ALONG THE EAST LINE OF SAID NEBRASKA STREET TO A POINT ON THE EXTENDED SOUTH LINE OF LOT 10 OF BLOCK 5 OF THE PLAT OF THE ORIGINAL THIRD WARD; THENCE N8904225"W, 160.00 FEET ALONG THE SAID EXTENDED SOUTH LINE AND SOUTH LINES OF LOTS 10 AND 9 OF BLOCK 5 OF SAID PLAT OF THE ORIGINAL THIRD WARD TO THE SOUTHWEST CORNER OF SAID LOT 9; THENCE N00019'05"W, 90.00 FEET ALONG THE WEST LINE OF SAID LOT 9 TO THE POINT OF BEGINNING. SAID AREA CONTAINS 55,825 SQUARE FEET OR 1.282 ACRES, MORE OR LESS. Tax Increment District #321, Granary Redevelopment Cltl©f Parcel Identification Oshkosh Tax Increment#32 - Granary Building Redevelopment- Parcel Identification Land I Improv. I Total Equalize Dwelling Census Map ID Parcel P Owner Local Address Value Value Value d Value I Class Description units Tract ILon,ng 1 03-0010-0000 5D WEST6TH STREET LLC 150 W 6TH AVENUE 1 $31,700 $274,400 $306,100 $306,U001 6 JGRANARY 1 1 1RMII-PD 2 D3-OD19-OD00 CIFY OF OSHKOSH REDEVELOPMENT AUTHORITY 10 W 6TH AVENUE I Sol Sol Sol sor 4 IVACANT I D I12 UMU Lu Z W 7TH AVE Legend TID 932 Boundary 0 5 50 100 FW w e Feet April, 2017 Project Ran TID No. 32 0;Iraatlion Gity of Oshkosh Prepared by Ehllalrs Page 9 Aplrlill 20, 2017 TO: Honorable Mayor and Members of the Common Council FROM: Darryn Burich Director of Planning Services DATE: May 18, 2017 RE: Approve Tax Increment District No. 32 Project Plan; Designate Tax Increment District No. 32 Boundaries; Create Tax Increment District No. 32 Granary Redevelopment (Plan Commission recommends approval) BACKGROUND Tax Incremental District No. 32 (the "TID" or "District") is a proposed 0.45 acre district in need of rehabilitation or conservation located in the former "The Granary" restaurant building at 50 W. 61h Avenue. Creation of the District is intended to facilitate rehabilitation of the historic locally Landmarked H.P. Schmidt Mill building, which also includes an adjacent non -original building addition to the east for total building area of about 9,500 square feet. TIF in this case would be used to rehabilitate the structure into a combination of offices for one user in the original building and a brew pub and restaurant in the addition. The building has sat vacant for a number of years and reflects some deferred maintenance creating a blighting influence in the area. The City anticipates making total Project Cost expenditures of approximately $710,000 to facilitate rehabilitation within the District. This total is comprised of $661,806 in potential "pay as you go" development incentives for a total project cost of approximately $1.6 million dollars which includes $110,000 for acquisition of the property. Hard construction costs are estimated at approximately $1.1 million. The District also includes a vacant property to the southwest that will be turned into a parking lot. The project also will include rehabilitation of the existing parking lot to the east of and adjacent to 40 W. 6th Avenue as well as improvements to the "alley" to the north of the building which is W. 5th Avenue where additional public parking will be provided. 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. Using the City's TIF Application Scoring criteria (attached) this project scored 81 out of 100 points scoring maximum points for blight elimination, historic preservation, and enhancing the pedestrian experience through creation of outdoor seating and landscaping along 6f Avenue which will eventually connect to the riverwalk. The project also is scoring for environmental sustainability for proposed use of solar panels for energy production. ANAT VC,Tq 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 of the building and development of the parking lot. 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 new development and redevelopment and associated values is located in Section 10 of the Project Plan. Based on the Economic Feasibility Study located in Section 10 of the Project Plan, this T I F District would be expected to remain open for 22 of the maximum 27 statutory years. 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 incentivize developers to make the necessary private investment. In this case the cash flow analysis (Appendix B of the Project Plan) shows a 10 year IRR (Internal Rate of Return) without TIF of 1.95% and a 4.72% IRR with TIF. The "with TIF" IRR is below standard development expectations and is generally consistent with IRR's of other recent TIF redevelopment projects such as the Beach Building (TID No. 28), Morgan District (TID No. 29) and Washington Building (TID No. 30). 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 Development Overlay zoning district to implement the Plan other than review and approval of a General Development Plan and Specific Implementation Plan that was reviewed at the May 16, 2017 Plan Commission meeting. 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 State Building Codes and will be subject to the City's permitting and inspection procedures. It should be noted that as a locally designated Landmarked structure, the developers will be able to utilize the Historic Building Code for rehabilitation. 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 other than some base standard modifications identified in the GDP. City Hall • 215 Church Avenue • P.O. Box 1130 • Oshkosh, WI 54903-1130 http://www.ci.oshkosh.wi.US FISCAL IMPACT Creation of the TID itself will have very little fiscal impact on city services other than routine annual TIF administration that will be paid for from TIF increment. Creating the TID will actually help to mitigate some of the public improvement costs in the area because the developer will be paying for the public improvements to 5th Avenue and some of sidewalks/trail upgrades along the property. The tables on pages 22-24 identify the development assumptions and cash flow for the project. Appendix B includes the Market Study and Investment Analysis Report identifying the operational proforma, with and without TID, and the Return on Investment Metrics. At present estimate, the District is anticipated to generate about $1.6 million in revenues to pay approximately $662,000 towards the private development costs of approximately $1.5 million. The project is estimated to be initially valued at $1,144,500 with another approximately $311,474 added in 2021 when the third floor office space is added. RECOMMENDATION The Plan Commission recommended approval of Tax Increment District #32 Project Plan and the designation of the boundaries at its May 2, 2017 meeting. Respectfully Submitted, i"" /YX-' Darryn Burich Director of Planning Services Approved: Mark A. Rohloff City Manager City Hall • 215 Church Avenue • P.O. Box 1130 • Oshkosh, WI 54903-1130 http://www.ci.oshkosh.wi.us Tax Incremental Financing Criteria Score Sheet Redevelopment/Blight Elimination TID #-32 Granary Rehabilitation Criteria Maximum Points Score 1. Presence of extraordinary development/redevelopment costs 20 such as: a. Remodeling/Rehabilitation/Demolition b. Environmental Remediation 25 c. Capital purchases d. Facility expansion e. Public Infrastructure 2. Project provides direct benefit to distressed areas through 25 blight elimination or redevelopment. 25 3. Projects that directly implement specific recommendations of 8 the City's strategic planning documents such as the Comprehensive Plan, Downtown Action Plan, Riverwalk Plan, 10 Vision Report, etc. 4. Historic Preservation or rehabilitation of a nationally or 15 locally significant historic structure. 15 5. Quality of development and overall aesthetics (architectural, 3 site design, landscaping, etc) beyond that which is minimally 5 required by the Zoning Ordinance. 6. Environmental sustainability impacts such as higher 3 standards of building and site design, materials and energy , efficiency. a. LEED certification, Energy Star, etc 5 b. Use of Green Infrastructure c. Solar and Wind energy production 7. Enhance the streetscape and pedestrian experience. 5 5 8. Proposed employment potential. 