HomeMy WebLinkAbouttid-37-final-project-plan
July 2, 2019
Project Plan for the Creation of
Tax Incremental District No. 37
(Aviation Plaza Redevelopment)
Organizational Joint Review Board Meeting: June 28, 2019
Public Hearing: July 2, 2019
Approval by Plan Commission: July 2, 2019
Adoption by Common Council: July 23, 2019
Approval by the Joint Review Board: July 24, 2019
Tax Incremental District No. 37 Creation
Project Plan
City of Oshkosh Officials
Common Council
Lori Palmeri Mayor
Steve Herman Deputy Mayor
Debra L. Allison-Aasby Council Member
Jake Krause Council Member
William Miller Council Member
Matt Mugerauer Council Member
Bob Poeschl Council Member
City Staff
Mark Rohloff City Manager
Allen Davis Community Development Director
Lynn Lorenson City Attorney
Mark Lyons Acting Planning Manager
Kelly Nieforth Economic Development Services Manager
Trena Larson Finance Director
Pamela Ubrig City Clerk
Plan Commission
Thomas Fojtik, Chair John Kiefer
Kathleen Propp, Vice-Chair Justin Mitchell
Lynnsey Erickson Lori Palmeri, Mayor
Mike Ford Thomas Perry
Derek Groth
John Hinz
Joint Review Board
Mark Rohloff, City Manager City Representative
Mark Harris, County Executive Winnebago County
Amy Van Straten, Chief Financial Officer Fox Valley Technical College District
Barbara Herzog, School Board President Oshkosh School District
Burk Tower Public Member
Table of Contents
EXECUTIVE SUMMARY .............................................................................................................................. 4
TYPE AND GENERAL DESCRIPTION OF DISTRICT ................................................................................ 7
PRELIMINARY MAPS OF PROPOSED DISTRICT BOUNDARY ................................................................ 8
MAPS SHOWING EXISTING USES AND CONDITIONS .......................................................................... 10
PRELIMINARY PARCEL LIST AND ANALYSIS ........................................................................................ 12
EQUALIZED VALUE TEST ......................................................................................................................... 13
STATEMENT OF KIND, NUMBER AND LOCATION OF PROPOSED PUBLIC WORKS AND OTHER
PROJECTS ................................................................................................................................................. 14
MAP SHOWING PROPOSED IMPROVEMENTS AND USES .................................................................. 16
DETAILED LIST OF PROJECT COSTS ..................................................................................................... 18
ECONOMIC FEASIBILITY STUDY, FINANCING METHODS, AND THE TIME WHEN COSTS OR
MONETARY OBLIGATIONS RELATED ARE TO BE INCURRED ............................................................ 20
ANNEXED PROPERTY .............................................................................................................................. 25
ESTIMATE OF PROPERTY TO BE DEVOTED TO RETAIL BUSINESS .................................................. 25
PROPOSED ZONING ORDINANCE CHANGES ....................................................................................... 25
PROPOSED CHANGES IN MASTER PLAN, MAP, BUILDING CODES AND CITY OF OSHKOSH
ORDINANCES ............................................................................................................................................ 25
RELOCATION ............................................................................................................................................. 25
ORDERLY DEVELOPMENT OF THE CITY OF OSHKOSH ...................................................................... 26
LIST OF ESTIMATED NON-PROJECT COSTS ........................................................................................ 26
OPINION OF ATTORNEY FOR THE CITY OF OSHKOSH ADVISING WHETHER THE PLAN IS
COMPLETE AND COMPLIES WITH WISCONSIN STATURES 66.1105 ................................................. 27
CALCULATION OF THE SHARE OF PROJECTED TAX INCREMENTS ESTIMATED TO BE PAID BY
THE OWNERS OF PROPERTY IN THE OVERLYING TAXING JURISDICTIONS ................................... 28
APPENDIX A- DEVELOPERS TAX INCREMENTAL FINANCING APPLICATION ................................... 29
APPENDIX B- MARKET STUDY AND INVESTMENT ANALYSIS REPORT ............................................ 43
PLAN COMMISSION PUBLIC HEARING/MINUTES OF JULY 2, 2019 .................................................... 57
COMMON COUNCIL CREATION RESOLUTION OF JULY 23, 2019 ....................................................... 63
JOINT REVIEW BOARD RESOLUTION OF JULY 24, 2019 ..................................................................... 66
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 4 July 2, 2019
SECTION 1:
Executive Summary
Description of District
Tax Incremental District (“TID”) No. 37 (“District”) is a proposed district in need of rehabilitation or
conservation consisting of five parcels and approximately 27 acres collectively referred to as the Aviation
Plaza center located northwest of the intersection of W. South Park Ave. and S. Koeller Street and
abutting Interstate 41. The existing commercial building in the District contains approximately 117,000
sq. ft. of retail space with Rogan’s Shoes as the only current occupant following the closure of the J.C.
Penny store in 2015. Mineshaft Oshkosh LLC, Extreme Customs LLC, and Rogan’s Shoes Inc.
(collectively, “Developer”) have submitted a plan to redevelop the properties located within the District.
The Developer’s plan includes construction of a new 35,600 sq. ft. building that will operate as a
Mineshaft restaurant and family entertainment facility, and renovation of the existing commercial
building (“Project”). A portion of the renovated building would continue to be occupied by Rogan’s
Shoes with most of the remaining space to be occupied by Extreme Customs, a technology and
automotive firm specializing in online sales of custom rims and tires. The Extreme Customs facilities will
include retail, office, product installation, and warehousing space. General Development Plans and
Specific Implementation Plans were approved for Extreme Customs on February 12, 2019 (Resolution
19-91) and Mineshaft on May 28, 2019 (Resolution 19-319). The District will be created to pay
incentives to reimburse the Developer for costs incurred related to the rehabilitation of public and private
infrastructure and improvements. The Project represents an estimated $22.8 million investment in the site
with approximately $500,000 to be funded with a WEDC Idle Sites Grant, $1.89 million with a
development incentive funded by the District, and the balance from private investment.
Authority
The City is creating the District under the provisions of Wis. Stat. § 66.1105.
Estimated Total Project Cost Expenditures
The City anticipates making total expenditures of approximately $4.84 million (“Project Costs”) to
undertake the projects listed in this Project Plan (“Plan”). Project Costs include an estimated $1.89
million in development incentives, $2.75 million for additional public infrastructure improvements, and
an estimated $200,000 in District administrative expense.
Incremental Valuation
The City projects that an incremental increase in land and improvements value of approximately $12.4
million will result from the Project. Creation of this additional value will be made possible by the Project
Costs made within the District. Assumptions as to the development timing and associated values are
included in Section 10 of this Plan.
Expected Termination of District
Based on the Economic Feasibility Study located within Section 10 of this Plan, the City anticipates that
the District will generate enough tax increment to pay all Project Costs by the year 2036, reflecting 16
years of tax increment collections, and 18 years of total elapsed time. A total of 7 years of tax increment
collections would be needed to repay the development incentive amount included in the Plan, with the
remaining years funding potential City infrastructure projects. If necessary, the District would be
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 5 July 2, 2019
permitted to remain open for up to 29 years, allowing for up to a total of 27 years of tax increment
collection.
Summary of Findings
As required by Wis. Stat. § 66.1105, and as documented in this Plan and the exhibits contained and
referenced herein, the following findings are made:
1. That “but for” the creation of this District, the development projected to occur as detailed
in this Plan: 1) would not occur; or 2) would not occur in the manner, at the values, or
within the timeframe desired by the City. In reaching this determination, the City has
considered that the commercial building in the District has remained largely vacant and
underutilized since 2015 with current occupancy of 17%. Deterioration of the building and site
improvements, as well as the need to rehabilitate public infrastructure serving the site, have
presented an impediment to leasing and redevelopment. The City does not have funds available to
pay for the costs of rehabilitating the public infrastructure and will require the Developer to
provide the funding less that portion expected to be paid from a WEDC Idle Sites Grant. The
requirement to fund the public infrastructure rehabilitation as well as the additional costs the
Developer will incur to address the on-site costs related to deteriorating site and building
improvements make it unlikely that the Project will proceed as proposed with the use of tax
incremental financing. The City therefore finds it to be reasonable and necessary to use tax
incremental financing to reimburse the Developer for the cost of the public infrastructure
rehabilitation and certain other on-site costs that will need to be made to allow the Project to
proceed.
2. The economic benefits of the District, as measured by increased employment, business and
personal income, and property value, are sufficient to compensate for the cost of the
improvements. In making this determination, the City has considered that in addition to the
incremental value expected to be created, the Project will provide increased employment
opportunities and space to accommodate retail and service businesses that will support residents
and workers in the area.
3. The benefits of the proposal outweigh the anticipated tax increments to be paid by the
owners of property in the overlying taxing jurisdictions. As required by Wis. Stat. §
66.1105(4)(i)4., a calculation of the share of projected tax increments estimated to be paid by the
owners of property in the overlying taxing jurisdictions has been prepared and can be found in
Appendix A of this plan. However, because the Project would not occur without the use of tax
incremental financing, these tax increments would not be paid but for creation of the District.
Accordingly, the City finds that the benefits expected to be realized as set forth in this Plan
outweigh the value of the tax increments to be invested in the Project.
4. Not less than 50% by area of the real property within the District is in need or rehabilitation or
conservation as defined by Wis. Stat. § 66.1337(2m)(a) and as further detailed in Section 5 of the
Plan.
5. Based on the foregoing finding, the District is designated as a district in need of rehabilitation or
conservation.
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 6 July 2, 2019
6. The Project Costs relate directly to the rehabilitation or conservation of property in the District,
consistent with the purpose for which the District is created.
7. Improvements to be made in the District are likely to significantly enhance the value of
substantially all of the other real property in the District.
8. The equalized value of taxable property in the District, plus the incremental value of all existing
tax incremental districts within the City does not exceed 12% of the total equalized value of
taxable property within the City.
