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2019-10-09 CC Packet
10/9/2019 Administration V.1 Block 7 Housing TIF District - Public Hearing As part of the required process for establishing a Tax Increment Financing District, the Council is to hold a Public Hearing and take input from those wishing to speak on the proposed district. The hearing was property noticed in the official newspaper and mailed notices were sent out. N/A Open a public hearing, take input from all those wishing to speak and close the public hearing. TIF Memo from Northland Securities TIF Plan 1 MEMORANDUM To:CityofCenterville From:TammyOmdal Date:October4,2019 Re:TaxIncrementFinancingDistrictNo.1-8 TheCityofCenterville(the“City”)receivedanapplicationforfinancialassistancefromTrident Development,LLC(the“Developer”)fortheproposedconstructionofamultifamilyhousing development.Theproposedprojectinvolvestheconstructionofanapproximate53-unitapartment buildingwithasmallretailcomponent,withsurfaceparkingspacesplusdetachedgaragebays(the “Project”).ThesitefortheProjectisonvacantlandownedbytheCitylocatedatCentervilleRoad betweenSorelStreetandHeritageStreet. TheCitywillholdapublichearingonOctober9,2019toconsidertheestablishmentofTaxIncrement Financing(Housing)DistrictNo.1-8(the“TIFDistrict”)withinDevelopmentDistrictNo.1.The reasontoconsidertheestablishmentoftheTIFDistrictistoprovidetheauthorityfortheCityto considerfinancialassistancefortheProjectatafuturedate.Thepurposeofthismemorandumisto provideinformationontaxincrementfinancingauthorityandprocessforestablishingtheTIF District,alongwithasummaryoftheproposedplanfortheTIFDistrict. BackgroundonTIFAuthority TIFisastatutoryfinancingtooltopromoteeconomicdevelopment,redevelopment,andhousing developmentinareaswhereitwouldotherwisenotoccur.TheestablishmentofaTIFdistrictallows theCityto“capture”therevenuesgeneratedbytheincreaseinnettaxcapacityresultingfromnew developmentwithinadesignatedgeographicareacalledaTIFdistrict.Therevenuecomesfromthe increaseinpropertytaxes,withsomelimitedexceptionstothetaxesthatmaybecapturedwithina TIFdistrict. TheCitymayusetaxincrementstofinancepublicimprovementsandotherqualifyingcostsrelated tothenewdevelopmentthatgeneratedtheincreaseinnettaxcapacity.Certainfindingsmustbe madebytheCitywhenapprovingaTIFdistrict,includingafindingbytheCityCouncilthata project,asproposed,isfeasibleonlythroughassistance,inpart,fromtaxincrementfinancing.Thisis commonlyreferredtoasa“butfor”finding. NorthlandSecurities,Inc.150SouthFifthStreet,Suite3300,Minneapolis,MN55402,MainTel.612-851-5900 www.northlandsecurities.com MemberFINRAandSIPC|RegisteredwithSECandMSRB 2 CentervilleTIFDistrict1-8 October4,2019 Page 2 HousingTIFDistrict ThepurposeofahousingTIFdistrictistoassistdevelopmentofowner-occupiedandrentalhousing whereaminimumportionoftheunitsareprovidedforlow-andmoderate-incomeindividualsand families.Housingcanbeconstructedonbarelandprovidedthequalifyingcriteriaaremet. TheDeveloperoftheProjectisproposingtoprovideforaminimumof20%oftherentalunitstobe affordabletopersonsat50%orlessofareamediangrossincome.Thiswouldmeettheminimum requirementsofahousingtaxincrementfinancingdistrictunderMinnesotalaw.Figure1that followsprovidesinformationonincomelimitsbyhouseholdsizeandcorrespondingrentsby bedroomsize.Fortheproposed53-unitapartmentbuildinginCenterville,tomeettherequirements atleast11oftheunitswouldneedtobeleasedtoincomequalifiedpersons.Theremaining42units maybeleasedatmarketraterentsandtopersonthatarenotincomequalified. Figure1. IncomeLimitsbyHouseholdSizefor 2019at50%ofAreawideGross MedianIncome 1Person$35,000 2Person$40,000 3Person$45,000 Size 4person$50,000 Household Rentsat50%ofMedianIncomeMarketRents Studio$875$1,100 1-Bedroom$937$1,500 2-Bedroom$1,125$1,775 mSize Bedroo SourceofdataforFigure1:MNHousingFinanceAgency,dataforyear2019, andMarketRentsbasedonDeveloperProForma. ProcessforApproval ThefirststepincreatingtheTIFDistrictistheadoptionofaTaxIncrementFinancingPlanfortheTIF District(the“TIFPlan”).TheTIFPlanprovidesinformationabouttheProjecttobefundedwithtax incrementfromtheTIFdistrictandauthorizestheuseoftaxincrementfromthedistricttopayTIF- eligibleprojectcosts,amongotheritems. AtaxincrementfinancingdistrictestablishedbytheCitymustbeestablishedwithintheboundaries ofaDevelopmentDistrict.TheDevelopmentDistrictissometimescommonlyreferredtoasa “projectarea”.TheCityhaspreviouslyestablishedDevelopmentDistrictNo.1,asmodifiedover time,andsettheboundariesoftheDevelopmentDistricttobecontiguouswiththeboundariesofthe City.WhenanewtaxincrementfinancingdistricthasbeenestablishedbytheCity,theDevelopment ProgramfortheDevelopmentDistrict,hasbeenamendedandsupplementedfromtimetotime.The 3 CentervilleTIFDistrict1-8 October4,2019 Page 3 DevelopmentProgramisawrittenplanthatcontainsthestatementofobjectivesforthe DevelopmentDistrictandcontainstheinformationsetforthinMinnesotaStatutes.TheDevelopment ProgrammaybeincludedinthesamedocumentthatcontainstheTIFPlan,butthetwoplansare separateandmustcomplywithrespectivestatutoryrequirements. AftertheTIFDistrictisestablished(TIFPlanadopted),theCitymayconsiderenteringintoa development(TIF)agreementwiththeDeveloperfortaxincrementfinancingassistance.TheCity plansforthistooccuratadatefollowingthepublichearingdate.Theproposedtermsofthe agreementandprojectspecificsarestillunderdiscussionbetweentheCityandtheDeveloper. NoticetoCountyandSchoolDistrict BeforethepublichearingandtheestablishmentofaTIFdistrict,theCitymustprovidecertain noticestothecountyandtheschooldistrict,includingprovidingacopyofadraftTIFplan.The countyandschooldistrictmaycommentontheproposedTIFdistrictbutcannotpreventthecreation oftheTIFdistrict.OnbehalfoftheCity,NorthlandsubmittedaletterandadraftcopyoftheTIF PlanfortheTIFDistricttoAnokaCountyandCentennialSchoolDistrictonSeptember9,2019asking toreceivewrittencomments.Asofthedateofthismemorandumnocommentswrittenororalhave beenreceivedbyNorthland. AdoptionofModifiedDevelopmentProgramandTIFPlan Followingthepublichearing,theCityCouncilmayconsideraresolutionapprovingthemodification totheDevelopmentProgramforDevelopmentDistrictNo.1andtheestablishmentoftheTIF DistrictwithintheDevelopmentDistrictandtheadoptionoftheTIFPlanrelatingthereto(the “Resolution”).TheCityCouncilmayconsideradoptionoftheResolutiononthesamedateofthe publichearing(afterclosingthehearing)oradatefollowing. TIFPlanSummary Taxincrementfinancingplanscanbeconfusingandtechnical,astheplanstendtocontainlanguage thatisstatutorilyrequiredpursuanttotheDevelopmentDistrictAct(whichmeansMinnesota Statutes,Sections469.124through469.133)andtheTIFAct.Thesummarythatfollowsisprovidedto highlightthekeyelementsoftheDevelopmentProgramandtheTIFPlan.Acompletecopyofthe draftproposedDevelopmentProgramandTIFPlan(containedwithinonedocument)isincludedin theCouncilpacket. ItemPlanSectionComments ProjectAreaArticleIITIFDistrict1-8willbelocatedwithintheboundariesof DevelopmentDistrictNo.1.TheDevelopmentDistrictis coterminouswiththeboundariesoftheCity.The DevelopmentProgramisprovidedinArticleII.The DevelopmentProgramisdifferentthantheTIFPlan.It includesobjectivesandlanguagethatisspecifictothe DevelopmentDistrict.Taxincrementfinancingdistricts, whichtodatetheCityhaspreviouslyestablishedseven 4 CentervilleTIFDistrict1-8 October4,2019 Page 4 ItemPlanSectionComments differentdistricts,maybeestablishedwithinthe boundariesoftheDevelopmentDistrict. Conformance3.02.2Section3.02oftheTIFPlansummarizestheproposed developmentandexplainshowthisdevelopmentis withCityPlans consistentwithlocalplansandpoliciesoftheCity. TypeofDistrict3.03.3TIFDistrict1-8isahousingdistrict.TheDistrictwill meetthestatutorycriteriaforahousingdistrictinthat theCitywillrequiretheDevelopertomeetthenecessary incomerequirementsforaqualifiedresidentialrental project(20%oftheunitsleasedtopersonat50%ofAMI). DistrictBoundary3.03.2TheTIFDistrictincludeseight(8)parcels.Theparcelsare currentlyownedbytheCity.TheCityplanstosellthe propertytotheDeveloper.Thepropertywillbeplatted, likelyintooneparcel.Theplattingofthepropertywill occuraftertheestablishmentoftheTIFDistrict.Platting ofpropertyandchangeinparcelidentificationnumbers oftenoccurswithintheboundariesoftaxincrement districts.Thisisallowableandprovisionsforhowthisis handledbytheCountyAuditorareincludedintheTIF Act. EstimatedTIF3.04.1Theprojecteddevelopmentisestimatedtocreateannual andProjectCoststaxincrementrevenueof$100,189inthefirstyearofthe 3.04.2 TIFDistrictoruponcompletionofdevelopment.This amountisbasedonthefollowingfactors: Totalestimatedmarketvalueofthepropertyafter developmentof$6.36million.Thisamountisless thantheDeveloper’stotalpreliminaryestimated constructioncostofapproximately$10.15million, whichisthetypicalcaseforthesetypesofprojects. Classificationofthepropertyas4a(market-rate apartments). TheoriginalnettaxcapacityvalueoftheTIFDistrict willbebasedonthecurrentmarketvalueofthe propertyfortaxespayablein2019.Thepropertyis taxexemptatthistime.Aproperty’snettaxcapacity isdeterminedbymultiplyingtheproperty’staxable marketvaluebytherelevantclassrateorrates.Class 5 CentervilleTIFDistrict1-8 October4,2019 Page 5 ItemPlanSectionComments ratesaresetbystatute,varybypropertytype,and areuniformstatewide.Forpurposeofcalculatingtax increments,theCountyAuditorwillsettheoriginal nettaxcapacityvalueoftheTIFDistrictbasedonthe futureuse(apartments). Theestimatedlocaltaxrateof134.74%intheTIF Planisbasedontaxratesfortaxespayablein2019, includestheCity,County,School,andotherlocal taxingjurisdictionstaxratespursuanttothe provisionsintheTIFAct.Thisrateisusedto estimatethefuturetaxincrements.Uponrequestto theCountyAuditortocertifytheTIFDistrict,andthe anticipatedtimingoftherequest,itisanticipatedthe finalcertifiedtaxratefortheTIFDistrictwillbe basedonthelocaltaxratefortaxespayablein2020. Theactualestimatedmarketvalueofthepropertywillbe setbytheAssessoraftercompletionofconstruction. Changesinpropertyvaluesandtaxrateswillalterthe