5 2 9. Projects that involve development that is targeted to encourage an inflow of customers from outside the city or 5 that provides services or fill underserved markets in the City. Point Total must be greater than 50 points or Council waiver is 81 required 100 N L !� 1in=0.02 mi �_..� 1 in = 80 ft The City of Oshkosh creates and maintains GIS maps and data for its own use. They may show the approximate relative location of property, boundaries and other feature from a variety of sources. Printing Date: 4/19/2017 These map(s)/datasets are provided for information purposes only and may not be sufficient or appropriate for legal, engineering, or surveying purposes. They are provided "AS -IS" without Prepared by: City of Oshkosh, WI warranties of any kind and the City of Oshkosh assumes no liability for use or misuse. \GIS\Planninq\Plan Commission Site Plan Mao Temolate\Plan Commissinn Site Plan Man Tamniata mzd User. katieb 6 EXHIBIT B April 24, 2017 Project Plan for the Creation of Tax Incremental District No. 32 (Granary Rehabilitation) Organizational Joint Review Board Meeting Public Hearing: Approval by Plan Commission: Adoption by Common Council: Approval by the Joint Review Board: May 2, 2017 May 2, 2017 May 2, 2017 Scheduled for May 23, 2017 Scheduled for May 30, 2017 EHLERS LEADER'S IN PUBLIC FINANCE Tax Incremental District No. 32 Creation Project Plan City of Oshkosh Officials Common Council Steve Cummings Steve Herman Debra L. Allison-Aasby Lori Palmeri Caroline Panske Thomas R. Pech, Jr. Jake Krause City Staff Mark Rohloff Allen Davis Lynn Lorenson Darryn Burich Kelly Nieforth Trena Larson Pamela Ubrig Plan Commission David Borsuk Edward Bowen Thomas Fojtik, Chair John Hinz John Kiefer Joint Review Board Mark Rohloff, City Manager Mark Harris, County Executive Melissa Kohn, Director — Oshkosh Campus Allison Garner, School Board President Bill Castle Mayor Deputy Mayor Council Member Council Member Council Member Council Member Council Member City Manager Community Development Director City Attorney Planning Director Economic Development Services Manager Finance Director City Clerk Karl Nollenberger Kathleen Propp Jeffrey Thorns Robert Vajgrt Mayor Steve Cummings City Representative Winnebago County Fox Valley Technical College District Oshkosh School District Public Member 1 ------------------------ ,",,,,,", ,,,,",,, r , r�; 1� 1 1 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 LI_l=4M16IUU101BMW 00]l6],y=119llLI=10I /WYAI=110I16y_1011921&yam 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 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......................................................28 CALCULATION OF THE SHARE OF PROJECTED TAX INCREMENTS ESTIMATED TO BE PAID BY THE OWNERS OF PROPERTY IN THE OVERLYING TAXING JURISDICTIONS......................................29 APPENDIX A - TAX INCREMENT FINANCING APPLICATION................................................................ 30 APPENDIX B - MARKET STUDY AND INVESTMENT ANALYSIS REPORT (INVESTA-ANALYTICS).... 42 PLAN COMMISSION PUBLIC HEARING/MINUTES OF MAY 2, 2017 .......................................................56 COMMON COUNCIL CREATION RESOLUTION OF MAY 23, 2017..........................................................58 JOINT REVIEW BOARD RESOLUTION OF MAY 30, 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 6"' 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 6"' Avenue and Nebraska Street and milling with overlay and curb on a portion of 5"' 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. Piroject Ran TID No. 32 Cireatlion Gity of Oshkosh Pirepaired by Ehlleirs Wage 4 ApIr l 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: 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 91) and since the District will generate economic benefits that are more than sufficient to compensate for the cost of the improvements (see Finding 92), the City Piroject Rlwi TID No. 32 Cireatliorl Gity of Oshkosh Pirepaired by Ehlleirs Fags 5 ApIr l 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. 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. Pirojact Rlwi TID No. 32 Ciraatiorl Gity of Oshkosh Pirapaired by Ehllairs Page 6 ApIr l 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 6"' 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. Pirojact Rlwi TID No. 32 Ciraatliorl Gity of Oshkosh Pirapaired by Ehllairs Page 7 Apirlill 20, 2017 SECTION 3: Preliminary Maps of Proposed District Boundary Project Ran TID No. 32 Cireahon Gity of Oshkosh Prepared by EMeirs Page 3 Apilll 20, 2017 Tax Increment District #321, Granary Redevelopment Cltl©f Parcel Identification Oshkosh Tax Increment#32 - Granary Building Redevelopment- Parcel Identification Land I Improv. I Total Equalize Dwelling Census Map ID Parcel P Owner Local Address Value Value Value d Value I Class Description units Tract ILon,ng 1 03-0010-0000 5D WEST6TH STREET LLC 150 W 6TH AVENUE 1 $31,700 $274,400 $306,100 $306,U001 6 JGRANARY 1 1 1RMII-PD 2 D3-OD19-OD00 CIFY OF OSHKOSH REDEVELOPMENT AUTHORITY 10 W 6TH AVENUE I Sol Sol Sol sor 4 IVACANT I D I12 UMU Lu Z W 7TH AVE Legend TID 932 Boundary 0 5 50 100 FW w e Feet April, 2017 Project Ran TID No. 32 0;Iraatlion Gity of Oshkosh Prepared by Ehllalrs Page 9 Aplrlill 20, 2017 I Tax Increment District #32 041 Granary Redevelopment C11yr Existing Conditions Oshkosh Project Ran TID No. 32 Cireahon Gity of Oshkosh Prepared by EMeirs Page 11 Apilll 20, 2017 SECTION 5 - Preliminary Parcel List and Analysis NOTES: 'Property and assessment information per City of Oshkosh Parcel Viewer on 4-12-2017. Equalization ratio as of January 1, 2016 as published by the Wisconsin Department of Revenue. 'Properties 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 fora program of voluntary or compulsory repair and rehabilitation of buildings or other improvements." Project Ran TID No. 32 Ciraatlian Gity of Oshkosh Prepared by Ehllairs Page 12 Apirlill 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 Date 7/1/2017 Valuation Data Percent Valuation Data Currently Available Change Est. Creation Date 2016 Tota l EV (TI D In) //� ��� 1115, I 12% Test 453,147,036 453,147,036 Total Existing Increment 264,138,900 0 Projected Base of New District 110,000 Total Value Subject to 12% Test 264,248,900 110,000 Compliance Piroject Rlwi TID No. 32 Cireatliorl Gity of Oshkosh Pirepaired by Ehlleirs Fags 13 Apirlill 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 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; Piroject Rlan TID No. 32 Cireation Gity of Oshkosh Pirepaired by Ehlleirs Wage 14 Apirlill 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 Statute Sections 66.1105(2)(f)lh 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)l.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- Piroject Rlan TID No. 32 Cireatlion Gity of Oshkosh Pirepaired by Ehlleirs Wage 15 Apirlill 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. Piroject Rlan TID No. 32 0;ireation Gity of Oshkosh Pirepaired by Ehlleirs Wage 16 Apirlill 20, 2017 SECTION 8: Map Showing Proposed Improvements and Uses Tax Increment District #32 0A% Granary Redevelopment CHYF, ."A Proposed Improvements Oshkosh u Project Ran TID No. 32 Cireahon Gity of Oshkosh Prepared by EKleirs Page 17 Apilll 20, 2017 } C 4 00- _ U) C Qr O u 0 p m x U CV wl 77 CL oCL ITL ±' ® ❑ szc a w a z 1S NlvvV S NEBRASKA ST 7Yg 1S NOJ3?JO 44G' Project 'Ilan TID Na. 32 Ciraatlian Gity of Oshkosh Prepared by Ehllairs Page 18 Apirlill 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 Piroject Rlwi TID No. 32 Cireatliorl Gity of Oshkosh Pirepaired by Ehlleirs Fags 19 Apirlill 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. Piroject Rlan TID No. 32 Cireatlion Gity of Oshkosh Pirepaired by Ehlleirs Wage 20 Apirlill 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 its 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. Piroject Rlan TID No. 32 Cireatlion Gity of Oshkosh Pirepaired by Ehlleirs Wage 21 Apirlill 20, 2017 Development Assumptions Construction Brew Pub & 1 1 Third Floor Additional Personal Construction Year Office Space2 Buildout Lot Property Annual Total Year 1 2017 929,500 30,000 75,000 1,034,500 2017 1 2 2018 (:L.