9. That there are no parcels to be included within the District that were annexed by the City within
the three-year period preceding adoption of this Resolution.
10. That approximately 75% 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).
11. The Plan for the District is feasible and is in conformity with the Master Plan of the City.
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 7 July 2, 2019
SECTION 2:
Type and General Description of District
The District is a proposed district in need of rehabilitation or conservation consisting of five parcels and
approximately 27 acres collectively referred to as the Aviation Plaza center located northwest of the
intersection of W. South Park Ave. and S. Koeller Street and abutting Interstate 41. The existing
commercial building in the District contains approximately 117,000 sq. ft. of retail space with Rogan’s
Shoes as the only current occupant following the closure of the J.C. Penny store in 2015. The Developer
has submitted a plan to redevelop the properties located within the District. The Developer’s plan includes
construction of a new 35,600 sq. ft. building that will operate as a Mineshaft restaurant and family
entertainment facility, and renovation of the existing commercial building. A portion of the renovated
building would continue to be occupied by Rogan’s Shoes with most of the remaining space to be
occupied by Extreme Customs, a technology and automotive firm specializing in online sales of custom
rims and tires. The Extreme Customs facilities will include retail, office, product installation, and
warehousing space. General Development Plans and Specific Implementation Plans were approved for
Extreme Customs on February 12, 2019 (Resolution 19-91) and Mineshaft on May 28, 2019 (Resolution
19-319). The District will be created to pay incentives to reimburse the Developer for costs incurred
related to the rehabilitation of public and private infrastructure and improvements. The Project represents
an estimated $22.8 million investment in the site with approximately $500,000 to be funded with a
WEDC Idle Sites Grant, $1.89 million with a development incentive funded by the District, and the
balance from private investment.
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 8 July 2, 2019
SECTION 3:
Preliminary Maps of Proposed District Boundary
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 9 July 2, 2019
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 10 July 2, 2019
SECTION 4:
Maps Showing Existing Uses and Conditions
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 11 July 2, 2019
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 12 July 2, 2019
SECTION 5:
Preliminary Parcel List and Analysis
The following table identifies the parcels to be included in the District. The entirety of the District is an
area in need of rehabilitation or conservation as defined in Wis. Stat. § 66.1337(2m)(e). Specifically, the
District consists of land where:
1. Plans for a program of voluntary repair and rehabilitation of buildings or other improvements will
be carried out. As part of the Project, the existing commercial building located in the District,
which is deteriorating and has a 17% occupancy rate, will be rehabilitated to accommodate the
relocation of Extreme Customs LLC’s operations to the building.
2. Installation, construction or reconstruction of utilities and other improvements is necessary for
carrying out the objectives of an urban renewal project. As part of the Project, deteriorating
public infrastructure and private site improvements, which have presented an impediment to
leasing and redevelopment, will be rehabilitated.
City of Oshkosh, Wisconsin
Tax Increment District # 37
Base Property Information1
District
Classification
Map
ID #Parcel Number Street Address Owner Acreage Land Imp Total
Equalized
Value
Ratio
Land Imp Total
In Need of
Rehabilitation/
Conservation
1 13‐3422‐2034 2041 S KOELLER ST MASTERS OSHKOSH LLC 16.43 1,745,700 529,300 2,275,000 92.54% 1,886,427 571,969 2,458,396 16.43
2 13‐2310‐0404 2145 S KOELLER ST ROGAN STORES OSHKOSH LLC 3.53 625,900 639,700 1,265,600 92.54% 676,356 691,269 1,367,625 3.53
3 13‐2310‐0401 2175 S KOELLER ST PHOENIX REALTY LLC 2.38 399,100 1,275,700 1,674,800 92.54% 431,273 1,378,539 1,809,812 2.38
4 13‐2310‐0402 2185 S KOELLER ST PHOENIX REALTY LLC 0.45 75,200 367,300 442,500 92.54% 81,262 396,909 478,172 0.45
5 13‐2310‐0403 0 S KOELLER ST PHOENIX REALTY LLC 3.79 569,000 54,500 623,500 92.54% 614,869 58,893 673,763 3.79
Total Acreage 26.58 3,414,900 2,866,500 6,281,400 3,690,188 3,097,579 6,787,767 26.58
100.00%
Estimated Base Value 6,787,767
Notes:
1Assessed values as of 1‐1‐2019 per City Assessor. Equalization ratio reflects estimated 1‐1‐2019 ratio as provided by City Assessor.
Property Information Assessment Information Equalized Value
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 13 July 2, 2019
SECTION 6:
Equalized Value Test
The following calculations demonstrate that the City expects to be in compliance with Wis. Stat. §
66.1105(4)(gm)4.c., which requires that the equalized value of the taxable property in the proposed
District, plus the value increment of all existing tax incremental districts, does not exceed 12% of the total
equalized value of taxable property within the City.
The equalized value of the increment of existing tax incremental districts within the City, plus the base
value of the proposed District, totals $154,498,067. This value is less than the maximum of $488,841,912
in equalized value that is permitted for the City.
District Creation Date 7/23/2019
Valuation Data
Currently Available
2018
Total EV (TID In) 4,073,682,600
12% Test 488,841,912
Increment of Existing TIDs 147,710,300
Projected Base of New or Amended District 6,787,767
Total Value Subject to 12% Test 154,498,067
Compliance PASS
City of Oshkosh, Wisconsin
Tax Increment District # 37
Valuation Test Compliance Calculation
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 14 July 2, 2019
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 as outlined in this Plan. Project Costs will be diminished by any income, special
assessments or other revenues, including user fees or charges, other than tax increments, received or
reasonably expected to be received in connection with the implementation of the Plan. If Project Costs
incurred benefit territory outside the District, a proportionate share of the cost is not a Project Cost. Costs
identified in this Plan are preliminary estimates made prior to design considerations and are subject to
change after planning, design and construction is completed. With all Project Costs, the costs of
engineering, design, survey, inspection, materials, construction, restoring property to its original
condition, apparatus necessary for public works, legal and other consultant fees, testing, environmental
studies, permits, updating City ordinances and plans, judgments or claims for damages and other expenses
are included as Project Costs. The following is a list of public works and other tax incremental financing
eligible Project Costs that the City expects to make, or may need to make, in conjunction with the
implementation of the District’s Plan. The map found in Section 7 of this Plan along with the Detailed
List of Project Costs found in Section 9 provide additional information as to the kind, number and
location of potential Project Costs.
Public Improvements
Sanitary Sewer, Water System and Stormwater Management Improvements
The Project may require that the City make improvements to its sanitary sewer collection system, water
distribution system and stormwater management system. To the extent that improvements are necessitated
by, or provide a benefit to, the Project the City may allocate the cost, or a portion of the costs, to the
District. Any costs incurred by the City for improving the its utility systems that benefit the Project are
eligible Project Costs. Costs for such improvements may be made within the District, or outside the
District as permitted under Wis. Stat. § 66.1105(2)(f)1.k.
Sidewalks and Multi-Use Trails
The Project may require the City to install or improve sidewalks or multi-use trails to promote
connectivity to the District and to improve pedestrian safety. To the extent that improvements are
necessitated by, or provide a benefit to, the Project the City may allocate the cost, or a portion of the
costs, to the District. Any costs incurred by the City for installing improving sidewalks or multi-use trails
that benefit the Project are eligible Project Costs. Costs for such improvements may be made within the
District, or outside of but within ½ mile of the District’s boundary as permitted under Wis. Stat. §
66.1105(2)(f)1.n.
Community Development
Cash Grants (Development Incentives)
The City may enter into agreements with property owners, lessees, or developers of land located within
the District for sharing costs to encourage the desired kind of improvements and assure tax base is
generated sufficient to recover Project Costs. No cash grants will be provided until the City executes a
developer agreement with the recipient of the cash grant. Any payments of cash grants made by the City
are eligible Project Costs.
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 15 July 2, 2019
Miscellaneous
Professional Service and Organizational Costs
The costs of professional services rendered, and other costs incurred, in relation to the creation,
administration and termination of the District, and the undertaking of the projects contained within this
Plan, are eligible Project Costs. Professional services include but are not limited to: architectural;
environmental; planning; engineering; legal; audit; financial; and the costs of informing the public with
respect to the creation of the District and the implementation of the Plan.
Administrative Costs
The City may charge to the District as eligible Project Costs reasonable allocations of administrative
costs, including, but not limited to, employee salaries. Costs allocated will bear a direct connection to the
time spent by City employees relating to the implementation of the Plan.
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 16 July 2, 2019
SECTION 8:
Map Showing Proposed Improvements and Uses
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 17 July 2, 2019
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 18 July 2, 2019
Project Name/Type Mineshaft
Extreme
Customs Rogan's
General
District
Costs Total
2022‐2027 2022‐2027 2022‐2027 2019‐2047
Development Incentives1
Sewer & Water Reimbursement 62,998 169,320 136,876 369,194
Stormwater Reimbursement 147,392 105,697 85,445 338,534
Other On‐Site Improvements Reimbursement 227,232 227,232
Drive Apron & Curb Reimbursement 171,240 171,240
Building Improvements Reimbursement 87,724 87,724
Development Wide Stormwater Reimbursement 515,616 515,616
Estimated Interest on Incentive 63,595 37,888 23,221 178,559
Public Infrastructure 2,750,000 2,750,000
TIF Administrative Expenses 200,256 200,256
Total Projects 672,457 400,629 245,542 3,465,872 4,838,355
Notes:
1Incentive amount shown for purposes of establishing economic feasibility only. The City has not agreed to terms or conditions with the
1proposed Developer as to any public participation in the project.
City of Oshkosh, Wisconsin
Tax Increment District # 37
Detailed List of Project Costs
SECTION 9:
Detailed List of Project Costs
The following list identifies the Project Costs that the City currently expects to incur in implementing the
District’s Plan. All projects identified, and related costs reflect the best estimates available as of the date
of preparation of this Plan. All costs are preliminary estimates and may increase or decrease. Certain
Project Costs listed may become unnecessary, and other Project Costs not currently identified may need
to be made. (Section 7 details the general categories of eligible Project Costs). Changes in Project Cost
totals or the types of Project Costs to be incurred will not require that this Plan be amended. This Plan is
not meant to be a budget nor an appropriation of funds for specific Project Costs, but a framework within
which to manage Project Costs.