amountoftaxincrementrevenuefromyear-to-year.The TIFPlanincludesestimatesforplanningpurposesonly. UsesofTIF3.04.2TaxincrementrevenuewillbeusedtopayProjectCosts relatedtodevelopmentoftheProperty.TheTIFPlan 3.04.3 providesforthereimbursementofupto$1.35millionof 3.04.4 ProjectcoststobeincurredbytheDeveloper.TheProject Costincludeupto$350,000forland,$33,840for 3.04.5 constructionofaffordablehousing,and$350,160for improvementsrelatedtoadjacentpublicstreets,trailre- route/extension,andpublicboulevardimprovements, alongwithreimbursementofcertainutilitycostsinthe amountof$616,000. TheCitywillreservetherighttoretainupto10%of annualtaxincrementrevenuetopayforCity administrativeexpenses.However,theCityanticipatesit mayagreetoretainalessoramountof5%toreimburse administrativecosts. ReimbursementofProjectCostswillbeonapay-go basis.AstaxincrementiscollectedbytheCityonasemi- annualbasiswithdistributionoftaxesfromtheCounty, 6 CentervilleTIFDistrict1-8 October4,2019 Page 6 ItemPlanSectionComments theCitywillusetheavailabletaxincrementsto reimbursetheDeveloperandtheCityforactualcosts incurred,alongwithinterestpaymentsonthebalances outstanding.ThetermsforpaymenttotheDeveloper willbedetailedinadevelopment(TIF)agreementand thetermsforpaymenttotheCitywillbedetailedina resolutionprovidingfortheadvancementoffundsto payCityadministrativecosts. Bonded3.04.7AllpaymentstotheDeveloperwillbeona“pay-go” basispayablesolelyfromavailabletaxincrementsand Indebtedness willnotbeageneralobligationoftheCity.TheTIFAct describesa“pay-go”TIFrevenuenoteasabonded indebtedness. TheCitymayloanoradvancemoneyfromitsGeneral Fundoranyotherfundithaslegalauthoritytouseto financetheCityadministrativecostsfortheTIFDistrict, includingcostsrelatedtotheestablishmentoftheTIF District.TheCitywillreimburseitselfwithaportionof thetaxincrementscollected.TheTIFPlanprovidesfor reimbursementofupto$70,967ofadministrativecosts. Duration3.04.8TheTIFPlanelectsamaximumdurationof20years whichislessthanthemaximumdurationallowedfora housingTIFdistrictintheTIFAct.Theestimatedmonth andyearoffirstreceiptoftaxincrementisJuly2022.The estimatedrequireddecertificationdatebasedonyear 2022asthefirstyearoftaxincrementcollectionis December31,2041.TheTIFActallowstaxincrementsto becollectedfromahousingTIFdistrictforaperiodnot toexceed25yearsfromthedateofreceiptofthefirsttax increment.Asnoted,theTIFPlanfortheTIFDistrict providesforshorterdurationthanwhatisallowedby law. PropertyTaxes BecausethepropertywheretheProjectwillbelocatediscurrentlytaxexempt,theapprovalofthe TIFDistrictandcompletionoftheProjectwillresultinanestimated$24,943increaseintaxespayable totherespectivetaxingjurisdictions.ThisamountwillnotbecapturedwithintheTIFDistrict.The estimatedannualcapturedtaxes(taxincrements)isestimatedat$100,189(inthefirstyearoftheTIF 7 CentervilleTIFDistrict1-8 October4,2019 Page 7 District).Thisisbasedonanestimatedtaxablemarketvalueof$6.36millionfortheProjectand basedontaxratesforyear2019.Figure2belowprovidesfurtherdetailsfortheestimates. Figure2. AllFiguresareEstimatedbasedontheProject AnnualCaptured AnnualTaxes TaxingJurisdictions CurrentTaxesTaxes(TaxTotalAnnual ReceivedifTIFis ReceivedIncrement)ifTIFTaxes Approved isApproved City$0$2,958$42,741$45,699 SchoolDistrict$0$19,862$26,756$46,618 County$0$1,831$26,465$28,296 OtherSpecialTaxing $0$292$4,226$4,519 Jurisdictions Total$0$24,943$100,189$125,132 Notes: 1.Amountsareestimatedbasedontaxablemarketvalueof$6,360,000,classifiedasmarketrate apartments,pay2019taxrates. 2.CapturedtaxesreferstothetaxesthatwillbecapturedwithintheTIFDistrictandusedtoassistthe Project.ToestablishtheTIFDistrict,theCityCouncilmustfindthattheProject,asproposed,would notbefeasiblewithoutTIF. 3.AllamountsareestimatedandbasedonyearoneoftheTIFDistrict,afterprojectcompletion. 8 DRAFTFORPUBLICHEARING CITYOFCENTERVILLE,MINNESOTA MODIFICATIONOFDEVELOPMENTPROGRAMFOR DEVELOPMENTDISTRICTNO.1 ESTABLISHMENTOFTAXINCREMENTFINANCINGPLANFOR () TAXINCREMENTFINANCINGHOUSING - DISTRICTNO.18 PUBLICHEARINGDATE:OCTOBER9,2019 PLANAPPROVEDBYCITYCOUNCILDATE:______________,2019 PLANCERTIFICATIONREQUESTDATE:___________,2019 PLANCERTIFIEDDATE:____________,2019 NorthlandSecurities,Inc. 150SouthFifthStreet,Suite3300 Minneapolis,MN55402 (800)851-2920 MemberNASDandSIPC RegisteredwithSECandMSRB 9 TABLEOFCONTENTS .........................................................1 Section1.01Introduction......................................................................................1 Section1.02.........................................................................................1 Section1.03PlanPreparation...............................................................................1 ....................................2 Section2.01Overview...........................................................................................2 Section2.02StatementofObjectives...................................................................2 Section2.03BoundariesofDevelopmentDistrict.............................................3 Section2.04DevelopmentActivities...................................................................3 Section2.05PaymentofProjectCosts.................................................................3 Section2.06EnvironmentalControls;LandUseRegulations.........................3 Section2.07ParkandOpenSpacetobeCreated..............................................3 Section2.08ProposedRuseofProperty.............................................................4 Section2.09AdministrationandMaintenanceofDevelopmentDistrict......4 Section2.10Amendments.....................................................................................4 .......................................................5 Section3.01StatutoryAuthority..........................................................................5 Section3.02PlannedDevelopment.....................................................................5 3.02.1ProjectDescription......................................................................................5 3.02.2CityPlansandDevelopmentProgram....................................................5 3.02.3LandAcquisition.........................................................................................5 3.02.4DevelopmentActivities..............................................................................5 3.02.5NeedforTaxIncrementFinancing...........................................................5 Section3.03TaxIncrementFinancingDistrict...................................................6 3.03.1Designation..................................................................................................6 3.03.2BoundariesofTIFDistrict..........................................................................6 3.03.3TypeofDistrict............................................................................................6 Section3.04PlanforUseofTaxIncrement........................................................7 3.04.1EstimatedTaxIncrement............................................................................7 3.04.2ProjectCosts.................................................................................................7 3.04.3EstimatedSourcesandUsesofFunds.....................................................8 Figure3.1......................................................................................................9 3.04.4AdministrativeExpense.............................................................................9 3.04.5CountyRoadCosts.....................................................................................9 3.04.6BondedIndebtedness...............................................................................10 3.04.7DurationofTIFDistrict............................................................................11 3.04.8EstimatedImpactonOtherTaxingJurisdictions.................................11 3.04.9PriorPlannedImprovements..................................................................11 10 ....................................................12 Section4.01..................................................................12 Section4.02..................12 Section4.03Four-YearKnockdownRule.........................................................12 Section4.04PoolingandFive-YearRule...........................................................13 Section4.05FinancialReportingandDisclosureRequirements...................13 Section4.06BusinessSubsidyCompliance......................................................13 EXHIBITS..........................................................................................................................14 ExhibitIPresentValueAnalysis..................................................................14 ExhibitIIProjectedTaxIncrement................................................................15 ExhibitIIIImpactonOtherTaxingJurisdictions..........................................16 ExhibitIVEstimatedTaxIncrementOverLifeofDistrict..........................17 ExhibitVMapofDevelopmentDistrictandTIFDistrict..........................18 11 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 – ARTICLEIINTRODUCTIONANDDEFINITIONS SECTION1.01INTRODUCTION involvestheconstructionofanapproximate53unitapartmentbuildingwithasmallretail component,withsurfaceparkingspacesplusdetachedgaragebays.Theproposedsiteforthe buildingisonvacantlandownedbytheCitylocatedatCentervilleRoadbetweenSorelStreet andHeritageStreet. ProgramforDevelopmentDistrictNo.1throughtheestablishmentanduseofTaxIncrement FinancingDistrictNo.1-8withintheDevelopmentDistrict.TheproposedTaxIncrement FinancingPlanfortheDistrictwillauthorizetheuseoftaxincrementstopayforcertaineligible projectcosts. SECTION1.02DEFINITIONS Forthepurposesofthisdocument,thetermsbelowhavethemeaningsgiveninthissection, 1.“City”meanstheCityofCenterville,Minnesota. 2.“CityCouncil”meanstheCityCounciloftheCity. 