`ik„CbCbCbj (:L.`ik„CbCbCbj 2018 2 3 2019 (:L.`ik„CbCbCbj (:L.`ik„CbCbCbj 2019 3 4 2020 (:L.`ik„CbCbCbj (:L.`ik„CbCbCbj 2020 4 5 2021 326,474 311,474 2021 5 6 2022 (:L.`ik„CbCbCbj (:L.`ik„CbCbCbj 2022 6 7 2023 0 2023 7 8 2024 0 2024 8 9 2025 0 2025 9 10 2026 0 2026 10 11 2027 0 2027 11 12 2028 0 2028 12 13 2029 0 2029 13 14 2030 0 2030 14 15 2031 0 2031 15 16 2032 0 2032 16 17 2033 0 2033 17 18 2034 0 2034 18 19 2035 0 2035 19 20 2036 0 2036 20 Totals / 929,500 326,474 30,000 0 1,285,974 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 1 ess estimated $110,000 TID base value. Project Ran TID No. 32 Ciraatlian Gity of Oshkosh Prepared by Ehllalrs Page 22 Aplrlill 20, 2017 Increment Revenue Projections Type of District District Creation Date Valuation Date Max Life (Years) Expenditure Period/Termination Revenue Periods/Final Year Extension Eligibility/Years Recipient District Construction Year Value Added Base Value Appreciation Factor Base Tax Rate Rate Adjustment Factor Tax Exempt Discount Rate Taxable Discount Rate Inflation Total Valuation Year Increment Increment Revenue Year Tax Rate' Tax Increment Tax Exempt NPV Taxable NPV Calculation Calculation 2017 1,034,500 2018 1,034,500 2019 $26.98 27,101 26,712 2018 -15,000 2019 11,445 1,030,945 2020 $26.98 53,322 52,186 2019 -15,000 2020 11,409 1,027,354 2021 $26.98 78,691 76,478 2020 -15,000 2021 11,374 1,023,728 2022 $26.98 103,234 99,642 2021 311,474 2022 11,337 1,346,539 2023 $26.98 134,576 128,798 2022 -15,000 2023 14,565 1,346,105 2024 $26.98 164,995 156,690 2023 0 2024 14,561 1,360,666 2025 $26.98 194,848 183,669 2024 0 2025 14,707 1,375,372 2026 $26.98 224,144 209,765 2025 0 2026 14,854 1,390,226 2027 $26.98 252,895 235,008 2026 0 2027 15,002 1,405,228 2028 $26.98 281,109 259,424 2027 0 2028 15,152 1,420,381 2029 $26.98 308,796 283,040 2028 0 2029 15,304 1,435,684 2030 $26.98 335,967 305,883 2029 0 2030 15,457 1,451,141 2031 $26.98 362,631 327,978 2030 0 2031 15,611 1,466,753 2032 $26.98 388,796 349,349 2031 0 2032 15,768 1,482,520 2033 $26.98 414,473 370,019 2032 0 2033 15,925 1,498,445 2034 $26.98 439,669 390,012 2033 0 2034 16,084 11514,530 2035 $26.98 464,394 409,349 2034 0 2035 16,245 1,530,775 2036 $26.98 1 488,657 428,052 2035 0 2036 16,408 1,547,183 2037 $26.98 512,465 446,142 2036 0 2037 16,572 1,563,755 2038 $26.98 535,827 463,638 2037 0 2038 16,738 11580,492 2039 $26.98 558,752 480,559 2038 0 2039 16,905 1,597,397 2040 $26.98 581,247 496,925 2039 0 2040 17,074 1,614,471 2041 $26.98 603,320 512,754 2040 0 2041 17,245 1,631,716 2042 $26.98 1 624,979 528,063 2041 0 2042 17,417 1,649,133 2043 $26.98 1 646,232 542,869 2042 0 2043 17,591 1,666,724 2044 $26.98 667,086 557,189 22004433������������ 0 2044 17,767 1,684,492 2045 $26.98 687,548 571,038 Notes: 'Tax rate shown is actual TID Interim Rate for the 2016/17 levy per DOR Form PC -202 (Tax Increment Collection Worksheet). Project Ran TID No. 32 0;iraatlian Gity of Oshkosh Prepared by Ehllairs Page 23 Apirlill 20, 2017 Cash Flow Project Ran TID No. 32 Cireatlon Gity of Oshkosh Prepared by Ehlleirs Fuge 24 Apirlill 17, 2017 . . Interest Pay As You Go(PAYGO) Year Earnings/ Developer Obligation' Tax (Cnnr :) Total Dev. Incentive Present Value Total Principal Increments 1.00% Revenues Payments 5.75% Admin. Expenditures Annual Cumulative Outstanding Year 2017 0 0 10,000 10,000 (to,000) (to,000) 2017 2018 (too) Q7ooD 0 1,500 1,500 (]., P'�ClC!) (t,(�QG) 2018 2019 27,914 (]. ].P') 27,798 25,123 23,757 1,500 26,623 1,175 (to,4,.5) 2019 2020 27,818 (7.074) 27,714 25,036 46,144 1,500 26,536 1,178 (9, 14 7) 2020 2021 27,721 (9'1) 27,629 24,949 67,241 1,500 26,449 1,180 (8,()67) 2021 2022 27,623 (87.) 27,543 24,861 87,120 1,500 26,361 1,182 (6,886) 2022 2023 36,334 (6 9) 36,265 32,700 111,846 1,500 34,200 2,065 (4,827.) 2023 2024 36,322 (48) 36,274 32,690 135,220 1,500 34,190 2,084 (T, 7S; 7) 2024 2025 36,715 (T7) 36,688 33,044 157,562 1,500 34,544 2,144 (Sr3S;) 2025 2026 37,112 (6) 37,106 33,401 178,918 1,500 34,901 2,205 1,612 2026 2027 37,513 16 37,529 33,761 199,330 1,500 35,261 2,267 3,880 2027 2028 37,917 39 37,956 34,126 218,841 1,500 35,626 2,331 6,210 2028 2029 38,326 62 38,388 34,494 237,490 1,500 35,994 2,395 8,605 2029 2030 38,739 86 38,825 34,865 255,315 1,500 36,365 2,460 11,065 2030 2031 39,156 111 39,267 35,241 272,352 1,500 36,741 2,526 13,591 2031 2032 39,578 136 39,713 35,620 288,636 1,500 37,120 2,594 16,185 2032 2033 40,003 162 40,165 36,003 304,201 1,500 37,503 2,662 18,847 2033 2034 40,433 188 40,621 36,389 319,077 1,500 37,889 2,732 21,579 2034 2035 40,867 216 41,083 36,780 333,295 1,500 38,280 2,802 24,381 2035 2036 41,305 244 41,549 37,175 346,885 1,500 38,675 2,874 27,255 2036 2037 41,748 273 42,020 37,573 359,873 1,500 39,073 2,947 30,203 2037 2038 42,195 302 42,497 37,975 372,286 7,500 45,475 j „p,w8) 2,7,224„ 2038 2039 42,647 272 42,919 0 42,919 70,1432039 2040 43,103 701 43,804 0 43,804 113,947 2040 2041 43,563 1,139 44,703 0 44,703 158,650 2041 2042 44,029 1,587 45,615 0 45,615 204,266 2042 2043 44,499 2,043 46,541 0 46,541 250,807 2043 2044 44,973 2,508 47,481 0 47,481 298,289 2044 2045 45,453 2,983 48,436 0 48,436 346,724 2045 Total 1,043,606 12,424 1,056,030 1 661,8061 1 47,500 1 709,306 Total Notes: Percentage, term and interest rate shown for purposes of establishing economic feasibility only. The City u has not u_.._._._._._._._._._._ i ,� 11-1 it -0-0s .ref 111144'.1 u -Ire U to - -- II agreed to terms or conditions with the proposed developer as to any public participation in the project. Project Ran TID No. 32 Cireatlon Gity of Oshkosh Prepared by Ehlleirs Fuge 24 Apirlill 17, 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. Pirojact Rlwi TID No. 32 Ciraatliorl Gity of Oshkosh Pirapaired by Ehllairs Page 25 Apirlill 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. Piroject Rlan TID No. 32 Cireatlion Gity of Oshkosh Pirepaired by Ehlleirs Wage 26 Apirlill 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 Ran TID No. 32 Cireahon Gity of Oshkosh Prepared by EMeirs Page 27 Apilll 20, 2017 ci[ (A Oshkosh City Attorney's Office Phone: (920) 236-5115 Fax: (920)236-5106 http://wiviv.ci,oshkosh.ivi.us May 16, 2017 Darryn Burich Director of PIanning 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 #32 Granary Rehabilitation, pursuant to Section 66.1105(4)(0 of the Wisconsin Statutes. I find that the plan includes a statement listing the kind, munber, and location of proposed public improvements. It 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 identifies 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 specifies 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)(0, 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, CI OF OSHKOS nn A. Lorens City Attorney LL/tw City Attorney City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5115 hitp://www.ci.oshkosh.wi.us Page 28 Exhibit A: Calculation of the Share of Projected Tax Increments Estimated to be Paid by the Owners of Property in the Overlying Taxing Jurisdictions Project Ran TID No. 32 Ciraahon Gity of Oshkosh ubirnutted by Ehlleirs Page 29 Apirlill 20, 2017 ME Statement of Taxes Data Year:%% Percentage Winnebago County 1,���e�� 19.58% City of Oshkosh % r` 41.85% School District of Oshkosh Area 34.54% Fox Valley Technical College 4.03% School District Fox Valley Winnebago of Oshkosh Technical Revenue Year County City of Oshkosh Area College Total Revenue Year 2019 5,465 11,683 9,642 1,124 27,914 2019 2020 5,446 11,643 9,609 1,120 27,818 2020 2021 5,427 11,602 9,576 1,116 27,721 2021 2022 5,408 11,561 9,542 1,112 27,623 2022 2023 7,114 15,207 12,551 1,463 36,334 2023 2024 7,111 15,202 12,546 1,462 36,322 2024 2025 7,188 15,367 12,682 1,478 36,715 2025 2026 7,266 15,533 12,819 1,494 37,112 2026 2027 7,344 15,701 12,958 1,510 37,513 2027 2028 7,424 15,870 13,098 1,526 37,917 2028 2029 7,504 16,041 13,239 1,543 38,326 2029 2030 7,585 16,214 13,381 1,559 38,739 2030 2031 7,666 16,388 13,525 1,576 39,156 2031 2032 7,749 16,565 13,671 1,593 39,578 2032 2033 7,832 16,743 13,818 1,610 40,003 2033 2034 