The Development Incentives noted on the above table consist of payments that will be made to reimburse
the Developer for the following specific work items:
Sewer and Water Reimbursement – Upgrading the water and sanitary laterals on site that are currently
not in compliance with City or State code.
Stormwater Reimbursement – Upgrading the entire 26 acre site’s stormwater management system to
meet City and State code.
Other On-Site Improvements Reimbursements – Engineering, geotechnical testing, relocating and
installing utilities, and restoration related to the utility improvements.
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 19 July 2, 2019
Drive Apron and Curb Reimbursement – Reconstructing the drive apron and curb in the right of way
to meet City code.
Building Improvements Reimbursement – Building renovations include replacing the HVAC system,
replacing interior and exterior concrete and masonry that is beyond repair, replacing part of the fire
protection piping for the system, updating the plumbing fixtures and equipment, and ensuring the
electrical service meets the needs of the business.
Development-Wide Stormwater Reimbursement – The required stormwater management facility for
the entire Aviation Plaza site will be located on the Mineshaft property due to the topography of the
site. Funds may be reimbursed for constructing a stormwater management facility that provides the
quality and quantity stormwater requirements that Extreme Customs, Rogan’s, and the Mineshaft are
required to provide per City and State code.
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 20 July 2, 2019
SECTION 10:
Economic Feasibility Study, Financing Methods, and the
Time When Costs or Monetary Obligations Related are to
be Incurred
This Section includes a forecast of the valuation increases expected within the District, the associated tax
increment collections, a summary of how Project Costs would be financed, and a projected cash flow
demonstrating that the District is economically feasible.
Key Assumptions
The Project Costs the City plans to make are expected to create $12.4 million in incremental value by
January 1, 2021. The development Project estimated valuations and timing are included in Table 1.
Assuming the City’s current equalized TID Interim tax rate of $25.11 per thousand of equalized value,
and no economic appreciation or depreciation, the Project would generate $8,307,870 in incremental tax
revenue over the 27-year term of the District as shown in Table 2.
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 21 July 2, 2019
Base Value of
Improvements2 Mineshaft Extreme Customs Rogan's Annual Total
1 2019 (3,097,579)5,500,000 4,300,000 1,750,000 8,452,421 2019 1
2 2020 3,950,000 3,950,000 2020 2
3 2021 0 2021 3
4 2022 0 2022 4
5 2023 0 2023 5
6 2024 0 2024 6
7 2025 0 2025 7
8 2026 0 2026 8
9 2027 0 2027 9
10 2028 0 2028 10
11 2029 0 2029 11
12 2030 0 2030 12
13 2031 0 2031 13
14 2032 0 2032 14
15 2033 0 2033 15
16 2034 0 2034 16
17 2035 0 2035 17
18 2036 0 2036 18
19 2037 0 2037 19
20 2038 0 2038 20
21 2039 0 2039 21
22 2040 0 2040 22
23 2041 0 2041 23
24 2042 0 2042 24
25 2043 0 2043 25
26 2044 0 2044 26
27 2045 0 2045 27
Totals (3,097,579)9,450,000 4,300,000 1,750,000 12,402,421
Notes:
1Estimate of valuation increase within District resulting from construction of restaurant building and renovations to be made to existing commercial
1building. Assumptions as to value and timing taken from information received from Developer dated 6‐6‐2019.
2Reflects existing valuation of land and improvements within the District as of January 1, 2019. This value is subtracted to calculate the projected
2incremental value. (The numbers shown to the right of this column reflect total value).
City of Oshkosh
Tax Increment District No. 37
Development Assumptions1
Construction Year Construction Year
Table 1 – Development Assumptions
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TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 22 July 2, 2019
Type of District Base Value 6,787,767
District Creation Date Appreciation Factor 0.00%
Valuation Date Jan 1, 2019 Base Tax Rate $25.11
Max Life (Years) Rate Adjustment Factor
Expenditure Period/Termination 22 7/23/2041
Revenue Periods/Final Year 27 2047
Extension Eligibility/Years Yes 3 Tax Exempt Discount Rate 0.00%
Recipient District Taxable Discount Rate 0.00%
Construction
Year Value Added Valuation Year
Inflation
Increment
Total
Increment Revenue Year Tax Rate1 Tax Increment
1 2019 8,452,421 2020 0 8,452,421 2021 $25.11 212,204
2 2020 3,950,000 2021 0 12,402,421 2022 $25.11 311,372
3 2021 0 2022 0 12,402,421 2023 $25.11 311,372
4 2022 0 2023 0 12,402,421 2024 $25.11 311,372
5 2023 0 2024 0 12,402,421 2025 $25.11 311,372
6 2024 0 2025 0 12,402,421 2026 $25.11 311,372
7 2025 0 2026 0 12,402,421 2027 $25.11 311,372
8 2026 0 2027 0 12,402,421 2028 $25.11 311,372
9 2027 0 2028 0 12,402,421 2029 $25.11 311,372
10 2028 0 2029 0 12,402,421 2030 $25.11 311,372
11 2029 0 2030 0 12,402,421 2031 $25.11 311,372
12 2030 0 2031 0 12,402,421 2032 $25.11 311,372
13 2031 0 2032 0 12,402,421 2033 $25.11 311,372
14 2032 0 2033 0 12,402,421 2034 $25.11 311,372
15 2033 0 2034 0 12,402,421 2035 $25.11 311,372
16 2034 0 2035 0 12,402,421 2036 $25.11 311,372
17 2035 0 2036 0 12,402,421 2037 $25.11 311,372
18 2036 0 2037 0 12,402,421 2038 $25.11 311,372
19 2037 0 2038 0 12,402,421 2039 $25.11 311,372
20 2038 0 2039 0 12,402,421 2040 $25.11 311,372
21 2039 0 2040 0 12,402,421 2041 $25.11 311,372
22 2040 0 2041 0 12,402,421 2042 $25.11 311,372
23 2041 0 2042 0 12,402,421 2043 $25.11 311,372
24 2042 0 2043 0 12,402,421 2044 $25.11 311,372
25 2043 0 2044 0 12,402,421 2045 $25.11 311,372
26 2044 0 2045 0 12,402,421 2046 $25.11 311,372
27 2045 0 2046 0 12,402,421 2047 $25.11 311,372
Totals 12,402,421 0 Future Value of Increment 8,307,870
Notes:
1Tax rate shown is actual rate for 2018/19 levy taken from DOR Form PC-202 (Tax Increment Collection Worksheet).
27
Yes
City of Oshkosh
Tax Increment District No. 37
Tax Increment Projection Worksheet
Blighted Area
July 23, 2019
Table 2 – Tax Increment Projection Worksheet
_____________________________________________________________________________________________
TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 23 July 2, 2019
Financing and Implementation
Expected District Project Costs consist of development incentives in an estimated amount of $1.89
million, $2.75 million for additional public infrastructure improvements and an estimated $200,000 in
District administrative expense. Project Costs will be paid from tax increment as it is received, and the
City’s obligation to make development incentive payments will be limited to tax increment generated by
the Project and subject to annual appropriation. The City will advance funds as needed to pay District
administrative expenses prior to the availability of tax increments. To the extent public infrastructure
improvements are required prior to the availability of tax increment to cash fund them, the City may
advance funds to the District, or may issue debt to finance the costs.
Based on the cash flow exhibit (Table 3), the City anticipates that the District will generate enough tax
increment to pay all Project Costs by the year 2036, reflecting 16 years of tax increment collections, and
18 years of total elapsed time. A total of 7 years of tax increment collections would be needed to repay
the development incentive amount included in the Plan, with the remaining years funding potential City
infrastructure projects. If necessary, the District would be permitted to remain open for up to 29 years,
allowing for up to a total of 27 years of tax increment collection. The projected early closure is based on
the various assumptions noted in this Plan and will vary dependent on actual Project Costs incurred and
the actual amount of tax increments collected.
_________________________________________________________________________________________________________________________________
TID No. 36 Project Plan City of Oshkosh
Prepared by Ehlers Page 24 June 12, 2019
Cash Flow
City of Oshkosh
Tax Increment District No. 37
Cash Flow Projection
Year 1,709,540
Principal Int. Rate Interest Year
2019 0 15,000 15,000 (15,000) (15,000)2019
2020 0 5,000 5,000 (5,000) (20,000)2020
2021 212,204 212,204 5,100 5,100 207,104 187,104 1,709,540 2021
2022 311,372 311,372 235,359 2.625% 44,875 5,202 285,437 25,935 213,039 1,474,181 2022
2023 311,372 311,372 241,537 2.625% 38,697 5,306 285,541 25,831 238,870 1,232,643 2023
2024 311,372 311,372 247,878 2.625% 32,357 5,412 285,647 25,725 264,595 984,766 2024
2025 311,372 311,372 254,384 2.625% 25,850 5,520 285,755 25,617 290,212 730,381 2025
2026 311,372 311,372 261,062 2.625% 19,173 5,631 285,865 25,506 315,719 469,319 2026
2027 311,372 311,372 267,915 2.625% 12,320 5,743 285,978 25,394 341,112 201,404 2027
2028 311,372 311,372 201,404 2.625% 5,287 300,000 5,858 512,549 (201,178)139,935 0 2028
2029 311,372 311,372 300,000 5,975 305,975 5,396 145,331 0 2029
2030 311,372 311,372 300,000 6,095 306,095 5,277 150,608 0 2030
2031 311,372 311,372 300,000 6,217 306,217 5,155 155,763 0 2031
2032 311,372 311,372 300,000 6,341 306,341 5,031 160,793 0 2032
2033 311,372 311,372 300,000 6,468 306,468 4,904 165,697 0 2033
2034 311,372 311,372 300,000 6,597 306,597 4,774 170,471 0 2034
2035 311,372 311,372 300,000 6,729 306,729 4,642 175,114 0 2035
2036 311,372 311,372 350,000 6,864 356,864 (45,492) 129,622 0 2036
2037 311,372 311,372 7,001 7,001 304,371 433,992 0 2037
2038 311,372 311,372 7,141 7,141 304,231 738,223 0 2038
2039 311,372 311,372 7,284 7,284 304,088 1,042,310 0 2039
2040 311,372 311,372 7,430 7,430 303,942 1,346,252 0 2040
2041 311,372 311,372 7,578 7,578 303,793 1,650,046 0 2041
2042 311,372 311,372 7,730 7,730 303,642 1,953,688 0 2042
2043 311,372 311,372 7,884 7,884 303,487 2,257,175 0 2043
2044 311,372 311,372 8,042 8,042 303,330 2,560,505 0 2044
2045 311,372 311,372 8,203 8,203 303,169 2,863,673 0 2045
2046 311,372 311,372 8,367 8,367 303,005 3,166,678 0 2046
2047 311,372 311,372 0 8,534 8,534 302,837 3,469,515 0 2047
Total 8,307,870 8,307,870 1,709,540 178,559 2,750,000 200,256 4,838,355 Total
Notes:
1Assumes allocation of 90% of increment to MRO payment. Incentive amounts, payment percentages and term shown for purposes of es tablishing
1economic feasibility only. The City has not agreed to terms or conditions with the proposed Developer as to any public participation in the project.