3.“County”meansAnokaCounty,Minnesota. 4.“Developer”meansapartyundertakingconstructionwithintheTIFDistrict. 5.“DevelopmentDistrict”meansDevelopmentDistrictNo.1intheCity,createdand 6.“DevelopmentDistrictAct”meansMinnesotaStatutes,Sections469.124through469.133,as amendedandsupplementedfromtimetotime. 7.“DevelopmentProgram”meanstheDevelopmentProgramfortheDevelopmentDistrict,as amendedandsupplementedfromtimetotime. 8.“Project”meansconstructionoftheapproximate53unitapartmentbuildingbythe Developer. 9.“ProjectArea”meansthegeographicareaoftheDevelopmentDistrict. 10.“ProjectCosts”meansthecostofthedevelopmentactivitiesthatwillorareexpectedto occurwithintheProjectAreaorTIFDistrict. 11.“SchoolDistrict”meansCentennialSchoolDistrict(IndependentSchoolDistrictNo.12). 12.“State”meanstheStateofMinnesota. 13.“TIFAct”meansMinnesotaStatutes,Sections469.174through469.1794,bothinclusive. 14.“TIFDistrict”meansTaxIncrementFinancing(Housing)DistrictNo.1-8. 15. SECTION1.03PLANPREPARATION ThedocumentwaspreparedfortheCitybyNorthlandSecurities,Inc. DRAFTFORPUBLICHEARINGOCTOBER9,20191 12 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 - ARTICLEIIMODIFICATIONTODEVELOPMENTPROGRAM SECTION2.01OVERVIEW TheDevelopmentDistrictandtherelatedDevelopmentProgramserveasatooltoachievethe objectivesdescribedinSection2.02.TheDevelopmentDistrictservesastheProjectAreaforthe describestheCity’sobjectivesforthedevelopmentofthisareaandtheuseoftaxincrement SECTION2.02STATEMENTOFOBJECTIVES pursuanttotheDevelopmentDistrictActisnecessaryandinthebestinterestsoftheCity anditsresidentsandisnecessarytogivetheCitytheabilitytomeetcertainpublicpurpose objectivesthatwouldnotbeobtainableintheforeseeablefuturewithoutinterventionbythe Cityinthenormaldevelopmentprocess. outlinedbelowthroughtheimplementationoftheDevelopmentProgram.Theseobjectivesare consistentwiththerequirementsoftheDevelopmentDistrictAct. 1. developmentoftheDevelopmentDistrictandadjacentareasoftheCity. 2.Encouragetheredevelopmentofblightedandunder-utilizedareasoftheCity. 3.Facilitatetheremovalofdeterioratedstructuresandencourageredevelopmentin residentialandcommercialareasprovidinghighlevelsofpropertymaintenanceandprivate investment. 4. DevelopmentDistrict,whichpropertyisnotnowinproductiveuseorinitshighestandbest use,withaminimumadverseimpactontheenvironment,andtherebypromoteandsecure thedesirabledevelopmentofotherlandintheCity. 5.PromoteandsecureadditionalemploymentopportunitieswithintheDevelopmentDistrict andtheCityforresidentsoftheCityandthesurroundingarea,therebyimprovingliving standardsandreducingunemploymentandthelossofskilledandunskilledlaborandother humanresourcesintheCity. 6.SecuretheincreaseinvaluesofpropertysubjecttotaxationbytheCity,theSchoolDistrict, governmentalservicesandprogramsthattheyarerequiredtoprovide. 7. andcommercialandotherappropriatedevelopmentintheDevelopmentDistrictsoasto maintaintheareainamannercompatiblewithitsaccessibilityandprominenceintheCity. 8.Encouragetheexpansionandimprovementofresidentialproperty,localbusiness,economic activityanddevelopment,wheneverpossible. 9.CreateadesirableanduniquecharacterwithintheDevelopmentDistrictthroughquality landusealternativesanddesignqualityinnewbuildings. DRAFTFORPUBLICHEARINGOCTOBER9,20192 13 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 SECTION2.03BOUNDARIESOFDEVELOPMENTDISTRICT TheboundariesoftheDevelopmentDistrictarecontiguouswiththeboundariesoftheCityand isdepictedinExhibitVI. SECTION2.04DEVELOPMENTACTIVITIES activitiespursuanttotheDevelopmentDistrictAct,theTIFActandotherapplicablestatelaws, andindoingsoanticipatesthatthefollowingmay,butarenotrequired,tobeundertakenby theCity: 1.Themakingofstudies,planning,andotherformalandinformalactivitiesrelatingtothe DevelopmentProgram. 2.TheimplementationandadministrationoftheDevelopmentProgram. 3.TherezoningoflandwithintheDevelopmentDistrict. 4.Theacquisitionofproperty,orinterestsinproperty,bypurchaseorcondemnation,which acquisitionisconsistentwiththeobjectivesoftheDevelopmentProgram, 5.Thepreparationofpropertyforuseanddevelopmentinaccordancewithapplicableland useregulationsanddevelopmentagreements,includingdemolitionofstructures,clearance 6.Theresaleofpropertytoprivateparties. 7.Theconstructionorreconstructionofsiteimprovementstopropertywithinataxincrement 8. DevelopmentProgram,andtheuseoftaxincrementsorotherfundsavailabletotheCityto byitpursuanttotheDevelopmentProgram. 9. SECTION2.05PAYMENTOFPROJECTCOSTS ProjectCostsandtheplanfortheirpaymentaredescribedintheTIFPlan.Itisanticipatedthat theProjectCostsoftheDevelopmentProgramwillbepaidprimarilyfromtaxincrementsfrom theTIFDistrict. SECTION2.06ENVIRONMENTALCONTROLS;LANDUSEREGULATIONS Allmunicipalactions,publicimprovementsandprivatedevelopmentshallbecarriedoutina mannerconsistentwithexistingenvironmentalcontrolsandallapplicablelanduseregulations. SECTION2.07PARKANDOPENSPACETOBECREATED ParkandopenspacewithintheDevelopmentDistrictifcreatedwillbecreatedinaccordance withtheCity’sComprehensivePlanandzoningandsubdivisionordinances. DRAFTFORPUBLICHEARINGOCTOBER9,20193 14 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 SECTION2.08PROPOSEDREUSEOFPROPERTY TheDevelopmentProgramreservestheauthorityfortheCitytoacquirepropertyandreconvey thesametoanotherentity.AllparcelsintheDevelopmentDistrictareeligibleforacquisition. Inacquiringland,theCityCouncilwillrequiretheexecutionofabindingdevelopment agreementwithrespecttheretoandevidencethattaxincrementsorotherfundswillbeavailable torepaytheProjectCostsassociatedwiththeproposedacquisition.ItistheintentoftheCityto negotiatetheacquisitionofpropertywheneverpossible.Appropriaterestrictionsregardingthe reuseandredevelopmentofpropertyshallbeincorporatedintoanydevelopmentagreements towhichtheCityisaparty. SECTION2.09ADMINISTRATIONANDMAINTENANCEOFDEVELOPMENT DISTRICT MaintenanceandoperationoftheDevelopmentDistrictwillbetheresponsibilityoftheCity AdministratorwhoshallserveasadministratoroftheDevelopmentDistrict.ByJuly1ofeach yeartheAdministratorwillsubmittotheCityCouncilthemaintenanceandoperationbudget forthefollowingyear,pursuanttotheprovisionsofSection469.130oftheDevelopmentAct. TheAdministratorwilladministertheDevelopmentDistrictpursuanttotheprovisionsof Section469.131oftheDevelopmentDistrictAct;provided,however,thatsuchpowersmayonly beexercisedatthedirectionoftheCityCouncil.NoactiontakenbytheAdministratorpursuant TheCitydoesnotanticipateincurringanyannualmaintenanceandoperationscostsforthe DevelopmentDistrict. SECTION2.10AMENDMENTS TheCityreservestherighttoalterandamendtheDevelopmentProgram,subjecttothe orreducethesizeandscopeoftheDevelopmentDistrict,theDevelopmentProgramandthe ProjectCosts. DRAFTFORPUBLICHEARINGOCTOBER9,20194 15 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 - ARTICLEIIITAXINCREMENTFINANCINGPLAN SECTION3.01STATUTORYAUTHORITY TheTIFDistrictandtheTIFPlanareestablishedundertheauthorityoftheTIFAct. SECTION3.02PLANNEDDEVELOPMENT 3.02.1ProjectDescription TheDeveloperproposestodevelopanapproximate1.6acresitelocatedwithinthe DevelopmentDistrict.TheProjecttobeconstructedisanapproximate53unitapartment buildingwithasmallretailcomponent,withsurfaceparkingspacesplusdetachedgaragebays. TheproposedsiteforthebuildingisonvacantlandownedbytheCitylocatedatCenterville RoadbetweenSorelStreetandHeritageStreet. 3.02.2CityPlansandDevelopmentProgram InadditiontoachievingtheobjectivesoftheDevelopmentProgram,theproposeddevelopment isconsistentwithandworkstoachievethedevelopmentobjectivesoftheCity.TheTIFPlan fortheTIFDistrictconformstothegeneralplanfordevelopmentorredevelopmentoftheCity asawhole.TheCityhasadoptedlandusecontrolstoguidetheuseofproperty.Theproposed developmentplansfortheprojectintheTIFDistrictwillbesubjecttoreviewbythePlanning CommissionandtheCityCouncil. 3.02.3LandAcquisition TheCityownsthelandintheTIFDistrictandplanstosellthepropertytotheDeveloperforthe Project.Thepropertytobeconveyedislegallydescribedasfollows: •NEWLEGALDESCRIPTIONWILLBEINSERTEDHEREINFINALPLANPRIORTO CERTIFICATIONREQUESTTOTHECOUNTYFORTHETIFDISTRICT ThepropertytobesoldincludesthefollowingeightparcelsattimeofestablishmentoftheTIF District: •23-31-22-23-0011 •23-31-22-23-0010 •23-31-22-23-0009 •23-31-22-23-0008 •23-31-22-23-0007 •23-31-22-23-0014 •23-31-22-23-0006 •23-31-22-23-0005 3.02.4DevelopmentActivities AsofthedateofapprovalofthisTIFPlan,therearenodevelopmentactivitiesproposedinthis TIFPlanthataresubjecttocontracts. 3.02.5NeedforTaxIncrementFinancing InvariousmaterialstheDeveloperhasdemonstratedthattheproposeduseoftaxincrement housingandassociatedinfrastructurerequiredtosupportthefacility.Withouttheproposed assistance,theseinitialup-frontcostswouldmakeitinfeasiblefortheDevelopertobeable opinionoftheCitythattheProjectwouldnotreasonablybeexpectedtooccursolelythrough privateinvestmentwithintheforeseeablefutureandthattheincreasedmarketvalueofthesite DRAFTFORPUBLICHEARINGOCTOBER9,20195 16 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 lessthantheincreaseinthemarketvalueestimatedtoresultfromtheproposeddevelopment aftersubtractingthepresentvalueoftheprojectedtaxincrementsforthemaximumdurationof Acomparativeanalysisofestimatedmarketvaluesbothwithandwithoutestablishmentof theTIFDistrictandtheuseoftaxincrementshasbeenperformedasdescribedaboveandis showninExhibitI.Thisanalysis,whichisnotrequiredbytheTIFActforapprovalofahousing proposeddevelopment(lessthepresentvalueoftheprojectedtaxincrementsforthemaximum establishmentoftheTIFDistrict. SECTION3.03TAXINCREMENTFINANCINGDISTRICT 3.03.1Designation ThisTIFDistrictisdesignatedTaxIncrementFinancing(Housing)DistrictNo.1-8. 