7,916 16,923 13,966 1,628 40,433 2034 2035 8,001 17,104 14,116 1,645 40,867 2035 2036 8,087 17,288 14,268 1,663 41,305 2036 2037 8,174 17,473 14,421 1,680 41,748 2037 2038 8,261 17,660 14,575 1,698 42,195 2038 2039 8,350 17,849 14,731 1,717 42,647 2039 2040 8,439 18,040 14,889 1,735 43,103 2040 2041 8,529 18,233 15,048 1,754 43,563 2041 2042 8,620 18,428 15,209 1,772 44,029 2042 2043 8,712 18,625 15,371 1,791 44,499 2043 2044 8,805 18,823 15,535 1,810 44,973 2044 2045 8,899 19,024 15,700 1,830 45,453 2045 204,322 436,791 360,485 42,008 1,043,606 Note: The projection shown above is provided to meet the requirements of Wisconsin Statute 66.1105(4)(i)4. Project Ran TID No. 32 Ciraahon Gity of Oshkosh ubirnutted by Ehlleirs Page 29 Apirlill 20, 2017 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: 50 W 6th St, LLC Mailing Address: 230 Ohio St- Suite 200 Primary Contact #: 920 230 3628 Cell #: 920 379 1645 E-mail: andy@alliancedevelopment.biz FAX #: Attorney: 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: Andy Dumke 230 Ohio St Suite 200 Cal Schultz 230 Ohio St Suite 200 Member / owner 25% Member / owner 25% Chet Wesenberg 240 Algoma Blvd Suite A Member / owner 25% Tim Hess 240 AlgomaBlvd Suite A Member / owner 25% Is any owner, member, stocholder, 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: Page30 50 W 6th St IM Date: 4/10/2017 RE: Summary Letter Granary TIF Application C/O: Mark Itohloff City Manages`— Oshkosh, WI 215 Church Avenue Oshkosh, Wl 54903 Dear Mr. Mark Itohloff: We humbly submit for your review a project that we believe will significantly contribute to the revitalization efforts of Oshkosh's south shore and hope that the community might view this project favorably enough to utilize Tax Incremental Financing to help make financially feasible the development of a 5,459 square foot office space and a. separate 4,059 square foot brewpub and restartrant, in addition, we propose to acquire a redevelopment authority owned lot adjacent to our building so that we carr provide additional parking to service the teriants as well as rerrrill and overlay a portion of W 5"' Ave adjacent to the building. This building has sat vacant for the past decade and will continue to fall into disrepair without the immediate action we are proposing. This locally historic renovation and updating of public space will serve to remove blight and repurpose a building that has significantly fallen out of Ilse due to substantial deferred maintenance and hope that you will support our° efforts. Nance of Developer & Owner: 50 W 6"° Street, LLC (Andy DUnike, Cal Schultz, Clict Wescriberg, and Tim Hess Co -Developers / Co -Owners) Description of Site/Building: The ff. K Schmidt Millbuilding consists of 9,200 Sq. Ft. of vacant space that was. most recently used as a night club and then a restaun•arrt before this. The building rests upon a roughly 10,500 Sq. Ft. parcel, A semi-acilacerst 4,186 Sq. Ft. lot provides parking for this building as well as a connecting office space owned by Mr Kurt Koeppler & Mrs Peggy Hirschberg. Current & Proposed Uses: The most recent use wwas as a night club and then restaurant before that, however hassat vacant the past decade. We are proposing to turn it into office space and a brewvpub and restaurant. Description of End Users: Given the local prominence of the now closed Granary restaurant, we anticipate that many locals will again be interested to try out the revived brewpub and restaurant. The proposed operators presently run one of the most successful similar type establishments in Oshkosh. The office will be occupied by a local professional firm that has seers significant growth over the past decade and is looking to expand itscurrent footprint in Oshkosh, Project Start & End Dates: Initial demolition efforts will begin ;shortly to further understand the challenges and refine the budget. We are anticipating an August I completion elate for the Office space and a September 15 completion date for the restaurant. Description of Public Benefit (.bob Creation): The professional office firru just hired 8 new full-time employees icy anticipation of all expanded office while the restaurant is expected to create the equivalent of 10 full-time jobs upon opening. Overview of Private Sector Funding and Total Development Costs: We anticipate Verve credit union to be our private financing partner for the project providing a $800,112 loan as well as monetizing the TIF municipal revenue obligations, In addition, our LLC; will contribute $393,381 worth of crush and equity participation into the prc iect. Sttrnnriiry of lrscr•enserrt Pi,ojectiorss acid TIF Assistarrec Requestccl: Over the next 26 years, we estimate the tax increment to exceed $1,600,000 with this project. We are requesting the full 90%4 of the increment, or $369,105 of net present value as a PayGo note to be paid over the course of the 25 -year payback period. Page31 The `But For' Provision: As With any preservation of a historical building, the H. P. Schmidt Mill has many significant challenges that have been exacerbated by the obvious lack of any maintenance over the past decade. Moreover, significant water penetration has occurred leading to substantial mold issues that were noted before we purchased the building. While We have taken preliminary mediation steps, a significant amount of remediation remains, especially considering we intend to re -open a portion of the building as a restaurant. While the landmark's commission has designated the property as a locally significant structure, two independent surveys commissioned for the City of Oshkosh both determined the building does not qualify for listing in the National Register of Historic Places, and tiws do not qualify for any assistance in the form of Historic Tax Credits. Therefore we are left with the challenge to bring back into service a locally significant building, which comes with the challenges one typically faces with buildings well beyond 100 years old, without any other means of covering the financial gap that exists in making this a financially feasible project. Our analysis has determined that without TIF assistance, not only would we have to bring in $679,000 of cash or equity up fi•ont, which would be more than 63% of the completed project's value, but that doing so would only result in an internal rate of return of 195°/x. With the projected TIE assistance We anticipate all internal rate of return of 4.72%. We would point out that this rate of return is extremely small relative to many project that we see. In fact, staff from the City of Madison report their typical IRR in TIF deals range from 12 to 15%. hz this case, however, we are interested in Continuing to see the inspirational revival efforts ofthis city c011611uC and would be willing to proceed with the 4.72% return in hopes that this Will continue to spur the momentinn the city has gained. 