Projected TID Closure
TIF Admin.
Total
Expenditures Annual Cumulative
MRO Principal
Outstanding
Balances
Municipal Revenue Obligation (MRO)1
Tax Increments Total Revenues
Projected Revenues Projected Expenditures
Public
Infrastructure
Table 3
_____________________________________________________________________________________________
TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 25 July 2, 2019
SECTION 11:
Annexed Property
A tax incremental district cannot include annexed territory unless at least three years have elapsed since
the annexation, or certain other requirements are met. None of the property within the proposed District
boundary was annexed during the past three years.
SECTION 12:
Estimate of Property to be Devoted to Retail Business
Pursuant to Wis. Stat. § 66.1105(5)(b), the City estimates that 75% 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’s current zoning ordinances. Individual
properties may require rezoning at the time of development.
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’s Comprehensive Plan identifying the area as
appropriate for commercial land uses. Development within the District will be required to conform to
State Building Codes and will be subject to the City's permitting and inspection procedures. The proposed
Plan conforms to all relevant State and local ordinances, plans, and codes. No changes to the existing
regulations are proposed or needed.
SECTION 15:
Relocation
Implementation of this Plan will not require relocation of individuals or business operations. Should
implementation of this Plan require relocation of individuals or business operations, relocations will be
handled in compliance with Wis. Stat. Chapter 32 and Wis. Admin. Code ADM 92.
_____________________________________________________________________________________________
TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 26 July 2, 2019
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 through elimination of blight and the provision of appropriate financial
incentives that will create opportunities for mixed use development. Through use of tax increment
financing, the City can attract new investment that results in increased tax base. Development will occur
in an orderly fashion in accordance with approved plans so that the Projects will be compatible with
adjacent land uses. Development of new uses in the District will add to the tax base and will generate
positive secondary impacts in the community such as increased employment opportunities and space to
accommodate retail and service businesses that will support residents and workers in the area.
SECTION 17:
List of Estimated Non-Project Costs
Non-project costs are public works projects which only partly benefit the District. Costs incurred that do
not benefit the District may not be paid with tax increments. Examples of non-project costs are:
A public improvement made within the District that also benefits property outside the District.
That portion of the total Project Costs allocable to properties outside of the District would be a
non-project cost.
A public improvement made outside the District that only partially benefits property within the
District. That portion of the total Project Costs allocable to properties outside of the District
would be a non-project cost.
Projects undertaken within the District as part of the implementation of this Project Plan, the costs
of which are paid fully or in part by impact fees, grants, special assessments, or revenues other
than tax increments.
At present, the City has not identified any non-project costs other than those costs expected to be paid
from the WEDC Idle Sites grant which are not included within this Plan. To the extent: 1) improvements
are made within the District that benefit property outside the District; or 2) improvements are made
outside the District that will only partially benefit the District; the City will apportion those costs based on
a reasonable allocation of the benefit. The costs related to benefit received by properties outside the
District are non-project costs.
_____________________________________________________________________________________________
TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 27 July 2, 2019
SECTION 18:
Opinion of Attorney for the City of Oshkosh Advising
Whether the Plan is Complete and Complies with
Wisconsin Statutes 66.1105
_____________________________________________________________________________________________
TID No. 37 Project Plan City of Oshkosh
Prepared by Ehlers Page 28 July 2, 2019
DOR Form PC-202 2018/19 Percentage
Winnebago County 749,693 20.22%
City of Oshkosh 1,482,441 39.98%
Oshkosh Area School District 1,320,217 35.60%
Fox Valley Techncial College 156,024 4.21%
Revenue Year
Winnebago
County City of Oshkosh
Oshkosh Area
School District
Fox Valley
Techncial
College Total Revenue Year
2021 42,900 84,830 75,547 8,928 212,204 2021
2022 62,948 124,472 110,851 13,100 311,372 2022
2023 62,948 124,472 110,851 13,100 311,372 2023
2024 62,948 124,472 110,851 13,100 311,372 2024
2025 62,948 124,472 110,851 13,100 311,372 2025
2026 62,948 124,472 110,851 13,100 311,372 2026
2027 62,948 124,472 110,851 13,100 311,372 2027
2028 62,948 124,472 110,851 13,100 311,372 2028
2029 62,948 124,472 110,851 13,100 311,372 2029
2030 62,948 124,472 110,851 13,100 311,372 2030
2031 62,948 124,472 110,851 13,100 311,372 2031
2032 62,948 124,472 110,851 13,100 311,372 2032
2033 62,948 124,472 110,851 13,100 311,372 2033
2034 62,948 124,472 110,851 13,100 311,372 2034
2035 62,948 124,472 110,851 13,100 311,372 2035
2036 62,948 124,472 110,851 13,100 311,372 2036
2037 62,948 124,472 110,851 13,100 311,372 2037
2038 62,948 124,472 110,851 13,100 311,372 2038
2039 62,948 124,472 110,851 13,100 311,372 2039
2040 62,948 124,472 110,851 13,100 311,372 2040
2041 62,948 124,472 110,851 13,100 311,372 2041
2042 62,948 124,472 110,851 13,100 311,372 2042
2043 62,948 124,472 110,851 13,100 311,372 2043
2044 62,948 124,472 110,851 13,100 311,372 2044
2045 62,948 124,472 110,851 13,100 311,372 2045
2046 62,948 124,472 110,851 13,100 311,372 2046
2047 62,948 124,472 110,851 13,100 311,372 2047
Total 1,679,537 3,321,112 2,957,681 349,541 8,307,870
Notes:
1The projection shown above is provided to meet the requirements of Wis. Stat. § 66.1105(4)(i)4.
Estimated Portion of Taxes that Owners of Taxable Property in Each Taxing Jurisdiction
Overlaying District Would Pay by Jurisdiction1
Exhibit A:
Calculation of the Share of Projected Tax Increments
Estimated to be Paid by the Owners of Property in the
Overlying Taxing Jurisdictions
TIF APPLICATION
Page 29
Page 30
Page 31
Page 32
Page 33
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Page 42
APPENDIX B
MINESHAFT OSHKOSH INVESTMENT ANALYSIS | 1
MINESHAFT OSHKOSH
MARKET STUDY and
INVESTMENT ANALYSIS REPORT
April 26, 2019
Prepared Exclusively For:
Thomas Masters
Master s Oshkosh LLC
Prepared By:
Timothy M Hess, PhD
Invista Analytics, LLC
member of
(Updated June 25, 2019)
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2 | INVISTA-ANALYTICS.COM
CONTENTS:
Introduction / Objective .........................................................................1
Market Study .........................................................................................2
Methods and Data............................................................................. 2
Results .............................................................................................. 3
Overall Investment Analysis ................................................................3
Budget and Funding ........................................................................3
TIF Payment Schedule...................................................................... 4
Operational Proforma ....................................................................6
Business Valuation on Reversion .................................................. 8
Return On Investment ..................................................................... 9
Page 44
MINESHAFT OSHKOSH INVESTMENT ANALYSIS | 1
INTRODUCTION / OBJECTIVE
Invista Analytics, LLC (IA) has been engaged to conduct a market study and investment analy-
sis for a proposed Mineshaft restaurant and family entertainment facility to be constructed with-
in the Aviation Plaza Center in Oshkosh, WI. The Mineshaft restaurant, under the ownership
of Thomas Masters, is a 25,000 square foot facility located in the downtown of Hartford, WI.
This facility offers approximately 14,400 square feet of restaurant and dining space, along with
approximately 5,500 square feet of game room and entertainment space and serves roughly
8,000 - 10,000 guests per week.
Mr. Masters is proposing to open a second mineshaft location within the Aviation Plaza center.
This new facility, will be approximately 35,600 square feet, with roughly half of the space dedi-
cated to the dining and food service operations, and the other half dedicated to the game room
and entertainment space.
Plans call for the new facility to be located on the old Walmart site that was vacated in 2003.
Mr. Masters presently owns the site. However, the development of this site, has a fair number
of hindrances to include issues with storm water management, unstable soils, and non-con-
forming water and sewer laterals that are shared with neighboring parcels. In addition to the
site conditions, the financing for this project also poses some unique challenges. Total estimat-
ed investment needed to complete the project is $16.25 million. While the facility in Hartford
has a long history, obtaining financing for a new endeavor in a new market makes it such that
financial institutions are hesitant to borrow anything more that $8 million. This makes any addi-
tional site costs especially burdensome requiring the investment team to bring in a 50% equity
position.