3.03.2BoundariesofTIFDistrict TheboundariesoftheTIFDistrictaredepictedinExhibitV.TheTIFDistrictincludesthe propertylegallydescribedasfollowsandtheadjacentroadsandright-of-way: •NEWLEGALDESCRIPTIONWILLBEINSERTEDHEREINFINALPLANPRIORTO CERTIFICATIONREQUESTTOTHECOUNTYFORTHETIFDISTRICT ThepropertywithintheboundariesoftheTIFDistrictincludesthefollowingeightparcelsat timeofestablishmentoftheTIFDistrict: •23-31-22-23-0011 •23-31-22-23-0010 •23-31-22-23-0009 •23-31-22-23-0008 •23-31-22-23-0007 •23-31-22-23-0014 •23-31-22-23-0006 •23-31-22-23-0005 TheseeightparcelswereincludedwithinTaxIncrementFinancing(Redevelopment)District buildingsdidoccurbuttheplannedredevelopmentwithinTaxIncrementFinancingDistrict No.1-6didnotoccurandnotaxincrementswerecollected.TaxIncrementFinancingDistrict 1-6. 3.03.3TypeofDistrict TheTIFDistrictisdesignatedasa“housing”districtpursuanttoSection469.174,Subd.11ofthe Projectwillneedtocommittothefollowing: 1. section142(d)oftheInternalRevenueCode.Thisrequirementappliesfortheduration Countyis$100,000.TheDeveloperwillberequiredtocommittoprovide20%ormore ofunitsforoccupancybypersonsat50%orlessofareamediangrossincome,whichis estimatedat$50,000for2019.TheseincomethresholdsmaychangeoverthelifeoftheTIF District. DRAFTFORPUBLICHEARINGOCTOBER9,20196 17 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 2.Providethatnomorethan20%ofthesquarefootageofeachbuildingtoreceiveassistance fromtaxincrementsconsistofcommercial,retail,orothernonresidentialuses.Revenue improvementsdirectlyrelatedtothehousingprojectsandtheallocatedadministrative expensesoftheCitymaybeincludedinthecostofahousingproject. 3.Failuretocomplywiththeseincomelimitationsissubjecttotheenforcementprovisionsof Section469.1771oftheTIFAct. SECTION3.04PLANFORUSEOFTAXINCREMENT 3.04.1EstimatedTaxIncrement TheoriginalnettaxcapacityvalueoftheTIFDistrictwillbesetbytheCountyuponrequestfor capacity)is$5,145.Thisamountisestimatedbasedontheestimatedtaxablemarketvalueofthe eightparcelswithintheTIFDistrict.Thetaxcapacityvalueiscalculatedbasedonresidential ThetotaltaxcapacityvalueofthepropertyaftercompletionoftheProject,fortaxespayable in2022,isestimatedtobe$79,500.Thisamountisbasedonatotalestimatedmarketvalueof betweenthetotaltaxcapacityvalueaftercompletionoftheProjectandtheoriginalnettax capacityvalueisthecapturedtaxcapacityvalue($74,355)forthecreationoftaxincrements. Thetotallocaltaxratefortaxespayablein2019is134.74%.TheTIFPlanassumesthisrateas taxcapacityfortheTIFDistrict,thecountyauditorwillcertifytheoriginallocaltaxratethatwill applytotheTIFDistrict.Theoriginallocaltaxrateisthesumofallthelocaltaxrates,excluding StatutesSection126C.13,thatapplytoapropertyintheTIFDistrict.Thelocaltaxratetobe localtaxrateforthelifeoftheTIFDistrict. Undertheseassumptions,theestimatedannualtaxincrementaftertheProjectiscompleted willbe$100,189fortaxespayablein2022.Theactualtaxincrementwillvaryaccordingtothe theproposeddevelopmentandthechangesinpropertyvalueandStateofMinnesotataxpolicy overthelifeofthedistrict. ItistheintentoftheCitytoretain100%ofthecapturedtaxcapacityvalueforthedurationof theTIFdistrict.ExhibitIIcontainstheprojectedtaxincrementoverthelifeoftheDistrict. 3.04.2ProjectCosts TheCitywillusetaxincrementtopayProjectCosts.TheCityanticipatestheuseoftax incrementtopayadministrativeexpensesfortheTIFDistrictandtoreimbursetheDeveloper forreimbursementandthemeansofdisbursingtaxincrementscollectedbytheCitytothe Developer. pursuanttoacontractwiththeDeveloper. TheCityreservestherighttomodifytheTIFPlantoprovideauthoritytoexpendtaxincrement DRAFTFORPUBLICHEARINGOCTOBER9,20197 18 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 fromtheTIFDistrictonotherhousingprojectsthatmeetthecriteriaforestablishingahousing districtconsistingofaproject,oraportionofaproject,intendedforoccupancy,inpart,by personsorfamiliesoflowandmoderateincome.Therequirementsfortheestablishmentofa Thepracticalapplicationofthisauthorityincludes: • •ThetaxincrementcanbespentonactivitiesoutsideoftheTIFdistrict,butwithinthe DevelopmentDistrict. •ThisauthoritydoesnotextendthemaximumstatutorydurationoftheTIFdistrict. • housingprojectandtheallocatedadministrativeexpensesoftheCitymaybeincluded inthecostofthehousingproject. •Nomorethan20%ofthesquarefootageofbuildingsthatreceivetaxincrement Potentialapplicationsofthisauthorityinclude: • district. • •Assistancefortherenovationofexistinghousing. •Acquisitionoflandforhousing. • 3.04.3EstimatedSourcesandUsesofFunds Theestimatedsourcesofrevenue,alongwiththeestimatedProjectCostsoftheTIFDistrict, areitemizedinFigure3-1onthenextpage.Suchcostsareeligibleforreimbursementfrom taxincrementsfromtheTIFDistrict.TheCityreservestherighttoadministrativelyadjustthe amountofanyoftheProjectCostitemslistedinFigure3-1,solongasthetotalestimatedtax DRAFTFORPUBLICHEARINGOCTOBER9,20198 19 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 3.04.4AdministrativeExpense TheCityreservestherighttouseuptotenpercent(10%)ofannualtaxincrementrevenues, inadditiontoanyrequiredfeespaidtotheStateofMinnesotaandCounty.TheCitymay determinetouselessthanthe10%foradminsistrativeexpense,whichisthemaximum allowableundertheTIFAct.TheCitywillusethesemoniestopayforandreimbursethe CityforcostsofadministeringtheTIFdistrictallowedbytheTIFAct.Theestimatedamount oftaxincrementrevenueplannedtopayadministrativeexpenseisshowninFigure3-1. AdministrativeexpensesoftheTIFDistrictwillincludecostsrelatedtotheestablishment, annualauditofthefundforTIFDistrict,preparationofannualreporting,legalpublicationof annualreport,andadministrationofthedevelopmentagreement. 3.04.5CountyRoadCosts Theproposeddevelopmentwillnotsubstantiallyincreasetheuseofcountyroadsand necessitatetheneedtousetaxincrementstopayforcountyroadimprovements. DRAFTFORPUBLICHEARINGOCTOBER9,20199 20 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 3.04.6BondedIndebtedness reimbursedfromtaxincrementpursuanttotheTIFAct.Becausedevelopmentwilloccurbefore taxincrementrevenueswillbegeneratedandavailable,bondedindebtednessisanticipated. theTIFDistrictisshowninFigure3-1.TheCitywillnotissueanygeneralobligationbonded indebtednessasaresultoftheTIFPlan. (PAYG)basisforProjectCostspursuanttoacontractwiththeDeveloper.APAYGobligation isaformofbondedindebtedness,arevenueobligation.TheDeveloperwillpayforcertain time.ReimbursementwithtaxincrementrevenuesfromtheTIFDistrictwilloccurwhenand totheextenttaxincrementrevenuesbecomeavailable,pursuanttotermsofacontractwiththe Developer.Initially,theDeveloperwilluseitsownfundsand/orprivatelyborrowedfundsfrom TheDeveloperwillberequiredtosubmitinvoicestotheCitytosubstantiatethecosts fortheprincipalamountequaltotheProjectCostsincurred.Section3.04.3oftheTIFPlan providestheauthorityfortheCitytoconsiderreimbursementofProjectCoststotheDeveloper developmentmaybeusedtopaydebtserviceonthePAYGnote,inclusiveofinterest.Iftax Plan,theDeveloperwillnotbereimbursedandtheCityhasnoobligationtopaytheshortfall. WithaPAYGnoteitistheDeveloperwhowillaccepttheriskofadevelopmentthatgenerates lesstaxincrementrevenuesthananticipated.Ifmoretaxincrementrevenuesaregeneratedthan CitymaydecertifytheTIFDistrictearly. 469.176,Subd.4oftheTIFAct,fromthegeneralfundsoftheCityoranyotherfundunder whichthereislegalauthoritytodoso,subjecttothefollowingprovisions: (a)Notlaterthan60daysaftermoneyistransferred,advanced,orspent,whicheveris earliest,theloanoradvancemustbeauthorizedbyresolutionoftheCity. (b)TheresolutionmaygenerallygranttotheCitythepowertomakeinterfundloans loanistoberepaid. (c)Thetermsandconditionsforrepaymentoftheloanmustbeprovidedinwriting. underMinnesotaStatutes,Section270C.40or549.09asofthedatetheloanoradvance 549.09arefromtimetotimeadjusted.Loansoradvancesmaybestructuredasdraw- downorline-of-creditobligationsofthelendingfund. DRAFTFORPUBLICHEARINGOCTOBER9,201910 21 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 oftheTIFAct:(1)theamountofanyinterfundloanoradvancemadeinacalendaryear; and(2)anyamendmentofaninterfundloanoradvancemadeinacalendaryear. 3.04.7DurationofTIFDistrict ThedurationtocollectandspendtaxincrementsoneligiblepurposesfortheTIFDistrictis 3.04.8EstimatedImpactonOtherTaxingJurisdictions ExhibitsIIIandIVshowtheestimatedimpactonothertaxingjurisdictionsifthemaximum projectedretainedcapturednettaxcapacityoftheTIFDistrictwashypotheticallyavailable taxingjurisdictionsduringthelifeoftheTIFDistrict,sincetheproposeddevelopmentwould nothaveoccurredwithouttheestablishmentoftheTIFDistrictandtheprovisionofpublic assistance.ApositiveimpactonothertaxingjurisdictionswilloccurwhentheTIFDistrictis TheCityanticipatesminimalimpactoftheproposeddevelopmentoncity-providedservices. TherewillbenoborrowingcoststotheCityfortheProject.Amanageableincreaseinwater andsewerusageisexpected.Itisanticipatedthattheremaybeaslightbutmanageable 3.04.9PriorPlannedImprovements Therehavebeennobuildingpermitsissuedinthelast18monthsinconjunctionwithanyof thepropertieswithintheTIFDistrict.TheCitywillincludethisstatementwiththerequestfor DRAFTFORPUBLICHEARINGOCTOBER9,201911 22 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 – ARTICLEIVADMINISTERINGTHETIFDISTRICT SECTION4.01FILINGANDCERTIFICATION 1.UponadoptionoftheTIFPlanbytheCity,theCityshallsubmitacopyoftheTIFPlantothe 2.TheCityshallrequestthattheCountyAuditorcertifytheoriginalnettaxcapacityandnet taxcapacityrateoftheTIFDistrict.ToassisttheCountyAuditorinthisprocess,theCity shallsubmitcopiesoftheTIFPlan,theresolutionestablishingtheTIFDistrictandadopting theTIFPlan,andalistingofanypriorplannedimprovements. SECTION4.02MODIFICATIONSOFTHETAXINCREMENTFINANCINGPLAN TheCityreservestherighttomodifytheTIFDistrictandtheTIFPlan.UndertheTIFAct, thefollowingactionscanonlybeapprovedaftersatisfyingallthenecessaryrequirementsfor ReductionorenlargementinthegeographicareaoftheDevelopmentDistrictortheTIF District. Increaseintheamountofbondedindebtednesstobeincurred. Increaseintheamountofcapitalizedinterest. IncreaseinthatportionofthecapturednettaxcapacitytoberetainedbytheCity. DesignationofadditionalpropertytobeacquiredbytheCity. and(2)thecurrentnettaxcapacityoftheparcelseliminatedequalsorexceedsthenettax theTIFDistrict’soriginalnettaxcapacitywillbereducedbynomorethanthecurrentnettax capacityoftheparcelseliminated. geographicareaoftheTIFDistrict.ThegeographicareaoftheTIFDistrictmaybereducedbut - SECTION4.03FOURYEARKNOCKDOWNRULE SincetheTIFDistrictconsistsofasingleparcel,developmentoftheprojectasplannedprevents anylossofvaluefromtheFour-YearKnockdownRule.TheFour-YearKnockdownRule hascommencedonaparcellocatedwithintheTIFDistrict,thenthatparcelshallbeexcluded improvementsofastreetarelimitedtoconstructionoropeningofanewstreet,relocationofa street,orsubstantialreconstructionorrebuildingofanexistingstreet.TheCitymustsubmit requiredactivityhastakenplaceforeachparcelintheTIFDistrict. DRAFTFORPUBLICHEARINGOCTOBER9,201912 23 ()- TAXINCREMENTFINANCINGHOUSINGDISTRICTNO.18 IfaparcelisexcludedfromtheTIFDistrictandtheCity,orowneroftheparcelsubsequently commencesanyoftheaboveactivities,theCityshallcertifytotheCountyAuditorthatsuch activityhascommencedandtheparcelshallonceagainbeincludedintheTIFDistrict.The CommissionerofRevenue,andaddsuchamounttotheoriginalnettaxcapacityoftheTIF District. - SECTION4.04POOLINGANDFIVEYEARRULE inSection469.174,Subd.11oftheTIFActwillbetreatedasanexpenditurewithinthedistrict incrementswillbespentoutsidetheTIFDistrict(exceptallowableadministrativeexpenses),but suchexpendituresareexpresslyauthorizedintheTIFPlan. SECTION4.05FINANCIALREPORTINGANDDISCLOSUREREQUIREMENTS TheCitywillcomplywiththeannualreportingrequirementsofStateLawpursuanttothe submitareportontheTIFdistrictonorbeforeAugust1ofeachyear.TheCitymustalso annuallypublishinanewspaperofgeneralcirculationintheCityanannualstatementforeach Thereportinganddisclosurerequirementsoutlinedinthissectionbeginwiththeyearthe andalltaxincrementshavebeenspentorreturnedtothecountyforredistribution.Failureto ofdistributionoftaxincrement. SECTION4.06BUSINESSSUBSIDYCOMPLIANCE documentisanticipatedtobe100%forhousingassistance. 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AAA ... ...SSS CCC 999 000 111 555 444 999 "E""E""E" 111 333 111 222 111 444 111 SSS EEE LLL III AAA KKK RRR TTT AAA LLL OOO NNN DDD EEE III DDDTTT AAA AAA CCC OOO LLL AAA RRR VVV FFF OOO YYY TTT DDD 111 NNN UUU 000 III OOO 222 MMM 222 CCC 555 111333 444 555 YYY AAA WWW KKK RRR AAA PPP 666 111 SSSEEEKKKAAALLLOOONNNIIILLLFFFOOOYYYTTTIIICCC DRAFTFORPUBLICHEARINGOCTOBER9,201918 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 10/9/2019 Administration VIII.1.a Block 7 Housing TIF District - Resolution 19-0XX Establishing TIF District 1-8 If the Council wishes to continue negotiations with Trident Development with an offer of Tax Increment Financing assistance, the next step would be to "establish" the district. The final step of "certifying" the district would come at a later date, once a more formal and detailed developer's agreement can be negotiated. Work up to now, by Northland Securities and city staff has established that a Housing TIF District is feasible, justifiable and lawful. Additionally, a public hearing will be held and input from residents will be heard. Considering all of this preliminary information, the Council should decide if it wishes to establish the TIF district or if it wishes to either pursue other financial incentives or a deal without financial incentives. Staff is recommending the use of TIF as the most cost effective and feasible means of completing this project. $1.35 Million - Tax Increment (City/County/School Dist taxes produced by new construction) Motion to adopt Resolution 19-0XX Establishing Centerville TIF District 1-8. 77 EXTRACTOFMINUTESOFAMEETINGOFTHE CITYCOUNCILOFTHECITYOF CENTERVILLE,MINNESOTA HELD:October9,2019 Pursuanttoduecallandnoticethereof,aregularmeetingoftheCityCouncilof theCityofCenterville,AnokaCounty,Minnesota,wasdulyheldonthe8thdayofJuly, 2019at6:30p.m. ThefollowingmembersoftheCouncilwerepresent: andthefollowingwereabsent: Member________________introducedthefollowingresolutionandmovedits adoption. RESOLUTION#190_____ WHEREAS: A.TheCityofCenterville,Minnesota(thehasproposedtomodifythe DevelopmentProgramforDevelopmentDistrictNo.1(theand hasproposedtoestablishTaxIncrementFinancing(Housing)DistrictNo.18(the thereinandapproveandaccepttheproposedTaxIncrementFinancingPlan therefor(theundertheprovisionsofMinnesotaStatutes,Sections469.134 through469.133,bothinclusive,asamendedandMinnesotaStatutes,Sections469.174 through469.1794,bothinclusive,asamended(collectively,theAct). B.TheCityhasperformedallactionsrequiredbylawtobeperformedpriorto theestablishmentoftheDevelopmentDistrictandtheestablishmentoftheTIFDistrict thereinandtheadoptionoftheproposedDevelopmentProgramandTIFPlanrelating thereto,including,butnotlimitedto,notificationofAnokaCountyandCentennialSchool DistrictNo.12havingtaxingjurisdictionoverthepropertytobeincludedintheTIF District. 78 C.TheCityCounciloftheCity(thehasreviewedthecontentsof theDevelopmentProgramandtheTIFPlan,andonthisdateconductedapublichearing thereonatwhichtheviewsofallinterestedpersonswereheard. NOW,THEREFORE,BEITRESOLVEDbytheCityCounciloftheCityof Centervilleasfollows: DevelopmentProgramforDevelopmentDistrictNo.1.Themodificationofthe DevelopmentProgramforDevelopmentDistrictNo.1isapprovedand adopted. TaxIncrementFinancing(Redevelopment)DistrictNo18.TaxIncrement Financing(Housing)DistrictNo.18isherebyestablishedwithinDevelopment DistrictNo.1.TheinitialboundariesoftheTIFDistrictarefixedand determinedasdescribedintheTIFPlan. (b) 79 80 Themotionfortheadoptionoftheforegoingresolutionwasdulysecondedby member_________________anduponvotebeingtakenthereon,thefollowingvotedin favorthereof: andthefollowingvotedagainstthesame: Whereuponsaidresolutionwasdeclareddulypassedandadopted. Mayor,JeffPaar Attest: CityClerk,TeresaBender 81 STATEOFMINNESOTA COUNTYOFANOKA CITYOFCENTERVILLE I,theundersigned,beingthedulyqualifiedandactingCityClerkoftheCityof Centerville,Minnesota,DOHEREBYCERTIFYthatIhavecomparedtheattachedand foregoingextractofminuteswiththeoriginalthereofonfileinmyoffice,andthatthe sameisafull,trueandcompletetranscriptoftheminutesofameetingoftheCityCouncil ofsaidCity,dulycalledandheldonthedatethereinindicated,insofarassuchminutes relate,inpart,totheestablishmentofTaxIncrementFinancingDistrictNo.18intheCity. WITNESSmyhandthis____dayof________________,2019. _____________________________ CityClerk 82 10/9/2019 Administration VIII.1.b Block 7 Housing TIF District - Resolution 19-0XX Authorizing Interfund Loan - TIF District 1-8 If a TIF District is established the attached resolution allows the proper accounting of certain costs for future reimbursement by TIF funds. N/A Motion to adopt Resolution 19-0XX Authorizing Interfund Loan for TIF District 1-8. 83 84 85 86 10/9/2019 Administration IX.1 T-Mobile Anntena Lease The city received the attached letter from a consultant working for T-Mobile on what they refer to as a "Lease Optimization Program." We then received a follow-up phone call from the consultant. In summary, they are telling us that their recent merger with Sprint means they will be looking at getting rid of some towers (presumably, those that overlap with each other) and that part of that decision making process would be which leases are under the best terms. We received a similar letter several years ago and negotiated a new deal with them, but for significantly more than their original offer. This offer, would take our rents down from about $28k/yr to $18k/yr. The inflationary escalator stays the same. Lexington recently went through a similar process and utilized a consultant to determine the risk of their mobile carrier cancelling the lease and to evaluate a fair market rate for the lease. The cost of the consultant was around $2,500. +/-$2,500 General Fund; Risk of $28,000/yr Motion to hire Steel in the Air consultants to perform a Lease Assessment of our site at a cost not to exceed $2,500. Motion to staff to negotiate terms of lease agreement based on the recommendations from the consultant's report. Letter from T-Mobile Consultant Sample report (City of Lexington) from Steel in the Air Current Lease Agreement w/T-Mobile 87 City of Centerville Mark Statz 1880 Main St. Centerville,MN55038-9794 September 17, 2019 Re: National Lease OptimizationProgram A1N0003A,7087 20Th Ave South,Centerville,MN,55038 Md7, LLC has been authorized by T-Mobile to be a part of the National Lease OptimizationProgram (the -Mobile in all correspondence regarding the Program. Please review the following terms. Once these terms are confirmed, a draft amendment will be prepared for you to review. Terms Term: Extend the life of the lease with up to 5 additional renewal terms (1 term is equal to 5 years) Rent: Starting onDecember1, 2019,the rent under the lease will be One Thousand Five Hundred and No/100 Dollars ($1,500.00)Monthly.This figure is based on regional market analysis and operational performance goals. Escalations: On December1, 2020aThree Percent (3%)Annuallyescalator will take effect. NOTE:T-Mobile will also require the addition of language, substantially in the form of the following: Termination: T-Mobile may terminate the Lease by providing Landlord at least three (3) months advance written notice of termination due to technological, regulatory, or economic reasons. Assignment: T-Mobileshall have the right to assign, or otherwise transfer the Lease, upon T- Mobile-Mobile. T- Mobileshall be relieved of all liabilities and obligations and Landlord shall look solely to the assignee, or transferee for performance under the Lease. Upon receipt of a written request from Tenant, Landlord shall promptly execute an estoppel certificate. T-Mobileshall have the right to sublease the Lease without the need for Landlord consent. MOL Recording:Landlord will execute a Memorandum of Lease at T-Mobile Property is encumbered by a deed, mortgage, or other security interest, Landlord will also execute a subordination, non-disturbance, and attornment agreement. Rental Stream Offer:Should Landlordreceive a bona fide offer from a third party that would result in an assignment of some or all of the Rent,Landlordshall immediately notify T-Mobile, and T-Mobileshall have the right to match the terms of the Rental Stream Offer within forty-five (45) days. No Rental Stream Offer may be entered into by Landlordwithout the prior written consent of T-Mobile. Modifications: T-Mobilemay complete upgrades and additions of new equipment within the leased Premises in compliance with required permits. Sincerely, Derek Houston-Brown Md7|Lease Consultant (858) 291-1877 derekhb@md7.com aķАͲ \[\[/ | 10590 West Ocean Air Drive, Suite 300, San Diego, CA 92130 | (858) 799-7850 88 89 90 91 92 93 94 95 96 CELL TOWER LEASE ASSESSMENT RE: EVALUATION OF AMERICAN TOWER LEASE EXTENSION !!!!!!!!!! CITY OF LEXINGTON, MN TIED TO SUBJECT SITE LOCATED AT 9100 HAMLINE AVENUE, LEXINGTON, MN 55014 (LAT. /LONG.: 45.1387/-93.1771) 97 Djuz!pg!Mfyjohupo-!NO! Buuo;Lvsu!Hmbtfs!bu!Tnjui!boe!Hmbtfs-!MMD! 444!Xbtijohupo!Bwfovf! 