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 night be needed. Best regards, Andy Drmike Page32 Tax Incremental Financing Policy and Application Overall Project Summary and Objectives: Renovate locally historic Granary building into a single occupant office space and a separate restaurant/ brewpub. Current and Proposed Uses: The building has sat vacant for the past decade. Before this it was used as a night club for less than one year. Prior to this is was operated as The Granary Restaurant for 20 years. We propose to renovate the building into a roughly 5,549 sf office space and a 4,059 sf restaurant. Description of End Users: The office space will be occupied by a professional service organization that has successfully operated in Oshkosh for the past 16 years. Their success has lead them to seek an office space for expansion as well a future potential growth. The restaurant will be operated by a well-regarded pair with experience operating similar establishment in Oshkosh. The restaurant will be open to the public. Property Summary: Parcel/Land Area: 14,717 SF Building Area: 9518 SF # of Dwelling Units: 0 # of Stories: 2 # of Parking Spaces: 18 Describe any zoning changes that will be needed: None Identify any other approvals, permits or licenses (i.e. Liquor License, Health Department, etc): A liquor license is associated with this property and is getting transferred to the restaurant operator and a Wisconsin seller's permit. Describe briefly what the project will do for the property and neighborhood: This building has sat vacant for the past decade and is showing substantial deterioration. This project will substantially revitalize the appearance of the building removing blight. The new parking lot as well as the remilling and overlay on 5th ave will provide sufficient parking to make this building a financially viable project. Page33 Tax Incremental Financing Policy and Application , Summary: Project Timetable Date Final Plan/Specification Preparation: Now - May 1, 2017 Bidding and Contracting: May 1 - June 15 Firm Financing Approval: May 1 Construction/Rehabilitation: Deconstruction Now - May 15, 2017, Construction May 15 - Sept 15, 2017 Landscaping/Site Work: June 1 - July 15, 2017 Occupancy/Lease Up: Office Space - Aug 1, 2017 occupancy, Restaurant - Sept 15, 2017 occupancy Development Team Developer: Andy Dumke, Cal Schultz, Chet Wesenberg, Tim Hess Architect: Chet Wesenberg Surveyor: Contractor: Chet Wesenberg Other Members: Describe Team expertise and experience in developing similar projects: Collectively this team has substantial experience in development, architecture, general contracting, and investment analysis. Other current Team projects in development: Andy and Chet are working on a retail development in Green Bay presently. Financial ability of the applicant to complete the project: The development team has committed to the up -front portion needed, and has an initial verbal indication that project will be financed through Verve. Full and part-time jobs to be created by the proposed project including estimated salary: The office tenant recently hired 8 new professional employees in part because they will soon have expanded space. Then anticipate another 10-12 in the next 5 years. The restaurant expects to hire the equivalent of rofessional Studies 8 full time positions. [arket 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 >mparable 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 remediation, 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. Page34 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: $117,500 $12.74 Developer Equity: Demolition: $20,000 $2.10 Environmental Remediation: $32,000 $3.36 Site Clearance and Preparation: 0 $ Soft Costs/ Fees: $313,350 $32.92 Soft Cost Contingency: $30,000 $3.15 Hard Construction Costs: $1,101,751 $115.75 Total Project Costs: $1,562,601 (+325K at yr 5) $164.17 4.5 % 20 yrs, 51.20 TIF Assistance Sources of Funds % of total project costs Equity Developer Equity: $ 393,384 25.17 Other Equity:( ) $ % Total Equity: $ % Loans Rate Term Construction Financing: $ 800,000 4.5 % 6 mos. Permanent Financing: $ 800,112 4.5 % 20 yrs, 51.20 TIF Assistance $ 369,106 23.63 Other: ( ) $ % Total Sources of Funds $1,562,601 100% Financing Source Amount Terms: Years/Interest Contact Information Equity: $393,384 Loans 1: $800,112 20yrs / 4.5% Verve CU 2: $369,106 (TIF Note Monitization) 25yrs/ 5.75% Verve CU 3: 4: Page35 Tax Incremental Financing Policy and Application Detailed Pro Forma (must correspond to line items for Uses of Funds on previous page) Land Acquisition $ 117,500 Demolition $ $20,000 Site Clearance and Preparation Infrastructure $ Utilities/removal $ Utilities/relocation $ Utilities/installation $ Hazardous Materials Removal $ 32,000 Other( ) $ Total Site Clearance and Preparation Soft Costs/Fees Project Management ( 2 %) $ 22,035 General Contractor ( 10 %) $ 110,175 Architect/Engineer ( 3 %) $ 33,053 Developer Fee (6 %) $ 82,621 Appraisal $ 4,000 Soil Testing $ Market Study $18,000 Legal/Accounting $ 4,000 Insurance $ 2,500 Title/Recording/Transfer $ 3,000 Building Permit $10,821 Mortgage Fees $ 2,500 Construction Interest $ 6,301 Commissions $ Marketing $ Real Estate Taxes $ 4,344 Other Taxes $ Other( ) $ Other( ) $ Sub -total Soft Costs/Fees $ 313,350 Soft Cost Contingency $ 30,000 Page36 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. 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. Page37 Tax Incremental Financing Policy and Application Revenue Projections - Rental Project $ 6,095 $ 4,047 Year 1 Income rent per sf (or avg.) $ Commercial Rent $ 130,800 Commercial Expense Recoveries $_ Residential Rent $ Other Revenue ( ) $ Gross Potential Income $130,800 Commercial Vacancy 1 % $ 1,308 Residential Vacancy % $ Effective Gross Income (EGI) $129,492 Expenses Maintenance & Repairs $ 5,000 Real Estate Taxes $ 8,364 Insurance $ 2,600 Management Fee $ 2,590 Professional Fees $ 2,500 Other Expense ( CAM ) $ 4,500 Other Expense ( ) $ Total Expenses $ 25,554 Net Operating Income (NOI) $103,938 Capital Expenses (reserves, tenant improvements, commissions) $ 4,800 Debt Service $ 88,765 Net Cash Flow (before depreciation) $10,374 Reversion in Year 10 Year 11 NOI before Debt & Capital Expenses $115,122 Capitalization Rate 7802 Gross Reversion $ 1,475,500 Page38 Year 2 >>Year 11 $ 130,800 $ 178,128 $ 1,308 $ 1,781 $ 5,100 $ 6,095 $ 4,047 $ 39,901 $ 2,652 $ 3,169 $ 2,590 $ 3,527 $ 25,50 $ 3,047 $ 4,590 $ 5,485 $ 107,963 $ 115,122 $ 4,848 $ 5,302 $ 14,351 $ 26,628 Tax Incremental Financing Policy and Application 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 Page39 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 "green" features to be included in the project. All projects that receive TIF assistance are encouraged to include environmentally friendly features. 16 Page40 Tax Incremental Financing Policy and Application Filing Requirements You must provide all of the following items with your signed application: Notes 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. 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. 6. The undersigned also agrees to provide any additional information as may be requested by the City after filing of this application. Applicant Name. -- — Andy DumkeDate 4/10/2017 Page41 *INVISTA ANALYTICS 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 ASAI, infer AMERICAN STATISTICAL ASSOCIATION Page42 CONTENTS: Introduction / Objective.........................................................................1 MarketStudy.........................................................................................2 Project Valuation................................................................................3 Overall Investment Analysis .................................................................4 Potential Income..............................................................................4 Budgetand Funding.......................................................................4 TIFFunding......................................................................................5 Operational Proforma....................................................................7 Return On Investment...................................................................10 Page43 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. Figure 1 - Front elevation and overhead view of site 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. II .� � a 11 IIS V G "' X',,A � w.� f �°�:w I i Page44 Source of Information In many instances in this report IAwas 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. Figure 2 - Comparable Commercial Properties for Lease q Available Commercial Space , i9 Rate / SF Sq Ft Source University Of Utilities Furnished 1 - 146 Algoma - Suite C $9.00 Wisconsin www.blackteak.com None Not Included No Oshkosh $9.00 500-2500 www.blackteak.com 5-25 Not Included No 3 - 16 Washinton Ave $9.60 5000 MLS # 50154082 30 stalls Not Included No 4 - 217 N Main St $12.00 5825 MLS # 50092395 add Included No 5 - 601 Oregon St' $13.68 7000 MLS # 50141734 8 Not Included Yes 6 - 683 N Main $6.80 1500 MLS # 50148375 Shared Not Included No J Wrfltt Ave Mer W tV,r ro ; W 3111 Avt" .,.; �k ���^^� p IN���l4p ANN A 7th Ave d+ wf 4"ao° gtii Awa ,, I 011'o Ave 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. 