Given the extraordinary costs associated with this site, Mr. Masters, along with the neighboring
parcel owners, have approached the City of Oshkosh about the possibility of utilizing Tax Incre-
ment Financing to make the redevelopment feasible. While the location of the proposed district
is outside the city’s intended TIF focus of downtown and/or central city, staff has acknowledged
the existence of the extraordinary site conditions and noted that the redevelopment of this site
accomplishes a specific goal in the City Center Corridors Plan1. In addition, the department
of public works has requested that the stormwater plan address more capacity than might
be required of the Aviation Plaza site alone in an effort to aid in the overall Stringham Creek
watershed management. City staff invited the development team to present these findings to
the Oshkosh Common Council on February 12, 2019. At this public meeting members of the
council suggested that they would be willing to accept and review a formal TIF application for
consideration.
Given this ask for financial assistance, Invista Analytics has conducted significant quantitative
market research to determine the likely potential increment generated through a bayesian
transitional market factor analysis study. We then document the anticipated costs of the project
and potential increment generated. A discounted cash flow analysis is conducted to determine
a probable valuation of the business. Finally, return on investment metrics were calculated on
the with TIF and without TIF investment scenarios.
1. https://www.ci.oshkosh.wi.us/PlanningServices/Documents/DRAFTOshkoshCorridorsHQ.pdf page 29, accessed April 1, 2019
Figure 1 - Overhead view of site and rendering of front entryway to proposed Mineshaft facility.
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2 | INVISTA-ANALYTICS.COM
MARKET STUDY SUMMARY
To determine the likely potential income to be generated by the proposed entertainment facility
we employed a bayesian transitional market factor analysis. The idea of this approach is to
utilize the market factors of both an existing location and the new location to predict the likely
impact of bringing a commercial operation into a new market. In this case, the original Mine-
shaft location in Hartford appears to have achieved maturity as evidenced by its fairly stabilized
revenue stream. Specifically over the past three years revenue growth has averaged 1.3%.
Thus applying this method, we anticipate finding the stabilized revenue of the new facility.
Methods and Data
To conduct the analysis Invista Analytics first acquired a relative performance index (RPI) data
set from FRANdata. The RPI is a semi-blinded metric in that the interpretation of each value is
the relative performance of each location relative to the performance of the average location.
The description of the franchise from which the data was sampled is as follows:
The data set included 66 locations across 32 states. One of the locations contained in the data
set subsequently closed. Thus for the 65 remaining locations, IA staff collected the following
market factor variables.
Exponentiated Probability 50 Mile Population: For each location, concentric rings with 10 mile
radii were determined. Esri data was then used to determine the population within each ring.
These populations were then weighted using an exponential density function. This method
reflects the likelihood that potential customers are more likely to visit the closer they live and/or
work to a commercial enterprise. Figure 2 shows the concentric rings applied to the Oshkosh
and Hartford locations with shading representing the exponential weights.
Relative Retail Ranking: For each location, IA staff contacted either a community development
staff member of the municipality or the local economic development entity and asked them to
rate the location relative to other retail locations within their respective geographic regions on
a scale of 1 to 10, with 1 being the lowest or least desirable retail location, and 10 being the
highest or most desirable retail location.
Facility Size: Satelite imagery using Google Maps and/or Bing Maps with respective scales
were used to ascertain approximate facility footprint. Google street view, or Bing’s Bird’s Eye
views were used to determine if a facility might in fact have more than one floor, or if the facility
was co-located in a strip mall or other multi-tenant facility. In these cases, IA staff
Figure 2 - Concentric 10 mile radius rings around existing Mineshaft location and proposed location in Aviation Plaza.
42.5
43.0
43.5
44.0
44.5
−90 −89 −88 −87
lon
la
t
Exponential Weighting
Radius Weight
0 - 10 mi 0.6076
10 - 20 mi 0.2421
20 - 30 mi 0.0965
30 - 40 mi 0.0385
40 - 50 mi 0.0153
“National high-volume entertainment and dining venues offering customers fun upbeat
atmosphere with interactive video and gaming options for families while serving high quality
food and beverages”
Page 46
MINESHAFT OSHKOSH INVESTMENT ANALYSIS | 3
conducted a brief phone interview with facility staff to ascertain approximate size of the facility.
In one case, the facility had apparently been closed since the RPI data set was assembled.
This record was thus dropped from the analysis data set.
Indirect/Direct Competitor Count (3 mile radius): The Google search engine was employed
using the search term “restaurants near <address>”. Data was sorted by distance and a count
of the number of restaurants within 3 miles was recorded. Staff reviewed the list and identified
any facility that appeared to market substantial entertainment offerings that might include a
substantial gaming component. These facilities were recorded as direct competitors, while the
remaining restaurants were recorded as indirect competitors.
A subset of four facilities were randomly selected from the 65 usable records in the RPI data-
set. Two different staff members reviewed all 98 total restaurants located within 3 miles using
the Google search results and independently rated each facility as either a direct or indirect
competitor. We found an inter-rater reliability of 99% finding agreement on all but one facility.
We then used a bayesian quantile regression analysis to predict the log of the RPI metric given
the market factor variables utilizing the bayesQR library2 in the R statistical computing envi-
ronment version 3.5.3. Our model allowed for up to 3 way interactions. The pior mean vector
of parameters were all set to zero. We employed 1,000 burn-in iterations and 10,000 MCMC
runs. The expected value of the posterior distributions of the model parameters were then used
along with the market factor data from both the Hartford and Oshkosh locations to predict the
RPI for each location.
Results
The resultant predicted RPI values were 1.131 for the Hartford facility and 1.942 for the
Oshkosh facility. Given the Hartford location had a total revenue of $6.061 million dollars, the
bayesian estimation would suggest the Oshkosh location would achieve $10.407 million dollars
in revenue after maturity and achieving full market penetration. To assess the potential range
of variability of potential revenue, we conducted 1,000 simulations bootstrapping the RPI data
locations with replacement. For each simulation we proceeded as before with the bayesian
quantile estimation only using 100 burn-in iterations and 1,000 MCMC runs. A 95% prediction
interval for the revenue ranged from $7.25 million dollars up to $13.22 million dollars.
For context, the average revenue per store for Dave and Buster’s Entertainment this past
year reported in their April 2, 2019 annual report to the SEC was $10.457 million3 whereas the
average for a Chuck E Cheese franchise location was $1.167 million4. Additionally, underwrit-
ers with a local bank independently arrived at revenue threshold intervals of $8, $10, and $12
million when considering potentially financing the project5.
OVERALL INVESTMENT ANALYSIS
Budget and Funding
We first consider the detailed budget and sources of income. The table on the next page lists
all expected expenses. Specifically we have identified $1,934,994 total expenses related to site
improvement costs including storm water management with additional capacity requested by
the city’s department of public works, water and sewer laterals, costs associated with poor soil
conditions, and curb and gutter and driveway aprons. The total development costs identified
surpass $16.1 million.
On the funding side, we note that the proposed project brings its own unique challenges. While
several financial institutions have committed to financing the project, all of them have set their
limits at approximately $8 million. At present, BMO Harris bank has committed to financing $8
million during the construction phase so long as WBD commits to financing $4 million through
the SBA 504 program upon completion of the project leaving each with $4 million in loan com-
mitments. Several bankers have noted that this is likely one of the largest, privately financed
new market restaurant/entertainment facilities being opened in Wisconsin. Given this limitation
in financing, the extra site improvement costs become especially cumbersome.
2. D Benoit, D Van den Poel ‘bayesQR: A Bayesian Approach to Quantile Regression’ J. Stat Software 76 (7), 2017
3. http://ir.daveandbusters.com/annual-reports Annual Report dated April 2,2019 page 31. Accessed April 18, 2019
4. https://cecentertainment.gcs-web.com/sec-filings Annual Report dated April 8, 2019 page 25. Accessed April 18, 2019
5. Personal conversation with loan officer on April 19, 2019
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4 | INVISTA-ANALYTICS.COM
The investment team is contributing the land and the development fee as equity. Further, the
city has applied for an Idle Sites Grant through the Wisconsin Economic Development Cor-
porationration to help offset the site improvement costs across the entire aviation plaza site.
While the total grant award might be $500,000, the three individual owners have agreed to al-
locate the proceeds roughly in proportion to the amount of eligible costs each owner will have.
The Mineshaft team anticipates $210,086 in proceeds from the WEDC grant.
The development team anticipated bringing roughly $3 million in cash to the project. The devel-
oper is seeking $1.124 million in development assistance, of which the details of payback will
be discussed in the next section.
TIF Payment Schedule
Invista staff has met with the city assessor on several occations to discuss the present and
future assessed values of the proposed Minshaft and other Aviation Plaza parcels. The base
assessed value of the site as it sits today is $2,275,000. The new building is likely to add an
additional $201.50 of value per square foot. At 35,600 square feet, we anticipate that the over-
all site assessment will increase $7.175 million to a total assessed value of $9,450,000.
The development incentive payback schedule appears on the following page. We anticipate
that approximately $3.225 million of increment will be added to the site by January 1, 2020,
Amount Notes
Acquisition & Site Prep
Land Acquisition 3,250,000
Subtotal $3,250,000
Soft Costs/Fees
Developer Fee (5%)610,348
Appraisal 5,000
Professional Services 32,000
Insurance 6,000 Construction Insurance
Building Permit In Keller Bid
Mortgage Fees 30,000 BMO & WBD Fees
Construction Interest 134,167 10 Build - loan @ 4.75 for 6 mo
Marketing 35,000
Real Estate Taxes 56,193 Jan-20
Contingency 140,000
Subtotal $1,048,707
Hard Costs
Building 8,238,760 Keller ($1,934,994 site/TIF Eligible)
Kitchen Equipment 750,000 Edward Don
Bar Equip / Dishes 100,000
Furniture 400,000
Electronics/Networking/AV 112,000
Start up Inventory 200,000
Decorating 150,000
Signage 300,000
Gaming Equipment 1,700,805 Drouillard Int Sales
Subtotal $11,951,565
Total Project Costs $16,250,272
Source of Funding
Permanent Financing 8,000,000 BMO & WBD
Land & Equity 3,860,348
WEDC Idle Sites Grant 210,086
TIF Monetization 1,124,478
Other Cash Funds 3,055,360 (cash from developers)
Total Source of Funds 16,250,272
Detailed Project Budget
Page 48
MINESHAFT OSHKOSH INVESTMENT ANALYSIS | 5
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while the full project will be completed by April 2020 such that the full increment will be as-
sessed January 1, 2021.