516!Vojpo!Qmb{b!Cvjmejoh! Njoofbqpmjt-!Njooftpub!66512.2481! RE: EVALUATION OF AMERICAN TOWER LEASE EXTENSION Efbs!Ns/!Hmbtfs;! Tuffm!jo!uif!Bjs-!Jod/!)TJUB*!jt!qmfbtfe!up!qspwjef!uif!gpmmpxjoh!Bttfttnfou!pg!uif!fyufotjpo! wbmvbujpo!boe!joufsftu!cz!Bnfsjdbo!Upxfs!)BUD*jo!uif!Mfbtf!ujfe!up!zpvs!qspqfsuz!bu!:211! Ibnmjof!Bwfovf-!Mfyjohupo-!NO!66125!)Mbu/0Mpoh/;!56/24980.:4/2882*/ Gps!fbtf!pg!vtf-!xf!cfhjo!cz!qspwjejoh!pvs!Executive Findings-!xijdi!fyqsftt!uif!sftvmut!pg! pvs!Bttfttnfou-!cfmpx/!! EXECUTIVE SUMMARY OF FINDINGS: 1. We find the risk of termination of the Lease to be low. 2.We see no reason for ATC to consider anything except remaining at the site for the long term. 3. ATC is running out of time to extend this lease. However, they are also paying above-market rent. 4. Accordingly, we would advise extending the ground lease at the current financial terms while keeping the consent agreement in place as is. letter, it does not need to be extended, as it is coterminous with the lease). We also recommend the following terms: 10-year lease extension; 10-year rent guarantee beginning upon execution of extension agreement; extension of the lease; Do not agree to additional language from ATC such as confidentiality, right of first refusal, power of attorney language, etc. The extension should be straightforward and simple merely extending the terms already in place. Xf!opx!dpoujovf!cz!fyqmbjojoh!jo!efubjm!ipx!xf!bssjwfe!bu!uijt!dpodmvtjpo!boe!foe!uif! Bttfttnfou!xjui!Sfdpnnfoebujpot!po!ipx!up!qspdffe/!! 98 3 CELL TOWER LEASE ASSESSMENT Evaluation of American Tower Lease Extension I.!!THE SUBJECT SITE AND EXISTING LEASE A. Landlord/Tenant Uif!Tvckfdu!Tjuf!jt!bobqqspy/!25:tfmg.tuboejoh!upxfs!mpdbufe!bu!:211!Ibnmjof!Bwfovf-! Mfyjohupo-!NO!66125!)Mbu/0Mpoh/;!56/24980.:4/2882*/!U.Npcjmf!boeWfsj{po!bsf!cpui!dvssfoumz! pqfsbujoh!bu!uijt!Bnfsjdbo!Upxfs!Dpsqpsbujpo!)BUD*!tjuf/!! B. The Lease Uif!Mfbtf!xbt!foufsfe!joup!po!2Nbz!2::7!cfuxffo!uif!Djuz!pg!Mfyjohupo!)Mfttps Njoofbqpmjt!TNTB!Mjnjufe0VT!Xftu!OfxWfdups!)Mfttff*/!Dvssfoumz-!BUD!ipmet!uif!mfbtf/! Ijhimjhiufe!ufsnt!pg!uif!Mfbtf!bsf!bt!gpmmpxt;! Lease Rate: Jojujbm!sfou!pg!%9110np/!xjui!31&!ufsn!ftdbmbujpo<! Revenue Share:See Use and Consent agreement section; Term (and term termination): Jojujbm!ufsn!pg!6!zfbst!qmvt!gpvs!6.zfbs!sfofxbm!ufsnt! xjui!fyufotjpo!opujdf!up!cf!hjwfo!cz!Mfttff!bu!mfbtu!7!npouit!qsjps!up!uif!ofyu!sfofxbm! qfsjpe/!Tff!ipmepwfs!tfdujpo<! Utilities: Mfttff!xjmm!cf!sftqpotjcmf!gps!bmm!vujmjujft!sfrvjsfe!cz!jut!vtf!pg!uif!Qsfnjtft/! Mfttff!nbz!bu!boz!ujnf!bssbohf!up!ibwf!jut!vujmjujft!tfqbsbufmz!nfufsfe!ps!xjmm!qbz!jut! qspqpsujpobuf!tibsf!pg!vujmjujft!gvsojtife!cz!Mfttps<! Termination Rights: Uif!Bhsffnfou!dbo!cf!ufsnjob pg!boz!pg!uif!ufsnt! !Cz!Mfttff!jg!ju!jt!vobcmf!up!nbjoubjo0pcubjo!boz!ofdfttbsz!mjdfotf0qfsnju!ps! puifs!hpwfsonfoubm!bqqspwbm!! !Cz!Mfttff!jg!uif!qsfnjtft!bsf!ps!cfdpnf!vobddfqubcmf!up!Mfttff!voefs!jut! eftjho!ps!fohjoffsjoh!tqfdjgjdbujpot! Ownership of Tower at Expiration: Upxfs!sjhiut!ep!opu!usbotgfs< ui Holdover: Bu!uif!foe!pg!uif!5!sfofxbm-!Mfttff!dbo!dipptf!up!fyufoe!gps!bo!boovbm! ipmepwfs!ufsn/!Fjuifs!qbsuz!dbo!fmfdu!up!ufsnjobuf!uif!mfbtf!cz!hjwjoh!uif!puifs!bu!mfbtu! %2-::10np/< Assignment, transfer, and subletting: !Mfttff!ibt!uif!sjhiu!xjuipvu!qsjps!opujdf!up!ps!dpotfou!cz!Mfttps-!up! bttjho!ps!usbotgfs!uijt!Mfbtf!ps!up!tvcmfu!uif!Qsfnjtft!up!boz! qbsfou0tvctjejbsz0bggjmjbuf-!jodmvejoh-!cvu!opu!mjnjufe!up-!uif! dpnnvojdbujpot!foujujft!xijdi!nbz!fnfshf!gspn!uif!kpjou!wfouvsf! qfoejoh!cfuxffo!VT!XFTU-!Jod/-!boe!BjsUpvdi!Dpnnvojdbujpot<! 99 4 consent payment is prepaid annually; Current expiration date: April 30, 2021 ATC Use Authorization and Consent Agreement June 13, 2007 !Tvcmfttff!)BUD*!jt!ifsfcz!bmmpxfe!up!tvcmfbtf!bmm!ps!boz!qbsu!pg!uif!Qsfnjtft! jodmvejoh-!cvu!opu!mjnjufe!up-!hspvoe!tqbdf!boe!upxfs!tqbdf!up!U.Npcjmf<! !Tvcmfttff!nbz!pomz!dp.mpdbuf!frvjqnfou!po!uif!fyjtujoh!upxfs!boe!xjuijo!uif!mfbtfe! bsfb!gps!U.Npcjmf<! !Tvcmfttff!jt!ifsfcz!hsboufe!uif!sjhiu!up!tvcmfbtf!fydmvtjwfmz!up!U.Npcjmf/!Tvcmfttff! nbz!pomz!tvcmfbtf!up!puifs!ufobout!xjui!uif!xsjuufo!dpotfou!pg!uif!Mfttps<! !Bhsffnfou!svot!dpodvssfoumz!xjui!uif!Qsjnf!Mfbtf<! !Vqpo!sfdfjqu!pg!b!Opujdf!up!Qspdffe-!%25-1110zs/!qbje!up!Mfttps!A!4&!boovbm/!Sfou! xjmm!dfbtf!xifo!ps!jg!U.Npcjmf!dfbtft!vtf!pg!uif!qsfnjtft<! ATC Letter April 17, 2018 !Mfuufs!dpogjsnt!uif!dvssfou!sfout-!bhsffnfout!jo!qmbdf-!boe!fyqjsbujpo!ebuft<!ipxfwfs-! uifsf!jt!op!dpodsfuf!tfu!pg!fyufotjpo!ufsnt!nfoujpofe!jo!uif!epdvnfou<! II. CONTEMPORARY WIRELESS INFRASTRUCTURE INDUSTRY DYNAMICS A. Emerging Technologies Qbsu!pg!pvs!evf!ejmjhfodf!dpotjtut!pg!sfdphoj{joh!boe!bobmz{joh!uif!ezobnjd!obuvsf!pg!uif! )AT&T, Verizon, Sprint, and T-Mobile*!boe!uif!fggfdu!uiftf!ezobnjdt!nbz!ibwf!po!dfmm!tjuft! !uifsfcz!jnqbdujoh!uif!wbmvf!pg!uif!mfbtf!bt!efqjdufe!cz!boz!Pggfst/ Cfdbvtf!ebub!hspxui!qfs!vtfs!jt!hspxjoh!bu!tubhhfsjoh!sbuft!zfbsmz!)ofbsmz!81&!zfbs.pwfs. zfbs!hspxui!gps!uif!mbtu!gfx!zfbst*-!xf!ep!opu!gpsftff!uif!pctpmftdfodf!pg!dfmm!tjuft!)pwfsbmm*! jo!uif!ofbs!gvuvsf/!Po!uif!dpousbsz-!ju!jt!pvs!cfmjfg!uibu!uif!pohpjoh-!xjeftqsfbe!vtf!pg!xjsfmftt! efwjdft!xjmm!jodsfbtf!uif!offe!gps!dfmm!tjuft!bu!mfbtu!gps!uif!ofyu!efdbef-!jg!opu!dpotjefsbcmz! mpohfs/!! 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B.Company Mergers and Acquisitions Dbssjfst!ibwf!cffo!sfnbsszjoh!tjodf!tipsumz!bgufs!uif!csfblvq!pg!uif!Cfmm!Tztufn!jo!2:94/!Jo! uif!qbtu!efdbef-!uif!joevtusz!ibt!xjuofttfe!nboz!nfshfst!boe!tvctfrvfou!usbotgfst!boe! usbeft!pg!tqfdusvn!cboet!jo!wbsjpvt!nbslfut-!nptu!opubcmz-!BU'U0Djohvmbs-!Tqsjou0Ofyufm-! boe!Wfsj{po0Bmmufm/!Evsjoh!fbdi!dibohf!jo!pxofstijq-!tpnf!qpsujpo!pg!uif!ofuxpslt!jt! effnfe!sfevoebou-!nfbojoh!uibu!tqfdjgjd!dfmm!tjuft!bsf!ufsnjobufe!ps!xjmm!cf!ufsnjobufe!bt!b! sftvmu!pg!evqmjdbujpo/!Jo!uif!dbtf!pg!BU'U!boe!Djohvmbs-!bqqspyjnbufmz!7-611!dfmm!tjuft!pvu!pg! 61-111!dpncjofe!tjuft!xfsf!ufsnjobufe!)25&*/!Xifo!Tqsjou!bdrvjsfe!Ofyufm-!ju!boopvodfe! jut!joufoujpo!up!ufsnjobuf!32-111!pvu!pg!76-111!dfmm!tjuft!xjuijo!gjwf!zfbst/!Dmfbsxjsf!jt!opx! nbkpsjuz.pxofe!boe!dpouspmmfe!cz!Tqsjou/!U.Npcjmf!boe!NfuspQDT!gjobmj{fe!uifjs!nfshfs!jo! nje. Nptu!sfdfoumz!U.Npcjmf!boe!Tqsjou!ibwf!b!nfshfs!uibu!uifz!bsf!buufnqujoh!up!hbjo!gfefsbm! bqqspwbm!gps/! Up!tvnnbsj{f-!gvuvsf!dpotpmjebujpo-!ftqfdjbmmz!jo!uif!xjsfmftt!joevtusz-!jt!tpnfxibu!wpmbujmf! boe!voqsfejdubcmf/!Zfu!evf!up!qpufoujbm!sfevoebodjft-!uif!sjtl!uibu!b!tqfdjgjd!dfmm!tjuf!njhiu! op!mpohfs!cf!offefe!jt!joeffe!qpttjcmf/!Uif!gbdu!jt!uibu!joevtusz!nfshfst-!vojpot-!boe! ejttpmvujpot!bsf!b!tjhojgjdbou!volopxo-!tjodf!boz!ebz!ofx!bdrvjtjujpot!njhiu!cf!boopvodfe! )boe!sfusbdufe!xfflt!mbufs!.Npcjmf-!xijdi! xbt!rvjdlmz!sfkfdufe!evf!up!dpodfsot!pg!bouj.dpnqfujujwf!dmbjnt!cz!uif!GDD!boe!Efqbsunfou! pg!Kvtujdf*/!Sfdfoumz-!ofx!joevtusz!dpowfstbujpo!bhbjo!ibt!uvsofe!up!b!U.Npcjmf0Tqsjou! nfshfs-!cvu!bt!pg!uijt!bttfttnfou-!uiftf!uxp!dpnqbojft!ibwf!bhsffe!up!b!nfshfs!ipxfwfs-! uifz!xjmm!tujmm!offe!up!buubjo!gfefsbm!bqqspwbm!gps!uijt/!Xf!dbo!tbz-!ipxfwfs-!uibu!bt!mpoh!bt!uif! joevtusz!sfnbjot!dpnqfujujwf-!uifo!uif!dibodf!uibu!dbssjfst!xjmm!tffl!up!cvjme!pvu!uifjs! ofuxpslt!cz!bttfsujoh!b!qsftfodf!jo!boz!nbslfu!uibu!uifz!ibwf!bddftt!up!)wjb!tqfdusvn! jojujbujwft*!epft!tpnfxibu!pggtfu!uijt!sjtl/!! C. Network Optimization Xijmf!xf!bsf!opu!bxbsf!pg!boz!dvssfou!ufdiopmphz!uibu!xjmm!nblf!dfmm!upxfst!ps!puifs!dfmm! tjuft!pctpmfuf!bt!b!xipmf!jo!uif!ofbs!boe!nje.ufsn!gvuvsf-!uifsf!bsf!ufdiopmphjft!uibu!dpvme! jodsfbtf!uif!fggfdujwfoftt!pg!joejwjevbm!dfmm!tjuft-!nbljoh!tpnf!fyqfoebcmf/!Jodsfbtft!jo!uif! 101 6 pg!iboemjoh!dbmmt!ejggfsfoumz!efqfoejoh!vqpo!uif!ujnf!pg!ebz/!Jodsfbtft!jo!cbtf!tubujpo! frvjqnfou!fggjdjfodz!)uif!frvjqnfou!uibu!iboemft!uif!dbmmt!bu!uif!dfmm!tjuf*!dpvme!jodsfbtf! dbqbdjuz-!uifsfcz!sfevdjoh!uif!offe!gps!tpnf!pwfsmbqqjoh!tjuft/!Opofuifmftt-!dfmm!tjuft!xjmm! tujmm!cf!offefe-!duvsft-!boe! qbsujdvmbsmz!jo!svsbm!bsfbt/!! Jo!gbdu-!xf!tvtqfdu!uibu!pqujnj{bujpo!pg!ofuxpslt!xjmm!bduvbmmz!jodsfbtf!uif!ovncfs!pg!dfmm! tjuft!tvctuboujbmmz!jo!uif!gvuvsf/!Tpnf!ftujnbuft!tvhhftu!b!uisffgpme!jodsfbtf!jo!uif! ovncfs!pg!ofx!dfmm!tjuft/!Ipxfwfs-!nboz!pg!uiftf!dfmm!tjuft!xjmm!opu!cf!usbejujpobm! nbdspdfmmtqjdpdfmmt!ps!gfnupdfmmt!)tff! iuuq;00fo/xjljqfejb/psh0xjlj0qjdpdfmmboe!iuuq;00fo/xjljqfejb/psh0xjlj0gfnupdfmm*!xjmm!jodsfbtf! uif!gmfyjcjmjuz!uibu!uif!dbssjfst!ibwf!jo!efqmpzjoh!uifjs!ofuxpslt/!Uif!dbssjfst!nbz!gjoe!ju! fbtjfs!boe!difbqfs!jo!uif!gvuvsf!up!xpsl!bspvoe!qspcmfnbujd!ps!fyqfotjwf!mbshf!ps!nbdspdfmm! tjuft/!! D. Co-location Dbssjfs!dp.mpdbujpo!jt!uif!tibsjoh!pg!xjsfmftt!jogsbtusvduvsf!frvjqnfou!boe!sftpvsdft-! tqfdjgjdbmmz!upxfst!boe!tjuf!mpdbujpot/!Tvqqpsu!gps!dbssjfs!dp.mpdbujpo!ibt!hbsofsfe!joufsftu! gspn!bmm!tjeft!pg!uif!tqfdusvn-!tp!up!tqfbl/!Uif!GDD!tuspohmz!fodpvsbhft!dbssjfs!dp.mpdbujpo! boe!uif!tibsjoh!pg!tqfdusvn!sftpvsdft-!bt!ju!qspnpuft!npsf!fggjdjfou!nbobhfnfou!pg!sbejp! gsfrvfodjft!boe!dfmmvmbs!cboexjeui/!Nvojdjqbm!boe!Dpvouz!hpwfsonfout!bsf!bmtp!po!cpbse-! tjodf!dp.mpdbujpo!dbo!bqqfbtf!dpnnvojuz!dpodfsot!sfhbsejoh!fowjsponfoubm!bftuifujdt!boe0ps! sbejp.gsfrvfodz!fnjttjpot!cz!mjnjujoh!uif!ovncfs!pg!pof.dbssjfs!tjuft!boe!fodpvsbhjoh!tjuft! xjui!nvmujqmf!dbssjfst/!Bddpsejohmz-!xifsf!pof!tjuf!jt!qmbdfe-!puifst!xjmm!mjlfmz!gpmmpx-!uifsfcz! sfevdjoh!gvuvsf!sjtl!gspn!joevtusz!nfshfst!ps!dpotpmjebujpo/ III.!!CARRIER COVERAGE AND SITE GOALS A.!!ATC Subject Site Purpose BUD!nbef!csfbljoh!ofxt!po!Gfcsvbsz!6-!3126-!xifo!ju!boopvodfe!b!efbm!up!qvsdibtf!22-435! xjsfmftt!bttfut!gspn!Wfsj{po-!jodmvejoh!276!dfmm!upxfst-!gps!bqqspyjnbufmz!