1.Odtgi,4 i1,tmg offered as N NN lease. To adju ,e, im taxes wa sincorpoa into a per square foot are. 2 I L',, V S I A'," AI, I � C S.0 0� '\A Page45 Available Commercial Space Rate / SF Sq Ft Source Parking Utilities Furnished 1 - 146 Algoma - Suite C $9.00 2187 www.blackteak.com None Not Included No 2 - 240 Algoma Blvd $9.00 500-2500 www.blackteak.com 5-25 Not Included No 3 - 16 Washinton Ave $9.60 5000 MLS # 50154082 30 stalls Not Included No 4 - 217 N Main St $12.00 5825 MLS # 50092395 add Included No 5 - 601 Oregon St' $13.68 7000 MLS # 50141734 8 Not Included Yes 6 - 683 N Main $6.80 1500 MLS # 50148375 Shared Not Included No 1.Odtgi,4 i1,tmg offered as N NN lease. To adju ,e, im taxes wa sincorpoa into a per square foot are. 2 I L',, V S I A'," AI, I � C S.0 0� '\A Page45 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. W. ".m a ,r I X',,M N .r � �° w I 3 Page46 Modified Income Approach ch Calculation for Assessment Valuation Year Year Year Year 11 Amount Percent Amount Percent Amount Percent Amount Percent 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 5,364 4,047 30,539 39,901 Adjusted NOI 112,302 56.73% 112,010 56.50% 151,397 88.57% 155,251 57.92% Loaded CAP RATE 10.50% 10.50% 10.50% 10.50% Valuation 1,069,500 1,066,500 1,441,900 1,475,900 Valuation from Taxes 310,000 150,000 1,131,907 1,475,900 W. ".m a ,r I X',,M N .r � �° w I 3 Page46 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. 4 A X"I f` ,Y14Cw.0 UM Page47 Maximum Rental Income Potential Unit Type Sq Ft Rent/sf Monthly Rent Annual Rent Office Space Brew Pub 5459 14.07 6,400 4059 13.30 4,500 76,800 54,000 Total $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. 4 A X"I f` ,Y14Cw.0 UM Page47 Detailed Project Budget Amount w/ TIF w/o TIF Notes Acquisition & Site Pre Land Acquisition 110,000 110,000 Lot Acquisition 7,500 7,500 Subtotal $117,500 $117,500 Soft Costs Fees General Contractor 110,175 110,175 Architect/Engineer 55,088 55,088 Developer Fee (6%) 82,621 82,621 Appraisal 4,000 4,000 TIF Application 10,000 TIF Consulting / Market Study 18,000 Legal/Accounting 4,000 4,000 Insurance 2,500 2,500 Title/Recording/Transfer 3,000 3,000 Building Permit 10,821 10,821 Mortgage Fees 2,500 2,500 Construction Interest 6,301 6,301 Real Estate Taxes 4,344 4,344 4/1/2017 - 8/15/2017 Soft Cost Contingency 30,000 30,000 Subtotal $343,350 $315,350 Hard Costs Brew Pub 265,853 265,853 Office Space 351,083 351,083 Resteraunt Equipment 126,315 126,315 Exterior/Parking Lot 258,341 258,341 Contingency (10%) 100,159 100,159 Subtotal $1,101,751 $1,101,751 Total Project Costs $1,562,601 $1,534,601 Source of Fundin Permanent Financing 800,112 855,600 TIF Monitization Note 369,106 Equity by developer 393,384 679,001 Total Source of Funds 11562.: 1 534 601 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.) II S� a 11 IIS V 11 . "' I� I � "' X',,A � .� S I Page48 G ',, V l S I A X', AL.. N I{ C a. 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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. II .��all IIS V11. "' IIIII 1 �I��IC1"� I' f`�I"A, 'YSS I 7 Page50 Page5l a -I m ul 00 c W u . m I n u V N O N. W a -I .ti ti N oc m I 00-* r- M m O N w N O cl ci Lr O N N O m a -I N m � N IL O I� o c -i w tD m m m m L a Vf ttl Lrl � w n N n N m N N N N w a -I m L) .ti N O O w ul N n m w w M M O O a -I N .ti M tD m (n n w ti n ti O O w n w cr O .ti ul m m m O � u m N m N w 00 Q� I� l0 c -i Vf ul O m m N ul O V 16 Lr I Vf 01 ul ti n N n N N N N N w a -I m L) .ti N m .ti ul w oo (n oo tD tD O m N N Il m oo ti ti ul .� w �p m n u n O O u .ti w N n O o� if O cr N N O oo m m 00 cr ci 1 w a -I 01 oo n V Il c N -* n u m m m N ul O N m N N N N w M N ul tD a -I m L) .ti Vf N 00 ul ul O tD m m n n N m N N O ti Vf O ti N w n Il 00 N oo n N cr 1 oc ci a N m a m a lf n a w R ul .ti n c -i N N n ul m N m N ul (n N m N N N N Vf M N ul tD ei m L) .ti R N Il N ul Il ul N .ti O oo u) ul oo Il M oo .ti m m r- l0 n m N m .ti tD ti tD N cr 1 o� O a -I m m ILL if O w P� 01 tD n M Il c -i N a -I n ul Q� N m N ul (n N m N N N N Vf N N ul tD ei m L) .ti M N w O ul Vf a -I O m ti m O oo N m ul .ti n oo ci m o m M N n w n in in oo a m o m .ti m oo o a M (n } N ul .ti n ti N 0 n Lrl O N c6 N O N m N N N N Vf O Lrl & N N N ti M N LL H Vf O O O oo N N m O to .ti M m m� u M r o oo 0 o a oo O m m a a v o Lr O o a� a ui � o� o a cr cr m � a rn rn r-, O m W tD O M .y N m N ul O N N N m N m N N N N a O oo W N N oo a -I a -I O C N a O O O oo N o N m O m ul ul ul ul a -I '= o oo 0 `m o a co O m m a 4* O� r- Lr In � v m n i. ui � n oo 4* a C a m �o o rn r" m m Oy tD O c m ul O N N N� w O Lrl 4 oo a -I LL >-� u) n M N N N m N N N N a W N N oo a -I i C i M O O O O O O oo O N m N mo O N 00 O m w o o O V O m ul M N tD N m �p O Oo co m � N O� I- ul tD tD 1p o ll o0 .ti � n N 01 tD O i u M .y N (n N ul O N N N 00 N m a O ul 4 oo o0 N N oo N ti N O O O oo N O O o o m M O oo ul ti O O O `m o oo co O m (n a O ul m u m N O lf Lr Lr Lr Ln w L) � t m oc r" Vf M } a 6 o M .--� N (n N ui a N N N ri N N N N N N N n oo O N oo a a -I t/) a -I O O O oo N O O O O O V 00 O O ul o o o o oo co o m m a o o m o o .n O m lf Lr Lr Lr Ln M in o m oo n n M 01 tD O } M .y N (n N ul w N N N Vf N N N N N N N M o6 O N oo O a -I a° ul f0 T c -I N Y N 01 E v NO W N � a' C Q 01 E N w O N v � C 4 a v T V v E p C i LL m .Y�, E v .Q v c u v 'o ' m o m O LL �m`O >w x c� a`u p v um v E (D W W H Z Z Page5l I W.. 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W 17 {� d � b I .W I w:R Page52 a -I ul 00 , l0 O m a -I .ti ti N 00-* M m O tD N w N O m .ti ul O N N L} O .ti a -I llo� O O o r- W 1p &cr m m m Lr 1 Vf Lrl c -i oo" w .� n in n in m in in in in m ti in m ti o o m ul N n m oo oo M M o o m a M tD m m n to N o o oo n to mo .ti ul m m m o N N oo M a -I ai lo" .� vi ui o m mi ri ui o" w v� ti n inn lf�alf� lf� lf� lf�m ti m ti m .ti ul w oo m oo tD tD O m N N Il O oo m O ul .ti w �0 m n tl) n O O ul .ti oo N n O oc if O lzl m N N O N rn .ti Oo ci o� m pl 01 o6 n Lr } ul .� n ci in R n tl) m m m N ul O in m in in in in to M ul c -i ti in rn w ti 00 m N N O m n O .ti N `m m m m r- n O0 N oo ul n tD Vf I- N rn a octi a N N ti a o� Vf a 01 n n R } ul .� n c -i in N n Lrl m N m N ul Gl in m in in in in .n M Lrl c -i ti in rn w ti Il N ul Il ul N .ti O oo tl) ul oo Il Vf O ul m a -I oo ci (n m 4* m n 1p n if N cr 1 oc O a -I lG O o� M pl } tD r- M ul .� n .--i in a -I n ul m N m N ul Gl in m in in in in .n N ul c -i ti in rn Vf ti to o o m m o oo N m o in m m oo (n o m M N il to n ul ul oo a m o m in m o oo M pl 01 Lr r- N Il ci N O n Ll) O N m N 0 N m N N N N Vf O ul ci N N m M N LL H Vf O O O o o o `m oo O N m N m O to .ti M lf oc o w m O3 m ul a n m m o o oo oo m a Lr � aa ul � o� o o cr cr rn a rn a Y 01 a 0 .ti (n ul O N N N Ol O O M 1/} 1/} a -I N N a -I N m N N N N a 1/} Vi W N tD Vi 1/} a -I V1• O V O O O o o o o oo oo oo o m N m a lD N m O m ul w o ul m ul v m r- r- Lr In r-, oo w O ul ul a in a ul m cr cr Vf a n Y 01 a Is 0 M .ti N Ol N L' o N N N 4 00 N m N N N N a O W N tD O a -I c N M O O O o o o `m oo O N m N O o O o N 00 o oc 0 o o� V O m ul in N o0 C7 o o� oo m a Lr N oc � ul � � to w o oo m 00 0� rn m 'D a 0 M .ti N Ol N ul O N N N 00 N m N N N N a O W N tD O a -I N O O O oo N O O o o m M O oo ul O O O O o oo oo O m (n a O ul m u m N O if Lr Lr Lr Ln w L) � u m oo m w ti 01 tD O } M ci N (n N ul N N N a -I N N N N N N N P� O N tD o M a -I O O O oo N O 0 0 0 0 4 00 O O ul M o o o o oo oo o m m a o o m o o � O m if Lr Lr Lr Ln M in o in m oo m oo ti w a's 6 } ul M .-i in Gi N u oo N N ri a vi in in in in in in N m o in M a° ul T c -I N Y _ .W.. y Q N d NO Eo CwtC O LL LL N v v U O C v v ro c v v O a d ? (7 c, i LL N ^ w 3 u a° i c v O a z m E w o 2 O a v v um` O E > w v o o o x a u p LL v um v V W W H Z Z I W.. S F II I I A I .P I f ' ... W 17 {� d � b I .W I w:R Page52 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. Page53 Return on Investment Metrics With TIF W itho ut TI F Net Cash Flow Reversion Total Net Cash Flow Reversion Total Initial 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 25,861 486,952 512,814 17,134 680,325 697,459 Yr 11 NOI 115,122 115,122 Terminal Cap Rate 7.802% 7.802% Gross Reversion Bldg 1,475,500 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% 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. Page53 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 scantly. 