Page 49
6 | INVISTA-ANALYTICS.COM
We calculate the increment available to pay back the note as 90% of the increment generated.
Further, we allocate $4,000 annually for the city for administrative expenses. The remaining
increment we propose be allocated to the Rogan’s TIF payback (labeled as ‘Inc to Rogans’ in
table). Assuming a 5.25% interest rate on the municipal revenue obligation note, we find the
increment generated is sufficient to pay back the note in 10 years.
Operational Proforma
The operational proforma, both with and without TIF assistance can be found on the following
two pages. As noted previously, the estimation method predicted an ‘as stabilized’ revenue of
the new location of $10,407,000. We anticipate this taking 3 years to achieve full market pene-
tration. We anticipate 70% of the full revenue in year 1 and 90% in year 2. We used the relative
proportion of revenues seen in the Hartford facility, that being food and beverage accounting
for 75% of the total revenue while the game room comprising approximately 25% of revenue.
After year 3 we assume a 1.3% annual increase in revenues as seen in the Hartford facility.
For cost of goods sold we used the ratio of cost to revenue found at the Hartford facility. We
note the food and beverage cost are slightly higher than industry averages. This is consistent,
however, with the strategic plan to offer low priced food to bring customers in knowing that the
majority of profitability comes from the gaming operations.
The operating expenses were estimated from actual bids, direct calculations with known rates,
or approximate estimates based off of expenses realized at the Hartford location. One expense
that might be materially different is the advertising expense. Mr Masters has expressed the de-
sire to substantially increase the marketing budget for the new operation in an effort to achieve
market penetration and stabilization. To achieve this, the new operation is proposing a budget
of $400K annually, which is 3.8% of revenue. While this is a meaningful increase from the
3.3% presently spent at the Hartford location, in part this can be attributed to the fact that the
operation has already achieved market penetration and maturity. For comparison, Dave and
Busters reports a 3.2% expenditure6 while Chuck E Cheese reports advertising expenditures of
5.3% of revenue7.
The City of Oshkosh TIF policy and application suggests that in the case of Owner-Occupied
Commercial projects that the analysis of financial need be based on the company’s minimum
threshold needed. Through further discussions with city staff, it was determined that this
benchmark is rather arbitrary. Rather we will attempt to frame the need based on a 10-year
Internal Rate of Return (IRR). In the case of residential or commercial development where the
intended approach is to lease out the project, the IRR accurately reflects the return on the pas-
sive investment. In this case, given the owner intends to operate an active business, the IRR
calculation will reflect both the return on the initial investment of money to start the business,
but also the return on the owner’s efforts to operate the business. One approach to accurately
reflect just the return on initial investment is to agree upon a compensation for the owner’s
efforts in operating the business. Proceeding forward, we will count this as an expense to the
business for the IRR calculation. We anticipate Mr Masters, and his partner, William Masters,
each spend roughly 75% effort, or 1.5 total FTE operating this new endeavor. In return, they
will be paid 1.7% of the total revenue as a salary. The first year this would work out to a total
annual 1.0 FTE salary of $82,562 and increasing to $117,946 by year 3 once the operation has
achieved operational maturity.
In general, unless based off a direct calculation, it is assumed that operational expenses will in-
crease by 1% annually. Note year 5 we anticipate an additional expense in accounting to assist
in the likely look-back clause we anticipate to be included in the development agreement with
the city.
We assume the primary financing will be subject to a 5.25% interest rate amortized over 20
years. Further, our experience with lending institutions is that they prefer an amortization
schedule to start immediately upon delivery of the TIF note funds despite the likelihood that the
TIF district not produce any increment till year two or later. Thus for the TIF monetization we
assume a straight 10 year amortization again with a 5.25% interest rate.
6. http://ir.daveandbusters.com/annual-reports Annual Report dated April 2,2019 page 9. Accessed April 18, 2019
7. https://cecentertainment.gcs-web.com/sec-filings Annual Report dated April 8, 2019 page 33. Accessed April 18, 2019
Page 50
MINESHAFT OSHKOSH INVESTMENT ANALYSIS | 7
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Li
q
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Ga
m
e
R
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Ga
m
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R
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L
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(
1
4
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1
%
G
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$2
5
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7
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3
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0
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1
6
2
$3
6
6
,
8
4
7
$3
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3
,
0
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3
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7
9
,
4
2
6
$3
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5
,
8
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6
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,
4
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1
0
7
$4
0
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C
A
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m
p
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5
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3
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9
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8
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1
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8
0
8
Ma
i
n
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e
n
a
n
c
e
&
R
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p
a
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r
s
-
G
a
m
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R
o
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m
$1
5
6
,
0
0
0
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5
7
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5
6
0
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5
9
,
1
3
6
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p
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5
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1
De
b
t
S
e
r
v
i
c
e
(
2
0
y
r
@
5
.
2
5
%
)
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4
6
,
8
9
0
$6
4
6
,
8
9
0
$6
4
6
,
8
9
0
$6
4
6
,
8
9
0
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4
6
,
8
9
0
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4
6
,
8
9
0
$6
4
6
,
8
9
0
$6
4
6
,
8
9
0
$6
4
6
,
8
9
0
$6
4
6
,
8
9
0
$6
4
6
,
8
9
0
TI
F
R
e
c
a
p
t
u
r
e
-$
7
2
,
8
7
0
-$
1
6
2
,
1
2
2
-$
1
6
2
,
1
2
2
-$
1
6
2
,
1
2
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-$
1
6
2
,
1
2
2
-$
1
6
2
,
1
2
2
-$
1
6
2
,
1
2
2
-$
1
6
2
,
1
2
2
-$
1
6
2
,
1
2
2
-$
1
5
7
,
2
3
9
TI
F
N
o
t
e
D
e
b
t
S
e
r
v
i
c
e
(
1
0
y
r
@
5
.
2
5
%
)
$1
4
4
,
7
8
0
$1
4
4
,
7
8
0
$1
4
4
,
7
8
0
$1
4
4
,
7
8
0
$1
4
4
,
7
8
0
$1
4
4
,
7
8
0
$1
4
4
,
7
8
0
$1
4
4
,
7
8
0
$1
4
4
,
7
8
0
$1
4
4
,
7
8
0
For the without TIF scenario the only change is that TIF recapture and TIF note debt service is
removed from the bottom two lines.
The net cash flow upon stabilization at year 3 start is roughly $921K and $903K in the TIF and
without TIF scenarios respectively, and increase steadily to roughly $1,178K and $1,155K by
year 10. During the subsequent years the difference between the 2 projections is roughly $17K
that results from the disparity in how the bank finances the TIF note verses how it is likely paid
out through the TIF funding mechanism.
Page 51
8 | INVISTA-ANALYTICS.COM
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Business Valuation on Reversion
In order to calculate the Internal Rate of Return (IRR) we first need to calculate an assumed
reversion at the end of year ten. We performed a 6 year discounted cash flow method with a 20
year residual valuation. It is typical when conducting a valuation on a business to do so based
off of projected future revenues after income taxes. Thus we adjust the net operating income
from year 11 to include depreciation and interest expenses so that an estimate of income taxes
can be calculated. We assume a straight line depreciation of 39 years on the building. The
technology, furniture, and food prep equipment have a 5 year depreciation and so will have
already been taken.
Page 52
MINESHAFT OSHKOSH INVESTMENT ANALYSIS | 9
Discounted Cash Flow Business Valuation
Growth Rate 2.2%2.2%2.2%2.2%2.2%
Net Operating Income $1,867,756 $1,908,847 $1,950,841 $1,993,760 $2,037,623 $2,082,450
Other Expenses
Depreciation and Amortization Expense (205,128)(205,128)(205,128)(205,128)(205,128)(205,128)
Interest Expense (254,426)(233,319)(211,076)(187,637)(162,938)(136,910)
(459,554)(438,447)(416,204)(392,765)(368,066)(342,038)
Pre-Tax Net Income 1,408,202 1,470,400 1,534,637 1,600,995 1,669,557 1,740,413
Income Taxes (21% Fed, 7.9% State)(406,970)(424,946)(443,510)(462,688)(482,502)(502,979)
After-Tax Net Income 1,001,232 1,045,454 1,091,127 1,138,307 1,187,055 1,237,433
Adjustments to Determine Cash Flow
Depreciation and Amortization Expense 205,128 205,128 205,128 205,128 205,128 205,128
Change in Debt 392,464 413,572 435,814 459,253 483,953 509,981
Net Cash Flow to Equity 1,598,824 1,664,154 1,732,070 1,802,689 1,876,136 1,952,542
Present value factor (@12.5%)0.8889 0.7901 0.7023 0.6243 0.5549 0.4933
Present Value Net Cash Flow $1,421,177 $1,314,887 $1,216,488 $1,125,410 $1,041,122 $963,131
Cash Flow 1,952,542
Sum of PV Net Cash Flows $7,082,215 CF Growth rate 4%
Residual Value $8,298,304 Direct Resid Factor (20 yr)4.25
We assume the new corporate tax rate of 21% for federal and 7.9% for state income taxes.
