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<br />MEMO <br /> <br />DATE: October 20,2000 <br /> <br />TO : Honorable Mayor and Council <br /> <br />FROM: Jim March <br /> <br />RE : Northern Forest Products Tax Abatement <br /> <br />............................................................................ <br /> <br />Included in your packet are the two financial projections that Sid Inman of Ehlers and <br />Associates prepared for the proposed tax abatement for Northern Forest Products. The <br />two projections show 25,000 square foot additions with different market valuations per <br />square foot. For the purpose of the public hearing and mailed notices we will be <br />assuming the highest potential valuation for the expansion. This would create an <br />additional $900,000 in taxable market value. The figures show a valuation of $36/square <br />foot. <br /> <br />The official public hearing is scheduled for November 8th. The official closing date <br />would be November 15th. Expected completion of the expansion would be by early next <br />summer. The tax abatement would begin when the current tax increment district expires. <br />The tax abatement would only be for the City's share of the taxes from the increase in <br />market value due to the expansion. Once the current tax increment district expires, the <br />City will be receiving full taxes on the existing building. The business subsidy <br />agreement will require that Northern Forest Products create a minimum increase of one <br />new job due to the building expansion. Grading on the site is already beginning to occur. <br />This expansion will create the largest building in our Industrial Park at approximately <br />40,000 total square feet. <br />