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, �g� V Timothy Hess, PhD INV ISTA ANALYTICS 240 Algoma Blvd - Suite A Oshkosh, WI 54901 920.203.2177 www.invista-analytics.com Page54 i II Cwt jI1\A 1°:: I 11 I� S I f I"�M I .�Vww i"i +INVISTA ANALYTIC Page55 Mr. Nau presented the item and reviewed the site and surrounding area as well as the land use and zoning classifications in this area. He discussed the proposed use which would be a hydraulic repair business which is relocating from their current site on W. 14th Avenue. He discussed the number of employees and hours of operation and that the use would have a minimal traffic generation compared to the previous use. The operations would be conducted within the building with no adverse effects on the neighboring properties. The use is consistent with commercial land use plans and the site is fully developed with no changes proposed to the existing site design. He also discussed outdoor storage which is not proposed but would be required to be screened appropriately if established. He reviewed the parking stalls for the site and the access to the site and stated that the parking stalls were in need of being repainted. The existing roof sign is going to be re -used and he reviewed the site plan and photos of the site. He discussed the monument signage that the petitioner was considering however he has since decided not to install one at this time. Landscaping and storm water management plans are not required for the site as the existing conditions are not being altered. He discussed the removal of some of the windows on the front elevation to enable the installation of overhead doors. He stated that details for a refuse enclosure have not been submitted but will be addressed during the site plan review process and he reviewed the conditions recommended for this request. There was no discussion on this item. Motion by Borsuk to approve a conditional use permit for a light industrial use (hydraulic cylinder repair) for property located at 541 W. 10th Avenue with the following conditions: 1. No outdoor storage of equipment, parts, materials or inoperable vehicles unless a designated storage area is created and provides minimum screening requirements. 2. Parking stall striping be repainted within the off-street parking area. Seconded by Nollenberger. Motion carried 8-0. V. PUBLIC HEARING ON PROPOSED CREATION OF TAX INCREMENT FINANCING DISTRICT NO. 32 GRANARY REHABILITATION; DESIGNATION OF BOUNDARIES AND APPROVAL OF PROJECT PLAN Tax Incremental District No. 32 (the "TID" or "District") is a proposed 0.45 acre district in need of rehabilitation or conservation located in the former "The Granary" restaurant building at 50 W. 6th Avenue. Creation of the District is intended to facilitate rehabilitation of the historic locally Landmarked H.P. Schmidt Mill building, which also includes an adjacent non -original building addition to the east for total building area of about 9,500 square feet. TIF in this case would be used to rehabilitate the structure into a combination of offices for one user in the original building and a brew pub in the addition. The building has sat vacant for a number of years and reflects some deferred maintenance creating a blighting influence in the area. The City anticipates making total Project Cost expenditures of approximately $710,000 to facilitate rehabilitation within the District. This total is comprised of $661,806 in potential "pay as Plan Commission Minutes Page56 May 2, 2017 you go" development incentives for a total project cost of approximately $1.5 million dollars which includes $110,000 for acquisition of the property. Hard construction costs are estimated at approximately $1.1 million. The District also includes a vacant property to the southwest that will be turned into a parking lot. The project also will include rehabilitation of the existing parking lot to the east of and adjacent to 40 W. 61h Avenue as well as improvement to the "alley" to the north of the building which is W. 5th Avenue where additional public parking will be provided. Ms. Williams presented the item and discussed the purpose of the creation of the District and reviewed the boundaries and photos of the existing structure. She reviewed the site and surrounding area as well as the land use and zoning classifications in this area and discussed the proposed uses for the site. She reviewed the project cost expenditures and stated that the life of the proposed TIF would be 22 to 27 years. She discussed the IRR (Internal Rate of Return) which would be 1.95% without the TIF assistance and 4.74% with the TIF which is generally consistent with the IRR's of other TIF redevelopment projects. She stated that the proposed plan is in conformance with the City's zoning designation, redevelopment plans and Comprehensive Plan. She further stated that the development was in character with the other uses in the area and would be coming back before the Plan Commission for review and approval of the General Development Plan and Specific Implementation Plan. She discussed the improvements within the District which would include sidewalks, the riverwalk, building improvements, and improvements to the private parking lot adjacent to the existing structure and the parking lot adjacent to the district. Mr. Borsuk stated that he was not clear on the amount of money raised during the life of the TIF and questioned if there was a guaranteed increment included as part of the developer's agreement. Ms. Williams responded that the TIF project plan and development agreement will be approved together and this would be addressed at that time. Chet Wesenberg, 240 Algoma Boulevard, stated that he was the architect for the development and was available to answer any questions related to this item. Motion by Borsuk to approve the creation of Tax Increment Financing District No. 32 Granary Rehabilitation; designation of boundaries and approval of project plan. Seconded by Thoms. Motion carried 8-0. There being no further business, the meeting adjourned at approximately 4:35 pm. (Hinz/Bowen) Plan Commission Minutes Respectfully submitted, Elizabeth Williams Planner Page57 May 2, 2017 ITEM: PUBLIC HEARING ON PROPOSED CREATION OF TAX INCREMENT FINANCING DISTRICT NO. 32 GRANARY REHABILITATION• DESIGNATION OF BOUNDARIES AND APPROVAL OF PROJECT PLAN Plan Commission meeting of May 2, 2017 Prior to taking action on proposed Tax Increment District (TID) No. 32 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. 32. 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: 50 W. 6TH St., LLC Property Owner: Andy Dumke, Chet Wesenberg, Cal Schultz, Tim Hess GENERAL DESCRIPTION/BACKGROUND Tax Incremental District No. 32 (the "TID" or "District") is a proposed 0.45 acre district in need of rehabilitation or conservation located in the former "The Granary" restaurant building at 50 W. 61h Avenue. Creation of the District is intended to facilitate rehabilitation of the historic locally Landmarked H.P. Schmidt Mill building, which also includes an adjacent non -original building addition to the east for total building area of about 9,500 square feet. TIF in this case would be used to rehabilitate the structure into a combination of offices for one user in the original building and a brew pub in the addition. The building has sat vacant for a number of years and reflects some deferred maintenance creating a blighting influence in the area. The City anticipates making total Project Cost expenditures of approximately $710,000 to facilitate rehabilitation within the District. This total is comprised of $661,806 in potential "pay as you go" development incentives for a total project cost of approximately $1.5 million dollars which includes $110,000 for acquisition of the property. Hard construction costs are estimated at approximately $1.1 million. The District also includes a vacant property to the southwest that will be turned into a parking lot. The project also will include rehabilitation of the existing parking lot to the east of and adjacent to 40 W. 6th Avenue as well as improvement to the "alley" to the north of the building which is W. 5th Avenue where additional public parking will be provided. 