Typically, unless a company is publicly traded, the discount rate, or the return a prospective
buyer anticipates is likely to be within the 10 to 25% range. Starting at the minimum, of 10%
and then adding premiums for a small business and the risk associated with running a restau-
rant, a 12.5% Weighted Average Cost of Capital would seem to be a conservative estimate for
use resulting in possibly an over estimate of value. Proceeding across time, we use the growth
rate from year 10 to year 11 of 2.2% in NOI.
We employed a direct 20 year residual valuation using the 4% growth rate in net cash flow to
equity. The formula for the Direct Residual Factor at 20 years is given by
which resulted in a direct residual factor of 4.25. The sum of the present values of the cash
flows totaled $7,082,215, while the residual value totaled $8,298,304, resulting in a total indi-
cated value of $15,380,519.
Return on Investment
Assuming that the aviation plaza group is awarded the idle sites grant through the WEDC, and
that the city council and joint review board would approve the TIF incentive, the development
team would need to contribute in cash and equity $6,915,708 to finish the project. If TIF were
not used, the team would have to contribute $8,040,186.
There exists an approximately 20,000 square foot building on the parcel owned by the devel-
opment team that is split into two units. The team plans to use the 11,500 square foot space
to serve as a support facility for the Mineshaft operations. We assume that after the site gets
substantially redeveloped, the remaining 8,500 square foot unit could be partitioned and sold.
The assessor has valued the building at $800K as it sits today. We assume a sale with $500K
in proceeds at the end of year 1.
We assume a 5% commission on a business broker. Further, at the end of year 10, the $8 mil-
lion note would still have $5,024,390 left in principal to pay off. Thus after the sale the develop-
ment team would stand to get $9,587,103 in proceeds on the sale of the business. Including
𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷𝐷= �1.04𝑖𝑖𝑖𝑖1.125𝑖𝑖𝑖𝑖+6
Page 53
10 | INVISTA-ANALYTICS.COM
Return on Investment Metrics
-6,915,708 -6,915,708 -8,040,186 -8,040,186
Year 1 53,126 500,000 553,126 197,906 500,000 697,906
Year 2 640,840 640,840 712,750 712,750
Year 3 920,821 920,821 903,479 903,479
Year 4 954,993 954,993 937,651 937,651
Year 5 987,768 987,768 970,426 970,426
Year 6 1,025,158 1,025,158 1,007,816 1,007,816
Year 7 1,061,173 1,061,173 1,043,831 1,043,831
Year 8 1,097,823 1,097,823 1,080,481 1,080,481
Year 9 1,135,120 1,135,120 1,117,778 1,117,778
Year 10 1,173,074 9,587,103 10,760,177 1,155,732 9,587,103 10,742,835
Business Valuation 15,380,519 15,380,519
Broker Commission 769,026 769,026
Mortgage Payoff 5,024,390 5,024,390
Net Reversion 9,587,103 9,587,103
this amount in the year 10 reversion results in a 10 year internal rate of return of 14.69% with
the proposed TIF assistance, and 12.44% without TIF assistance.
Given the relatively high equity position required to complete this project in addition to the
overall risk associated with a restaurant and entertainment facility, it would seem reasonable
to require a rate of return higher than 12.44% in this case before proceeding with the proj-
ect. Maybe more importantly from the developers’ perspective than the rate of return, is the
lowering of the extreme amount of cash required to implement this project. Our opinion would
be that these two factors, in combination, are sufficient to make the ‘but for’ finding required for
TIF assistance.
Page 54
11 | INVISTA-ANALYTICS.COM
DISCLAIMER
The findings presented herein are based upon the information available and received at
the time this report was compiled. Invista Analytics (IA) has taken every possible precau-
tion to evaluate this information for its completeness, accuracy and reliability. To the best
of its knowledge, IA feels the information and conclusions presented herein are sound and
reliable.
It should also be understood that normal economic and marketplace conditions change con-
stantly. IA assumes no responsibility for information that becomes outdated once this report
is written; nor is it responsible for keeping this information current after June 25, 2019.
The results presented in this report are the professional opinion of IA and are based on the
information available at this time. These opinions infer proper and professional management
of the business operation. The opinions also infer that market conditions do not change the
information received upon which these opinions are based. IA assumes no responsibility for
changes in market conditions.
Furthermore, it is assumed that the reader of this report completely understands its contents,
assumptions and recommendations. If the reader does not fully understand the contents
contained herein, clarification should be sought from Invista Analytics.
Finally, IA assumes no responsibility should the management of the proposed business ven-
ture deviate from any recommendations that may have been provided in this report.
Any further questions about this report should be directed to IA.
Sincerely,
Timothy Hess, PhD
240 Algoma Blvd - Suite A
Oshkosh, WI 54901
920.203.2177
www.invista-analytics.com
Page 55
MINESHAFT OSHKOSH INVESTMENT ANALYSIS | 12
Page 56
__________________________________
Plan Commission Minutes July 2, 2019
PLAN COMMISSION MINUTES
July 2, 2019
PRESENT: Lynnsey Erickson, Thomas Fojtik, Michael Ford, Derek Groth, John Hinz, John
Kiefer, Justin Mitchell, Thomas Perry, Kathleen Propp
EXCUSED: Lori Palmeri
STAFF: Mark Lyons, Planning Services Manager; Justin Gierach, Engineering Division
Manager / City Engineer; Kelly Nieforth, Economic Development Services Manager;
Jeff Nau, Associate Planner; Brian Slusarek, Assistant Planner; Steven Wiley,
Assistant Planner; Mina Kuss, Recording Secretary
Chairperson Fojtik called the meeting to order at 4:00 pm. Roll call was taken and a quorum
declared present.
The minutes of June 18, 2019 were approved as presented. (Hinz/Kiefer)
VI. PUBLIC HEARING: PROPOSED CREATION OF TAX INCREMENT FINANCING
DISTRICT NO. 37 AVIATION PLAZA REDEVELOPMENT PROJECT; DESIGNATION
OF BOUNDARIES AND APPROVAL OF PROJECT PLAN
Site Inspections Report: Mr. Fojtik and Mr. Hinz reported visiting the site.
Staff report accepted as part of the record.
Tax Incremental District No. 37 (the “TID” or “District”) is a proposed 27 acre in need of
rehabilitation or conservation district located in the vicinity of the W. South Park Ave. and S.
Koeller Street and abutting Interstate 41. The proposed district is comprised of five parcels owned
by the applicants and contain approximately 117,000 sq. ft. of retail space with Rogan’s Shoes as
the only current occupant following the closure of the J.C. Penny Store in 2015. The former
Walmart store was demolished in 2007.
Mr. Lyons presented the item and discussed the purpose of the proposed TID creation. The City
anticipates making total expenditures of approximately $4.84 million to undertake project
identified in the Project Plan. Project costs include an estimated $1.89 million in “pay as you go”
development incentives (principal and interest), $2.75 million for additional public infrastructure
improvements and an estimated $200,000 in administrative costs. The City is projecting that new
land and improvements value of approximately $12.4 million will result from redevelopment
activity within the District. The “expected” improvements will occur on the five parcels located in
the district. The developers are proposing a mixture of commercial and office uses. The
developments are Extreme Customs, Mineshaft and Rogan’s Shoes. The developers are
anticipating being able to fully develop the district by sometime in 2020. The proposed Plan is in
Page 57
__________________________________
Plan Commission Minutes July 2, 2019
general conformance with the City of Oshkosh’s Comprehensive and the City Center Corridor
Plan for South Park Avenue.
Mr. Fojtik opened up technical questions to staff.
Mr. Hinz asked if the TIF would include any potential developments on the east side of the
property.
Mr. Lyons explained the TID does account for full reconstruction of the entire area. He said the
storm water and utilities are being accounted for if outlot development should take place. He said
the storm water management plan is already being sized to be able to accommodate that. He
stated they are trying to be forward thinking in this TID.
Mr. Fojtik asked Mr. Lyons to talk about the aviation component of the project and how it limits
developments.
Mr. Lyons showed the area of the Airport Zoning Overlay which covers most of the proposed area.
He explained the overlay does not permit anything that is deemed an assembly use (hotel,
restaurant, etc.).
Mr. Fojtik commented any place a plane may crash.
Mr. Lyons replied correct.
Mr. Mitchell said it states that part of the basis for the request is that city does not have funds
available to pay for the cost to rehabilitate the public infrastructure. He asked if the city did not
maintain or have a revenue source for updating its’ own public infrastructure.
Mr. Lyons explained the public infrastructure is on the private side. He said the Public Service
Commission (PSC) requires an independent waterline to each building.
Ms. Nieforth clarified the city’s water main is in the right-of-way. She reiterated that PSC requires
a private parcel owner to have a lateral off of the city’s water main to their site. She explained that
is where the city does not have funds, to connect off the water main into the site.
Mr. Mitchell said it states public infrastructure but it is really privately owned.
Todd Taves (Senior Municipal Advisor, Ehlers), said the site has been sitting idle for an extended
period of time. He explained the things that have to be done to allow for this site to develop is
costly and reconstructing always costs more. He stated it has been determined that to make the
project economically viable for the property owners/developers, using the TIF money to address
the site conditions that are in impairment is necessary for the site to move forward. He stated it is
a combination of the utility cost but also private and public costs in order to make the site
attractive.
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Plan Commission Minutes July 2, 2019
Mr. Ford asked for confirmation that the Mineshaft would cost $16 million but could only get $8
million from the bank. He asked if the Mineshaft would have to put up the rest of the money
themselves without the TIF district.
Ms. Nieforth said the city made an effort, applied for a WDC grant and was granted $500,000. She
said they are trying to lower the TIF assistance amount. She explained the applicants are asking
for TIF assistance for under ten years which is a goal that Council does have in the TIF policy. She
stated the applicants are trying to meet all the goals that Council has set forth.
Mr. Ford asked if there is any type of sensitivity analysis. He said just looking at the revenues,
they have a 10 million dollar stream with a range of $7 to $13 million. He said he is just curious if
there is anything the city looks at with what the impact would be if it were on the lower end of the
range.