%6!cjmmjpo/!Xjui!uijt! dpnqboz!boe!opx!pxot!pwfs!61-111!upxfst!jo!uif!V/T/!Uif!efbm-!xijdi!dmptfe!jo!nje.3126-! hbwf!Wfsj{po!kvtu!voefs!%561-111!qfs!upxfs!xjui!uif!sjhiu!up!mfbtf!cbdl!tqbdf!po!uiptf! upxfst!gspn!BUD! BUD!hfofsbuft!nptu!pg!jut!sfwfovf!cz!tvcmfbtjoh!tqbdf!po!jut!dfmm!tjuft!up!xjsfmftt!dbssjfst! )f/h/-!dp.mpdbujpo*/!Jo!3126-!BUD!qvsdibtfe!ps!fyufoefe!pwfs!4-111!dfmm!tjuf!mfbtft/!Ju!ibt!opx! dpouspmmfe!uif!mboe!cfofbui!75&!pg!jut!upxfst!gps!npsf!uibo!31!zfbst-!xjui!bo!bwfsbhf!ufsn! pg!33!zfbst!sfnbjojoh!po!jut!mboe!mfbtft/!Pg!uif!upxfst!uibu!BUD!pxot!jo!uif!V/T/-! bqqspyjnbufmz!:1&!pg!uif!mfbtft!bsf!xjui!joejwjevbm!mboepxofst-!xijdi!nfbot!uibu!BUD!jt! qbsuz!up!pwfs!56-111!dfmm!tjuf!mfbtft!jo!uif!V/T/!bmpof/! 102 7 Cbtjdbmmz-!upxfs!dpnqbojft!qspgju!cz!sfubjojoh!pxofstijq!pg!uif!bduvbm!tusvduvsf!)ps!bo!joufsftu! pg!tpnf!tpsu*!boe!mfbtjoh!pvu!tqbdf!ps!qmbugpsnt!po!uif!upxfs!up!wbsjpvt!dbssjfst/!Uif!nbkps! dbssjfst!)BU'U-!Wfsj{po-!Tqsjou-!boe!U.Npcjmf*!fbdi!qbz!cfuxffo!%3-1110np/!boe!%4-1110np/! po!bwfsbhf!up!mfbtf!tqbdf!po!b!upxfs!)bt!xfmm!bt!hspvoe!tqbdf*/!Cfdbvtf!pg!uif!tjhojgjdbou! jodpnf!)tpnfujnft!pwfs!%21-1110np/*!upxfs!dpnqbojft!dbo!nblf!gspn!uif!pqfsbujpo!pg! uiftf!upxfst-!uifz!ibwf!bhhsfttjwf!qsphsbnt!jo!qmbdf!up!qvsdibtf!ps!fyufoe!uifjs!mfbtft/! Pwfs!uif!zfbst-!uif!upxfs!dpnqbojft!ibwf!cffo!bdujwfmz!dpoubdujoh!uifjs!mboepxofst!boe! sfrvftujoh!uibu!uifz!fjuifs!fyufoe!uifjs!mfbtf!ps!bhsff!up!b!mfbtf!cvzpvu/!Jo!fttfodf-!fjuifs! bssbohfnfou!jt!bo!buufnqu!cz!uif!upxfs!dpnqboz!up!ujf!vq!uif!mpoh.ufsn!hspvoe!sjhiut!up!uif! voefsmzjoh!hspvoe!mfbtft!voefs!uifjs!upxfst!boe!tfdvsf0qspufdu!qspgjut/!B!ovncfs!pg!gbdupst! jogmvfodf!uiftf!pggfst;!! 2/Since ATC is publicly traded, they want to protect their assets from future ground rights uncertainty. BUD!jt!bnpoh!uif!upq!uxp!upxfs!dpnqbojft!jo!uif!dpvousz! boe!jt!qvcmjdmz!usbefe/!Uifz!xbou!up!qspufdu!uifjs!bttfut!gspn!gvuvsf!hspvoe!sjhiut! vodfsubjouz. vqpo!uif!gvuvsf!qspkfdujpo!pg!xjsfmftt!jodpnf!gspn!uif!pqfsbujpo!pg!uifjs!upxfst-!uif! tupdl!nbslfu!bobmztut!xip!dpwfs!upxfs!tupdlt!gpdvt!po!uif!mfohui!pg!ujnf!uibu!upxfs! dpnqbojft!dpouspm!uif!sjhiut!up!uif!upxfs0tjuf!po!uif!voefsmzjoh!hspvoe/!Cz!opu! dpouspmmjoh!uif!hspvoe!sjhiut-!uif!upxfs!dpnqbojft!bsf!Tvckfdu!Tjuf!up!jodsfbtfe!hspvoe! mfbtf!fyqfotft!jo!uif!gvuvsf-!ps-!npsf!jnqpsuboumz-!up!ufsnjobujpo!pg!uif!hspvoe!mfbtf! foujsfmz!)xijdi!xpvme!ofhbuf!uif!jodpnf!dpnqmfufmz*/!! 3/Tower companies want to lock in their leases with landowners so that third-party Jo!uif!mbtu!dpvqmf!pg!zfbst-!b!ovncfs!pg! mfbtf!cvzpvu!dpnqbojft!ibwf!cffo!dsfbufe!tpmfmz!gps!uif!qvsqptf!pg!qvsdibtjoh! hspvoe!mfbtft!voefs!upxfst!)zpv!nbz!ibwf!fyqfsjfodfe!b!ovncfs!pg!tvdi!dpnqbojft! fyqsfttjoh!bo!joufsftu!jo!uif!cvzpvu!pg!uif!BUD!Mfbtf*/!Uiftf!dpnqbojft!ibwf! qvsdibtfe!pwfs!6-111!mfbtft!boe!dpouspm!uiptf!mfbtft!hpjoh!gpsxbse/!Cfdbvtf!uifz!bsf! npsf!lopxmfehfbcmf!sfhbsejoh!mfbtf!sbuft!uibo!nptu!mboepxofst-!uif!mfbtf!cvzpvu! dpnqbojft!dpvme!qpufoujbmmz!ofhpujbuf!tjhojgjdboumz!hsfbufs!jodsfbtft!jo!uif!mfbtf!bu!uif! mfbtf!fyqjsbujpo!uibo!uif!mboepxofs!njhiu!puifsxjtf!bhsff!up/!Gvsuifsnpsf-!uiftf!mfbtf! cvzpvu!dpnqbojft!dsfbuf!bo!beejujpobm!benjojtusbujwf!cvsefo!up!uif!upxfs!dpnqbojft-!bt! uifz!bsf!b!uijse!qbsuz!jo!uif!mboepxofs0upxfs!dpnqboz!frvbujpo/! 4/Wireless carriers prefer to co-locate on towers with ample time left on their ground leases. Tpnf!pg!uif!. tvcmfbtf!bu!b!tjuf*!xjmm!opu!bhsff!up!ep!tp!vomftt!uifz!bsf!sfbtpobcmz!bttvsfe!uibu!uifjs! jowftunfou!xjmm!cf!uifsf!mpoh!fopvhi!up!kvtujgz!nbljoh!b!mpoh.ufsn!dpnnjunfou/!Jg!uif! hspvoe!mfbtf!xjui!uif!mboepxofs!jt!tfu!up!fyqjsf!jo!621!zfbst!)bt!jo!zpvs!dbtf*-!uibu!jt! opu!fopvhi!ujnf!gps!b!xjsfmftt!dbssjfs!up!hfu!cbdl!uifjs!tjhojgjdbou!jowftunfou!jo!b!tjuf-! boe!uifz!nbz!dipptf!bopuifs!mpdbujpo/!Cz!uzjoh!vq!mpoh.ufsn!hspvoe!sjhiut-!upxfs! dpnqbojft!ifmq!tfdvsf!beejujpobm!sfwfovf!ps!nbjoubjo!dvssfou!sfwfovft!po!uifjs!upxfst/!! 5/Relocating these towers can be very expensive.!Sfmpdbujpo!pg!b!upxfs0tjuf!dbo! dbvtf!tjhojgjdbou!)boe!voxboufe*!ofuxpsl!jttvft!gps!uif!dbssjfst/!Upxfs!dpnqbojft! 103 8 ibwf!mfbtf!bhsffnfout!dpwfsjoh!uipvtboet!pg!upxfs0tjuft!bdsptt!uif!V/T/!Tjodf!uifz! xbou!up!sfubjo!qptjujwf!sfmbujpotijqt!xjui!bmm!uifjs!dbssjfst!)boe!Tqsjou!bu!uif!Tvckfdu! Tjuf!!xip!bmtp!tvcmfbtft!po!uipvtboet!pg!puifs!upxfst!BUD!pqfsbuft*-!BUD!nbz!cf! cvzpvu!ps!fyufotjpo!pggfst!jo!psefs!up!fotvsf!uibu!uif! dbssjfst!xjmm!gffm!tfdvsf!jo!uifjs!tjhojgjdbou!jowftunfou!up!mfbtf!upxfs!tqbdf!gspn!uifn! qsftfoumz-!boe!jo!uif!gvuvsf/!! B. Carrier Coverage and Site Goals Uif!nbjo!pckfdujwf!xifo!dipptjoh!uijt!tjuf!mpdbujpo!jt!up!qspwjef!dpwfsbhf!up! xjsfmftt!bdujwjuz!gps!usbwfmfst!po!J.46X-!Mblf!Esjwf-!Mpwfmm!Se-!boe!Dpvousz!Se!K/!Uif!Tjuf! bmtp!qspwjeft!dpwfsbhf!up!uif!dpnnfsdjbm!boe!sftjefoujbm!bsfbt!bspvoe!uif!Tvckfdu!Tjuf- ftqfdjbmmz!up!uif!opsui!boe!fbtu-!boe!bt!gbs!xftu!bt!J.46X/Xjui!uif!fwfs.jodsfbtjoh! wpmvnf!pg!xjsfmftt!bdujwjuz-!uijt!Tjuf!cfdpnft!fwfo!npsf!tjhojgjdbou!up!uif!dbssjfst!boe! uifjs!bcjmjuz!up!dpoujovf!qspwjejoh!5H!MUF!dpwfsbhf!up!dvtupnfst!usbwfmjoh-!mjwjoh-!wjtjujoh- boe!xpsljoh!jo!uif!bsfb/!Gps!BUD-!uif!Tjuf!jt!wbmvbcmf!gspn!b!dvtupnfs!tfswjdf!tuboeqpjou<! gbdjmjubujoh!!eftjsft!up!dpoujovf!pqfsbujoh!gspn!uif!Tjuf!jt!uifjs!qsjnbsz!pckfdujwf/! Uiftf!tvcufobout!jodmvef!Wfsj{po!boe!U.Npcjmf/!Cfmpx!zpv!xjmm!gjoe!bdpwfsbhf!nbq!gps! fbdi!dbssjfs!pqfsbujoh!bu!uif!Tvckfdu!Tjuf-!bmpoh!xjui!b!tipsu!fyqmbobujpo/! 1. Verizon Wfsj{po!jt!dvssfoumz!uif!mbshftu!V/T/!dbssjfs!)ofdl!up!ofdl!xjui!BU'U*-!tfswjoh!bqqspyjnbufmz! 258/3!7/6!njmmjpo*!obujpoxjef/!Bddpsejoh!up! njmmjpo!Bnfsjdbot!):9&!pg!uif!VT!qpqvmbujpo*/!! Some Key Metrics Regarding Verizon: Number of Subscribers:258/3!njmmjpo Number of Cell Sites:62-611 Major Acquisitions:Djodjoobuj!Cfmm!3125<!Dfoufoojbm!Dpnnvojdbujpot!311:<!NDJ! 3116! Current Goals:.pvu!opx!dpwfst!uif!wbtu!nbkpsjuz!pg!uif! dpvousz-!uif!ofyu!qibtf!jt!gps!uif!dpnqboz!up!jodsfbtf!dbqbd djujft-!cz!epvcmjoh!ps!usjqmjoh!uif!ovncfspg!dbmmt!uibu!dbo!cf!iboemfe!bu!boz!hjwfo!ujnf/! Ju!xjmm!ep!uijt!cz!bvhnfoujoh!jut!ofuxpsl!xjui!EBT!uibu!cfbn!tjhobmt!joup!ibse.up.sfbdi! qmbdft!mjlf!tvcxbzt/!Beejujpobmmz-!jo!nje.3126-Wfsj{po!ejwfstjgjfejut!dpsf!npcjmf! pggfsjoht!cz!mbvodijoh!Wpjdf!pwfs!MUF!bt!xfmm!bt!b!npcjmf!UW!tfswjdf/!Cpui!pg!uiftf! xjmm!ofdfttjubuf!npsf!dbqbdjuz!po!uif!bmsfbez!uftufe!fyjtujoh!ofuxpsl/ 104 9 OpenSignal Verizon Coverage Map -!qspwjefe!cz!dspxetpvsdfe!PqfoTjhobm-!joejdbuft!uibu!uifz!bsf! qspwjejoh!!dpwfsbhf!up!uif!tvsspvoejoh!bsfb/!TJUB!ibt!gpvoe!uibu!uif!dpwfsbhf!nbqt! Wfsj{po!qspwjeft!dbo!cf!fybhhfsbufe-!boe!tp!uif!dspxetpvsdfe!nbq!bcpwf!hjwft!b!npsf! sfmjbcmf!qjduvsf/!Uif!ofbsftu!dpogjsnfe!Wfsj{po!tjuf!jt!mpdbufe!2/8!njmft!up!uif!opsuifbtu/!Xf dbo!tbz!Wfsj{po!xpvme!ibwf!b!dpwfsbhf!efgjdju!jo!uif!jnnfejbuf!tvsspvoejoh!bsfbt!xjuipvu! uif!Tvckfdu!Tjuf!jg!uifz!dfbtfe!pqfsbujpot!ifsf!)xjuipvu!b!sfqmbdfnfou*/!Xf!ep!opu!fyqfdu! Wfsj{po!up!xjti!up!npwf!bozujnf!tppo/!! 2. T-Mobile U.Npcjmf!jt!dvssfoumz!uif!uijse.mbshftu!V/T/!dbssjfs-!bifbe!pg!Tqsjou/!! Some Key Metrics Regarding T-Mobile: Number of Subscribers: 84/:!njmmjpo Rank in Big Four:$4 Technology: HTN-!MUF Wi-Fi Offload: .Npcjmf!pggfst!Xj.Gj!Pggmpbe!gps!wpjdf!dbmmt!boe!ebub-!vtfe!cz!8! njmmjpo!pg!jut!tvctdsjcfst/!U.Npcjmf!jt!bmtp!xpsljoh!po!usjbmt!pg!MUF!Vomjdfotfe-!fobcmjoh! tvctdsjcfst!up!vtf!Xj.Gj!ipu!tqput!jotufbe!pg!dfmmvmbs!ebub!gps!wpjdf!dbmmt/!! Number of Sites:!69-111 New Sites in 2015: 611! Tower Sales: Jo!mbuf!3123-!U.Npcjmf!tvcmfbtfe!uif!sjhiut!pg!8-311!upxfst!up!Dspxo! Dbtumf!gps!%3/5!cjmmjpo/! Major Acquisitions: Xftufso!Xjsfmftt-!Pnojqpjou-NfuspQDT 105 : Lease Value: Ijhi! T-Mobile Coverage Map U.Fydfmmfou bspvoe!uif!Tvckfdu!Tjuf/!Bcpvu!b!njmf!xftu!pg!uif!Tvckfdu!Tjuf-!po!uif!gbs!tjef!pg!J.46-!uif! Uif!Tvckfdu!Tjuf!jt! joejdbufe!xjui!uif!xijuf!qvtiqjo!jo!uif!dfoufs!pg!uif!nbq-!boe!uif!bsfbt!pg!ebsl!qjol!bsf!uif! cftu!dpwfsbhf!U.Npcjmf!dbo!qspwjef/!U. opsuifbtu!po!b!xbufs!upxfs/!U.Npcjmf-!tjnjmbs!up!Wfsj{po-!xpvme!ibwf! b!dpwfsbhf!efgjdju!jo!uif!jnnfejbuf!tvsspvoejoh!bsfbt!xjuipvu!uif!Tvckfdu!Tjuf!jg!uifz!dfbtfe! pqfsbujpot!ifsf!)xjuipvu!b!sfqmbdfnfou*/!Xf!ep!opu!fyqfdu!U.Npcjmf!up!xjti!up!npwf!bozujnf! tppo!fjuifs/!! C. Co-location Opportunities and Subject Site Xfxjmm!csjfgmz!ejtdvtt!qpufoujbm!dp.mpdbujpo!qsptqfdut!boe!uif!mjlfmjippe!pg!xifuifs!uif! Tvckfdu!Tjuf!xjmm!fwfs!tff!buijse!ps!gpvsui!ufobou!dp.mpdbujpo!pqqpsuvojuz/!Tjodf!uif!Tvckfdu! Tjuf!dvssfoumz!ipvtft!uxp!pg!uif!Cjh!Gpvs!dbssjfst!)BU'U!boe!Wfsj{po*-!xf!dpotjefs!U.Npcjmf! boe!! 1. AT&T BU'U!jt!uif!tfdpoe.mbshftu!V/T/!dbssjfs!cfijoe!Wfsj{po/!Bt!pg!Efdfncfs!3127-!BU' MUF!ofuxpsl!dpwfsfe!436!njmmjpo!qpufoujbm!tvctdsjcfst!obujpoxjef!bdsptt!npsf!uibo511 nbslfut/!Sfdfoumz-!BU'U!ibt!cffo!gpdvtjoh!po!beejoh!dbqbdjuz!up!jut!fyjtujoh!ofuxpsl! jogsbtusvduvsf!boe!fyqboejoh!up!voefs.tfswfe!svsbm!bsfbt/ 106 21 Some Key Metrics RegardingAT&T: Subscribers:247/6njmmjpo Rank in Big Four:$3 Technology:DENB-!MUF Wi-Fi Offload:Opof!bt!pg!zfu New Sitesin 2016:2-1112-611-!xjui!nptu!tubsujoh!jo!uif!tfdpoe!ibmg!pg!3126 Tower Sales:Jo!Pdupcfs!3124-!BU'U!tpme!:-811!upxfst!up!DspxoDbtumf-!voefs!b! mfbtfcbdl!bhsffnfou/Jo!2:::-!Cfmm!Tpvui!)opx!qbsu!pg!BU'U*!tvcmfbtfe!2-961!upxfst! boe!bhsffe!up!bmmpx!Dspxo!Dbtumf!up!cvjme!611!npsf!upxfst!gps!ju/ Major Acquisitions:Bmmufm-!Dfoufoojbm-!Djohvmbs-!Dsjdlfu-!Epctpo Number of Cell Sites:78-111 Lease Value:Ijhi OpenSignal AT&T Coverage Map BU'U!dpwfsbhf!nbq-!qspwjefe!cz!dspxetpvsdfe!PqfoTjhobm-!joejdbuft!uibu!uifz!bsf!qspwjejoh! nptu!pg!uif!tvsspvoejoh!bsfb-!uipvhi!ju!jt!tipxjoh!xfblfs!dpwfsbhf! bmpoh!Mpxfmm!Spbe!up!uif!opsui!boe!tmjhiumz!sfevdfe!dpwfsbhf!up!uif!sftjefoujbm!bsfb!up!uif! tpvui!boe!tpvui!xftu/!Bt!xjui!Wfsj{po-!TJUB!ibt!gpvoe!uibu!uif!dpwfsbhf!nbq!uibu!BU'U! qspwjeft!dbo!cf!fybhhfsbufe-!boe!tp!uif!dspxetpvsdfe!nbq!bcpwf!hjwft!b!npsf!sfmjbcmf! qjduvsf/!Uijt!nbq!tvhhftut!uibu!BU'U!ibt!efdfou!dpwfsbhf!bmsfbez!bmpoh!J46X!boe!up!uif! opsuifbtu!boe!tpvui/!Uifsf!bsf!qpdlfut!tvsspvoejoh!uif!Tvckfdu!Tjuf!mpdbujpo!xifsf!BU'U! dpvme!tuboe!up!jnqspwf!uifjs!dpwfsbhf/!Uif!ofbsftu!dpogjsnfe!BU'U!tjuf!jt!po!b!xbufs!upxfs! 