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. Using the City's TIF Application Scoring criteria (attached) this project scored 81 out of 100 points scoring maximum points for blight elimination, historic preservation, and enhancing the pedestrian experience through creation of outdoor seating and landscaping along 61h Avenue which will eventually connect to the riverwalk. The project also is scoring for environmental sustainability for proposed use of solar panels for energy production. ANALYSIS 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 of the building and development of the parking lot. 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 new development and redevelopment and associated values is located in Section 10 of the Project Plan. Based on the Economic Feasibility Study located in Section 10 of the Project Plan, this T I F District would be expected to remain open for 22 of the maximum 27 statutory years. 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 incentivize developers to make the necessary private investment. In this case the cash flow analysis (Appendix B) shows a 10 year IRR (Internal Rate of Return) without TIF of 1.95% and a 4.72% IRR with TIF. The "with TIF" IRR is below standard development expectations and is generally consistent with IRR's of other recent TIF redevelopment projects such as the Beach Building (TID No. 28), Morgan District (T1D No. 29) and Washington Building (TID No. 30). 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 Development Overlay zoning district to implement the Plan other than review and approval of a General Development Plan and Specific Implementation Plan that will be brought forward at a subsequent Plan Commission meeting for review. 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. It should be noted that as a locally designated Landmarked structure, the developers will be able to utilize the Historic Building Code for the rehabilitation. 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. RECOMMENDATIONS/CONDITIONS Staff recommends approval of the Project Plan and Boundaries for TID #32 as proposed. The Plan Commission approved of the Project Plan and Boundaries for TID #32 as requested. The following is the Plan Commissions discussion on this item. Item: Creation of TID #32 Granary Redevelopment Ms. Williams presented the item and discussed the purpose of the creation of the District and reviewed the boundaries and photos of the existing structure. She reviewed the site and surrounding area as well as the land use and zoning classifications in this area and discussed the proposed uses for the site. She reviewed the project cost expenditures and stated that the life of the proposed TIF would be 22 to 27 years. She discussed the IRR (Internal Rate of Return) which would be 1.95% without the TIF assistance and 4.74% with the TIF which is generally consistent with the IRR's of other TIF redevelopment projects. She stated that the proposed plan is in conformance with the City's zoning designation, redevelopment plans and Comprehensive Plan. She further stated that the development was in character with the other uses in the area and would be coming back before the Plan Commission for review and approval of the General Development Plan and Specific Implementation Plan. She discussed the improvements within the District which would include sidewalks, the riverwalk, building improvements, and improvements to the private parking lot adjacent to the existing structure and the parking lot adjacent to the district. Mr. Borsuk stated that he was not clear on the amount of money raised during the life of the TIF and questioned if there was a guaranteed increment included as part of the developer's agreement. Ms. Williams responded that the TIF project plan and development agreement will be approved together and this would be addressed at that time. Chet Wesenberg, 240 Algoma Boulevard, stated that he was the architect for the development and was available to answer any questions related to this item. Motion by Borsuk to approve the creation of Tax Increment Financing District No. 32 Granary Rehabilitation; designation of boundaries and approval of project plan. Seconded by Thoms. Motion carried 8-0. Item: Creation of TID #32 Granary Redevelopment Tax Incremental Financing Criteria Score Sheet Redevelopment/Blight Elimination TID # 32 Granary Rehabilitation Criteria Maximum Points Score 1. Presence of extraordinary development/redevelopment costs 20 such as: a. Remodeling/Rehabilitation/Demolition b. Environmental Remediation 25 c. Capital purchases d. Facility expansion e. Public Infrastructure 2. Project provides direct benefit to distressed areas through 25 blight elimination or redevelopment. 25 3. Projects that directly implement specific recommendations of 8 the City's strategic planning documents such as the Comprehensive Plan, Downtown Action Plan, Riverwalk Plan, 10 Vision Report, etc. 4. Historic Preservation or rehabilitation of a nationally or 15 locally significant historic structure. 15 5. Quality of development and overall aesthetics (architectural, 3 site design, landscaping, etc) beyond that which is minimally 5 required by the Zoning Ordinance. 6. Environmental sustainability impacts such as higher 3 standards of building and site design, materials and energy . efficiency. a. LEED certification, Energy Star, etc 5 b. Use of Green Infrastructure c. Solar and Wind energy production 7. Enhance the streetscape and pedestrian experience. 5 5 8. Proposed employment potential. 5 2 9. Projects that involve development that is targeted to encourage an inflow of customers from outside the city or 5 that provides services or fill underserved markets in the City. Point Total must be greater than 50 points or Council waiver is 81 required 100 3 a 0 z 0 0 W 0 a m Tax Increment District #32 Grane ryRedevelo Redevelopment of District Boundary Oshkosh P] N N O q VF 106 z M W N D a W 7TH AVE W 8TH AVE 113 ` iU7 , . 600 602 604 606 620 622 824 62E, Legend -. If FT -1 tee. 6,a �,2 a,4. a8 a�n 632 834 _ 680:.652 664'-666 - 840 642 644 846. TID #32 Boundary 0 25 50 100. 150 N Feet we ii 10 � 868=:670 972',-874 848. 850•'852 954= Date: Monday,A 1 17, 2017 s TIF NO. 32 GRANARY REDEVELOPMENT PC: 05-02-17 M & D ENTERPRISES OF OSHKOSH LLC 110 W 7TH AVE OSHKOSH W154902-6044 DENNIS J/MAUREEN WINKLER 122 W 71H AVE OSHKOSH WI 54902-6044 RO TITAN LLC 691 S GREEN BAY RD NEENAH WI 54956-3153 6TH WARD LLC 15 STERLING AVE OSHKOSH WI 54901-4569 50 WEST 6TH STREET LLC 200 OHIO ST 230 OSHKOSH WI 54902-5884 RIVERFRONT DEVELOPMENT LLC 55 E JACKSON BLVD 500 CHICAGO IL 60604-4101 PHILIP H BAIER 243 W 15TH AVE OSHKOSH WI 54902-6513 REDEVELOPMENT AUTH Cn Y OF OSHKOSH PO BOX 1130 OSHKOSH WI 54903-1130 KURT A KOEPPLER ETAL 40 W 6TH AVE OSHKOSH WI 54902-6036 TIMOTHY R SCHISSEL 1223 WESTERN ST OSHKOSH WI 54901-3667 5 The City of Oshkosh creates and maintains GIS maps and data for its own use. They may show the approximate relative location of property, boundaries and other feature from a variety of sources. These map(s)/datasets are provided for information purposes only and may not be sufficient or appropriate for legal, engineering, or surveying purposes. They are provided 'AS -IS' without warranties of any kind and the City of Oshkosh assumes no liability for use or misuse. Commission Re Plan Map TemplateRan N 1in=0.02 mi 'A lin=80 ft Printing Date: 4/19/2017 Prepared by: City of Oshkosh, WI ^4 hu 3 x =0 shkosh R 75 l 111 IdA Illl tlo= —! 01 SUBJECT 11M SITE �iMot Mill mtln s�� Gam• 11 511"IN. Imliml - 1