Mr. Taves replied one of the techniques that the city has used is the concept of pay as you go. He
explained rather than the city fronting the money, the developers provide the money and would be
reimbursed. He said the impact if there was less value is that the developer would be reimbursed
for a longer time which would increase the life of the district. He said it would not cost the city to
be out any funds. He said the other thing it would do is to the extent that there are additional
infrastructure needs down the road, which is being shown as being cash funded out of the TID
after the reimbursements are made to the developer, it would either reduce or delay the ability of
the city to access those monies for those types of projects.
Mr. Ford said the main risk to him from a land use decision is that this is for a 35,000 sq. ft.
building they are funding via this TIF. He questioned what would happen if the business was not
successful.
Ms. Nieforth replied if the building went out of business in two years, the city would still have an
updated public infrastructure installed already, laterals installed to each site that would meet code
and a storm water facility that would help with the Stringham Creek watershed area. She said
there would still be some value to the site though it would not be at its fullest potential but the city
could still capture increment to fulfil TIF obligations.
Mr. Mitchell said it is his first time going through one of these. He said during his research, he
found that TIFs can create a shadow fund. He asked what kind of oversight does the city have and
who determines the distribution.
Mr. Taves replied when the city creates a Tax Increment District, it has to create a special fund
typically a special revenue fund. He explained more about the special revenue fund. He said the
city’s financial statements are audited annually to include those in the Tax Increment Districts. He
stated there is also a Joint Review Board involved in this process consisting of members from each
taxing jurisdictions. He said one of the requirements for the TIF statue is th at a report must be
filed annually with the Department of Revenue that accounts for all the revenues and
expenditures. The Joint Review Board also meets annually to review the reports for each of the
outstanding Tax Increment Districts of the city.
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Plan Commission Minutes July 2, 2019
Mr. Mitchell asked who outlines what the funds are used for.
Mr. Taves explained the plan is intended to be the framework for making expenditures but the fact
that it is in a Tax Increment District does not change what the Council would otherwise be
required to approve. He said all the expenditures go through the same process as any other city
expenditure.
Mr. Fojtik opened up the public hearing.
Jason White, 1204 Fairfax Street, said he is with GOEDC and sent a letter this afternoon. He stated
the letter confirms support of the TID. He explained how he got directly involved when he met
Tyler from Extreme Customs in 2018 and helped identify a new location for Extreme Customs. He
explained the process of planning and getting the approval through the city for the site. He
believes the TIF needs to go hand in hand with the developments. He said the costs Tyler would
incur to stay at the site with aging infrastructure is not possible for them to finance without the
TIF. He stated they do believe this does enhance the corridor and improves the city as a whole.
He reiterated this cannot happen without the Tax Increment District.
Tom Masters, 22 N. Main Street in Hartford, said he is the owner of the Mineshaft in Hartford and
also owns The Fox and Hound in the Holy Hill area. He wanted to address the viability of the
restaurant. He said he has been at the Mineshaft for 44 years. He stated they have never had a bad
year or a slow year. He explained it is not a bar or club and the entertainment area is a gaming
area. He stated he has been at the other restaurant for 17 years and both his restaurants are doing
really good.
Tim Hess, 2645 Templeton Place, said he was involved in some of the analytics portions. He said
the range of $7 to $13 million does mean there is substantial risks. He said they are trying to make
it so the developers do not have to bring in a huge amount of money which is hard to do when it is
this sort of facility. He pointed out the owners of the properties and a contractor are present to
answer any questions.
Mr. Fojtik closed the public hearing.
Motion by Kiefer to approve the project plan and recommending the boundaries to the council and
adopting the staff report as the findings.
Seconded by Perry.
Mr. Fojtik asked if there was any discussion about the motion.
Mr. Mitchell stated it lists there are 4.6 million dollars for public infrastructure overall. He asked
what percent of public infrastructure is being paid for by the city.
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Plan Commission Minutes July 2, 2019
Mr. Lyons replied the public infrastructure cost is $2.75 million which is public infrastructure cost
after development incentives have been paid to the developer.
Mr. Mitchell explained where he was adding his numbers from. He said he is trying to understand
the total infrastructure cost and how much the city is paying for.
Ms. Nieforth said it almost has to be broken up into two. She explained there are items the
developers have to do to get the development ready which will be in the cash flow sheet. She said
those costs will be taken care of at the beginning and then there are other cost the city has
identified such as certain public infrastructure cost that benefit the district. She explained the TIF
money can’t be used for other projects that would not benefit the district directly. She reiterated
the $2.75 million is the cost after the TIF assistance obligation is complete. She said they made sure
there are adequate funds for the Stringham Creek watershed issues and connecting the district to
other areas on the west side of 41.
Mr. Mitchell said his understanding is that financial support is very important in providing for
these public infrastructures just like in residential areas. He asked if the city is paying for all the
public infrastructure or if they are sharing the cost with the property owners.
Ms. Nieforth replied there are some costs that are identified on the site that are required to get the
site in compliance that the city did not include in the TIF plan. She said the owners will be
required to pay those costs. She reiterated this is a pay as you go and the developers would pay
for the cost up front. She stated there are costs that would be paid by the property owners that
would not be TIF funded.
Mr. Mitchell asked for a rough estimate of percentage the city is paying for regarding the public
infrastructure.
Ms. Nieforth said without looking at the numbers that they did not include in the TIF plan, she
would not feel comfortable giving a percentage. She stated there is a substantial amount that was
not included.
Mr. Lyons commented the developers are trying to stay under ten year which is a benchmark set
by Council. He explained when Council looks at TIFs, they really like things that cash flow under
ten years. He said the applicant, in looking at the numbers, only asked enough to stay under that
ten year window.
Ms. Nieforth asked Mr. Hess what the total TIF request was to the total investment.
Mr. Hess replied $1.7 million is 7.4% of the overall investment.
Mr. Ford said he wants to ensure that Plan Commission is doing its due diligence and thanked
staff for answering his questions.
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Plan Commission Minutes July 2, 2019
Ms. Nieforth said it is something the city does when it is working the Ehlers. She said there is a
market analysis that the city requires as part of the submittal to ensure the city can meet the TIF
obligations should something happen.
Mr. Hinz said typically Oshkosh has not been friendly to restaurants that wants TIFs. He said
there have been two that have come through with multi-use developments. He stated the
Mineshaft is going to dominate this property as far as what people think of when they think about
the property. He said the overlay is going prevent another restaurant coming into the space. He
stated this is exactly why we have TIFs because this is a gateway to the city. He said this area has
been up for discussion for the last ten years. He commended everyone for working on this.
Mr. Fojtik said this gives a chance to correct some mistakes from the original development in terms
of building layout. He said given the long time the area has sat and the aviation overlay
restrictions, he feels this is an appropriate step.
Motion carried 9-0.
There being no further business, the meeting adjourned at approximately 5:23 pm. (Hinz/Propp)
Respectfully submitted,
Mark Lyons
Acting Planning Services Manager
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JULY 23, 2019 19-442 RESOLUTION
CARRIED 7-0 LOST LAID OVER WITHDRAWN
PURPOSE: APPROVE TAX INCREMENT DISTRICT NO. 37 PROJECT PLAN;
DESIGNATE TAX INCREMENT DISTRICT NO. 37 BOUNDARIES;
CREATE TAX INCREMENT DISTRICT NO. 37 AVIATION PLAZA
REDEVELOPMENT
INITIATED BY: MINESHAFT OSHKOSH, LLC; EXTREME CUSTOMS, LLC;
PHOENIX REALTY, LLC; ROGAN'S SHOES, INC.
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. 37 (the "District") is proposed to be
created by the City as a as district in need of rehabilitation or conservation in accordance
with the provisions of Wisconsin Statutes Section 66.1105 (the "Tax Increment Law"); and
WHEREAS, a Project Plan for the District has been prepared that includes:
a. A statement listing the kind,number and location of all proposed public works
or improvements within the District, or to the extent provided in Wisconsin
Statutes Sections 66.1105(2)(k) and 66.1105(4)(gm), outside of the District;
b. An economic feasibility study;
c. A detailed list of estimated project costs;
d. A description of the methods of financing all estimated project costs and the
time when the related costs or monetary obligations are to be incurred;
e. A map showing existing uses and conditions of real property in the District;
f. A map showing proposed improvements and uses in the District;
g. Proposed changes of zoning ordinances, master plan, map,building codes and
City ordinances;
h. A list of estimated non-project costs;
i. A statement of the proposed plan for relocation of any persons to be displaced;
j. A statement indicating how the District promotes the orderly development of
the City;
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JULY 23, 2019 19-442 RESOLUTION
CONTD
k. An opinion of the City Attorney or of an attorney retained by the City advising
that the plan is complete and complies with Wisconsin Statutes Section
66.1105(4)(f); and
WHEREAS, prior to its publication, a copy of the notice of public hearing was
sent to owners of all property in the proposed district, to the chief executive officers of
Winnebago County, the Oshkosh Area School District, and the Fox Valley Technical
College District, and any other entities having the power to levy taxes on property located
within the District, in accordance with the procedures specified in the Tax Increment
Law; and
WHEREAS, in accordance with the procedures specified in the Tax Increment
Law, the Plan Commission, on July 2, 2019 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. 37, Aviation Plaza Redevelopment", are hereby
established as specified in Exhibit A of this Resolution.
2.The District is created effective as of January 1, 2019.
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)(a).
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.
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JULY 23, 2019 19-442 RESOLUTION
CONTD
c) The improvement of such area is likely to significantly enhance 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
incremental value 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 75% 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 #37 was within the City boundaries as of
January 1, 2004.
4. The attached Project Plan for "City of Oshkosh Tax Increment District No.
37, Aviation Plaza Redevelopment" is hereby approved, and the City
further finds the Plan is feasible and in conformity with the master plan of
the City.
BE IT FURTHER RESOLVED that the Common Council of the City of Oshkosh
hereby approves creation of Tax Incremental Financing District No. 37 Aviation Plaza
Redevelopment.
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