107 22 2/4!njmft!up!uif!opsuifbtu/!BU'U!jt!bmtp!mpdbufe!2/6!njmft!tpvui!po!b!Dspxo!Dbtumf!upxfs/!Xf! tvtqfdu!uifsf!jt!b!51&!dibodf!uibu!BU'U!nbz!cf!joufsftufe!bu!uijt!mpdbujpo!jo!uif!gvuvsf/! 2. Sprint Tqsjou!jt!dvssfoumz!uif!gpvsui.mbshftu!V/T/!dbssjfs-!ofdl!boe!ofdl!xjui!U.Npcjmf/!Jo!3125!R2-! Tqsjou!tubufe!uibu!ju!ibe!efqmpzfe!jut!5H!MUF!Tqbsl!Ofuxpsl-!xijdi!vujmj{ft!dbssjfs!bhhsfhbujpo! ufdiopmphz-!up!npsf!uibo! Qsfgfssfe!Qspwjefs!)sfhjpobm!qbsuofstijq npsf!uibo!49!njmmjpo!qpufoujbm!dvtupnfst!bdsptt!676-111!trvbsf!njmft!jo!38!tubuft/!! Tqsjou!nfshfe!xjui!Ofyufm!jo!3116!boe!ibt!tjodf!cffo!ufsnjobujoh!mfbtft!)qsjnbsjmz!Ofyufm! mfbtft*!evf!up!pwfsmbq!jo!uif!ofuxpsl/!Tqsjou!boe!U.Npcjmf!ibwf!kvtu!sfdfoumz!bhsffe!up!b! nfshfs!bt!xfmm/!Jg!uijt!nfshfs!ublft!qmbdf-!ju!xjmm!bmtp!sftvmu!jo!uif!dpotpmjebujpo!pg!sfevoebou! tjuft!cfuxffo!uif!uxp!dbssjfst-!boe!uif!cvml!pg!uiftf!ufsnjobujpot!xjmm!cf!Tqsjou!pqfsbujpot! bt!pqqptfe!up!U.Npcjmf!tjuft/!Bt!nfoujpofe-!ipxfwfs-!U.Npcjmf!boe!Tqsjou!xjmm!gjstu!ibwf!up! hbjo!bqqspwbm!gspn!uif!GDD!boe!Efqbsunfou!pg!Kvtujdf!cfgpsf!uijt!efbm!dbo!dpnf!up!gsvjujpo/! Nboz!joevtusz!fyqfsut!qsfejdu!uibu!uif!dibodft!pg!uijt!bqqspwbm!bsf!cfmpx!61&!cvu!nbz! jodsfbtf!jg!uif!dpnqbojft!bhsff!up!ejwftu!tpnf!pg!uifjs!tqfdusvn!ps!nbslfut!jo!uif!qspdftt/! Some Key Metrics Regarding Sprint: Subscribers:6:/8njmmjpo Rank in Big Four:$5 Technology: DENB-!XJNBY-!MUF Wi-Fi Offload: Jo!Gfcsvbsz!3124-!Tqsjou!beefe!b!Xj.Gj!dbmmjoh!gfbuvsf!po!jut!Boespje! qipoft-!fobcmjoh!tvctdsjcfst!up!vtf!Xj.Gj!ipu!tqput!jotufbe!pg!dfmmvmbs!ebub!gps!wpjdf! dbmmt/!! Number of Sites:!66-111! New Sites in 2015: Tqsjou!jt!sfqpsufe!up!ibwf!beefe!81-111!tnbmm!dfmmt/! Tower Sales: Jo!3119-!Tqsjou!tpme!4-411!)bmnptu!bmm*!pg!jut!dfmm!upxfst!up!UpxfsDp! voefs!b!mfbtfcbdl!bhsffnfou/!Jo!3116-!Tqsjou!tvcmfbtfe!7-111!upxfst!up!Hmpcbm!Tjhobm! )xip!xbt!bdrvjsfe!cz!Dspxo!Dbtumf!b!zfbs!mbufs*/! Major Acquisitions: Ofyufm-!Dmfbsxjsf-!Tqsjou!bggjmjbuft Lease Value: Ijhi! CftuTvckfdu!Tjuf-!xijmf!uif!rvbmjuz!pg! jut!dpwfsbhf!efHppetu!boe!gvsuifs!up!uif!opsuifbtu/Uif!bqqspyjnbuf! mpdbujpo!pg!uif!Tvckfdu!Tjuf!jt!joejdbufe!jo!uif!dfoufs!pg!uif!nbq!xjui!b!zfmmpx!bsspx/!Tqsjou!jt! mpdbufe!po!uif!xbufs!upxfs!mpdbufe!/4!njmft!up!uif!opsuifbtu/!Bu!uijt!qpjou-!xf!uijol!uif! mjlfmjippe!pg!Tqsjou!sfmpdbujoh!up!uif!Tvckfdu!Tjuf!jt!mpx/! 108 23 Sprint Coverage Map D. Key Findings Bgufs!sfwjfxjoh!dbssjfs!nbqt!boe!pvs!qspqsjfubsz!ebub-!TJUB!cfmjfwft!uibu!ju!jt!vomjlfmz! Wfsj{po!boe!U.Npcjmf!xjmm!xjti!up!sfmpdbuf!bxbz!gspn!uif!jnnfejbuf!wjdjojuz!pg!uif!Tvckfdu! Tjuf/Uifz!bsf!tusjwjoh!up!nffu!dpwfsbhf!pckfdujwft!boe!nbjoubjo!dpnqfujujwfoftt!jo!bo!bsfb! xifsf!bmm!pg!uif!Cjh!Gpvs!dbssjfst!bsf!vq!boe!pqfsbujoh/!Jo!gbdu-!uif!bctfodf!pg!uif!Tvckfdu! Tjuf!)ps!bo!bmufsobujwf!tjuf!xjuijo!b!¾.njmf!sbejvt*!xpvme!wfsz!mjlfmz!ejnjojti!boe!dsfbuf!xfbl! dpwfsbhf!qbudift!jo!uijt!bsfb!gps!uiftf!dbssjfst/!Cfbs!jo!njoe!uibu!dbssjfs!tjuft!bsf! tusbufhjdbmmz!tjuvbufe!up!qspwjef!vojoufssvqufe!dpwfsbhf!up!uifjs!dvtupnfst-!qbsujdvmbsmz!jo! bsfbt!xifsf!uifjs!tvctdsjcfst!ibwf!dpnf!up!sfmz!vqpo!gbtu!tqffet!boe!tfbnmftt! dpoofdujpot/!Jo!gbdu-!ju!jt!tbgf!up!tbz!uibu!uif!pckfdujwf!ifsf!jt!up!jnqspwf!)opu!epxohsbef*! dpwfsbhf/!Bddpsejohmz-!TJUB!dpodmveft!b!mpx!sjtl!pg!ufsnjobujpo!bttpdjbufe!xjui! tvcmfbtft/!! Po!uif!dp.mpdbujpo!tjef-!BU'U!ibt!bqpttjcmf!offe!gps!jnqspwfe!dpwfsbhf-!xijdi!dpvme!cf! beesfttfe!cz!mpdbujoh!po!uif!Tvckfdu!Tjuf/!Tqsjou!jt!mpdbufe!po!b!xbufs!upxfs!jnnfejbufmz! opsui!pg!uijt!tjuf-!boe!xf!cfmjfwf!ju!vomjlfmz!uibu!uifz!xpvme!fwfo!dpotjefs!up!dp.mpdbujoh!bu!uif! Tvckfdu!Tjuf/!Mbtumz-!jg!uif!qsfwjpvtmz!nfoujpofe!Tqsjou0U.Npcjmf!nfshfs!xfsf!up!fwfs!gvmmz!ublf! qmbdf-!xf!xpvme!fyqfdu!uif!dpncjofe!dpnqboz!up!lffq!uif!Tvckfdu!Tjuf!cvu!opu!uif!ofbscz! 109 24 IV. EXISTING COMPETING STRUCTURES AND COST OF RELOCATION A. Competing Structures Dpnqfujoh!tusvduvsft!bsf!uiptf!fyjtujoh!upxfst!ps!tusvduvsft!xifsf!dbssjfst!dbo!cf!sfmpdbufe! poup!uibu!nffu!tjnjmbs!bsfb!pckfdujwft!bt!uif!Tvckfdu!Tjuf/!Tvdi!ebub!bmtp!nbz!qspwjef! jogpsnbujpo!bt!up!uif!mpdbujpo!boe!jefoujuz!pg!dfmm!tjuf!pxofst!boe!dbssjfst!pqfsbujoh!jo!b!hjwfo! bsfb/!Jo!fybnjojoh!uif!Dpnqfujoh!Tusvduvsf!Nbq!cfmpx-!xf!bsf!mppljoh!bu!bmm!lopxo! dpogjsnfe!tusvduvsft!xjuijo!b!6.njmf!sbejvt!pg!uif!Tvckfdu!Tjuf!)xjui!b!sfe!djsdmf!qmbdfe!bu!uif! ¾-!2-boe!3.njmf!nbslt*/!Hjwfo!dpwfsbhf!pckfdujwft-!boz!fyjtujoh!tjuf!xpvme!offe!up!cf!xjuijo! b¾njmf!up!qspwjef!dpnqbsbcmf!dpwfsbhf!up!uibu!dvssfoumz!hbjofe!gspn!uif!Tvckfdu!Tjuf/!! Competing Structures Map Vqpo!sfwjfx!pg!uif!Nbq-!zpv!xjmm!tff!uibu!uifsf!bsf!op!puifs!upxfst!xjuijo!2!njmf!pg!uif! Tvckfdu!Tjuf/!Uif!ofbsftu!upxfs!jt!mpdbufe!2/4!njmft!up!uif!tpvuixftu/!Uifsf!bsf!uxp!xbufs! upxfst!xjui!dfmmvmbs!frvjqnfou!po!uifn!mpdbufe!/4!njmft!up!uif!opsuifbtu!boe!2/4!njmft!up!uif! opsuifbtu/!Except for the nearest water tower, none of these structures would suffice for - 110 25 B. Cost of Relocation Sfmpdbujpo!dptut!dbo!cfdpnf!fyusfnfmz!fyqfotjwf!boe!ep!jogmvfodf!efdjtjpot!up!npwf! ftqfdjbmmz!xifo!dpotusvdujoh!b!ofx!upxfs!boe!npwjoh!fyjtujoh!nvmuj.dbssjfs!frvjqnfou! )xjuipvu!dbvtjoh!boz!joufssvqujpot!up!dbssjfs!dpwfsbhf*/!It could cost a minimum of $500,000 to move the carriers to a new tower, given construction, improvements, and logistic plans.!Ju!xpvme!dptu!bspvoe!%311-111!up!cvjme!b!ofx!upxfs!boe!bu!mfbtu!%236-111!fbdi!gps! Wfsj{po!boe!U.Npcjmf!up!jotubmm!ofx!dbssjfs!frvjqnfou!po!uif!ofx!tjuf/!Podf!uif!ofx!upxfs!jt! cvjmu!boe!Wfsj{po!boe!BU'U!bsf!vq!boe!pqfsbujoh!bu!uif!ofx!tjuf-!uif!fyjtujoh!mfbtf!bu!uif! Tvckfdu!Tjuf!upxfs!dbo!cf!ufsnjobufe!boe!uif!frvjqnfou!sfnpwfe/!Ju!xpvme!dptu! bqqspyjnbufmz!%61-111!up!sfnpwf!uif!fyjtujoh!upxfs!boe!sftupsf!uif!qspqfsuz!up!qsf.mfbtf! dpoejujpot/!! Ju!xpvme!dptu!%311-111!up!%361-111!gps!cpui!U.Npcjmf!boe!Wfsj{po!up!npwf!up!uif!bekbdfou! xbufs!upxfs/!Ipxfwfs-!jg!uijt!pddvssfe-BUD!xpvme!mptf!uifjs!upxfs!boe!xpvme!ibwf!op! sfwfovf!up!tipx!gps!ju-!bt!uif!mfbtf!qbznfout!xpvme!hp!up!uif!xbufs!upxfs!pxofs/!Jo!puifs! xpset-!uifsf!jt!op!jodfoujwf!gps!BUD!up!dpotjefs!npwjoh!jut!ufobout!up!uif!xbufs!upxfs/! C. Key Findings Qfs!pvs!sfwjfx!pg!dpnqfujujwf!tusvduvsft!boe!sfmpdbujpo!fyqfotft-!uifsf!bqqfbst!up!cf!b!mpx! sjtl!pg!mfbtf!ufsnjobujpo!bu!uif!Tvckfdu!Tjuf/!Xjui!,0.!3!zfbst!sfnbjojoh!voujm!fyqjsbujpo!boe!b! mbdl!pg!tvjubcmf!bmufsobujwft-!BUD!jt!jodfoujwj{fe!up!fyufoe!uijt!mfbtf!xjui!zpv/!! V. VALUE OF TOWER TO ATC A. Profit/Loss to ATC Up!efufsnjof!uif!wbmvf!pg!uif!Tvckfdu!Tjuf!up!BUD-!xf!ftujnbufe!uif!sfwfovf!boe!qspgju!cfjoh! hfofsbufe/!Qmfbtf!tff!cfmpx!gps!pvs!ftujnbuf!pg!fyqfotft!boe!jodpnf!gps!uijt!BUD!upxfs/! Uif!dbssjfst!bsf!qbzjoh!cfuxffo!%3-611!boe!%4-6110np/!up!tvcmfbtf!)dp.mpdbuf*!po!uif!upxfs/! Jo!beejujpo!up!qbzjoh!%2-7690np/!bt!sfou!gps!uif!hspvoe!Mfbtf-!BUD!bmtp!jodvst!%2-6780np/!gps! b!dpotfou!qbznfou!boe!spvhimz!%2860np/!jo!fyqfotft!gps!hfofsbm!boe!benjojtusbujwf! fyqfoejuvsft/!Cbtfe!vqpo!pvs!ftujnbuft-!BUD!dvssfoumz!hfofsbuft!bqqspyjnbufmz!%2:-311!up %77-123!qfs!zfbs!jo!qspgjut!gspn!uijt!upxfs/!Uif!tdfobsjpt!bsf!csplfo!epxo!joup!Xpstu!Dbtf Cftu!DbtfBeejujpobm!Ufobou qbznfout!bu!uif!mpxfs!foe!pg!uif!tdbmf!)%3-6 bu!uif!ijhifs!foe!pg!uif!tdbmf!)%4-6110np/*-!xijmf!uif!Beejujpobm!Ufobou!tipxt!xibu!xpvme! ibqqfo!jg!BU'U!ps!bopuifs!dbssjfs!xbt!jodmjofe!up!vtf!uijt!upxfs/!Uijt!jt!dvssfoumz!b!sfwfovf. hfofsbujoh!tjuf!gps!BUD/!Tp!zpv!dbo!tff!uif!jnqbdu!pg!b!uijse!dbssjfs!tipvme!BUD!cf!bcmf!up! csjoh!pof!)tvdi!bt!BU'U*!ifsf<! tdfobsjp!bt!xfmm-!jo!xijdi!BUD!dpvme!hfofsbuf!%66-3110zfbs!jo!qspgju/!! 111 26 ATC Tower Projection Chart ANNUAL INCOME PROJECTIONS IncomeWorst CaseBest CaseAdditional Tenant UfoboutNpouimzBoovbmmzNpouimzBoovbmmzNpouimzBoovbmmz U.Npcjmf%3-611%41-111%4-611%53-111%4-611%53-111 Wfsj{po%3-611%41-111%4-611%53-111%4-611%53-111 BU'U%1%1%1%1%3-611%41-111 HSPTT%6-111%71-111%8-111%95-111%:-611%225-111 FYQFOTFT Jotvsbodf%61%711%61%711%61%711 Nbjoufobodf%61%711%61%711%61%711 Qspqfsuz!Uby%86%:11%86%:11%86%:11 Mboe!Mfbtf%2-769%2:-9:7%2-769%2:-9:7%2-769%2:-9:7 Dpotfou!Qbznfou%2-678%29-915%2-678%29-915%2-678%29-915 Fmfdusjdjuz%1%1%1%1%2-611%29-111 OFU!FYQFOTF%4-511%51-911%4-511%51-911%5-:11%69-911 OFU!QSPGJU!UP! PXOFS $1,600$19,200$3,600$43,200$4,600$55,200 Bopuifs!xbz!pg!mppljoh!bu!uif!wbmvf!pg!bo!fyufotjpo!jt!up!dpnqbsf!boe!bobmz{f!uif!qspgjut!uibu! BUD!xjmm!cf!tfdvsjoh!cz!mjnjujoh!hspvoe!sfoubm!sbuf!jodsfbtft!pwfs!bo!fyufoefe!qfsjpe!pg!ujnf/ Jo!puifs!xpset-!cz!fyufoejoh-!BUD!qvut!uifntfmwft!jo!bo!jnnfejbuf!qptjujpo!up!dpmmfdu!uif! Tvckfdu!Tjuf!qspgjut!gps!nboz!zfbst!up!dpnf/!Tjodf!uifsf!bsf!,0.!3!zfbst!mfgu!po!uif!fyjtujoh! mfbtf-!BUD!offet!up!fyufoe!uijt!mfbtf!ps!qpttjcmz!gbdf!uif!mptt!pg!uif!upxfs!boe!dvssfou!boe! gvuvsf!qspgju/! 112 27 VI.!!LEASE RATES ANALYSIS A. Average Comparable Lease Rates Xf!rvfsjfe!pvs!ebubcbtf!up!gjoe!dpnqbsbcmf!mfbtft!jo!psefs!up!efufsnjof!uif!bwfsbhf! npouimz!sfou!qbje!gps!hspvoe!tqbdf!mfbtft!jo!uif!bsfb/!Xf!gpvoe!24!dfmm!tjuf!mfbtft!ujfe!up! hspvoe!mfbtft!mpdbufe!xjuijo!b!21.njmf!sbejvt!pg!uif!Tvckfdu!Tjuf/!Uif!sftvmut!bsf!cfmpx;! Bt!zpv!dbo!tff-!uif!hspvoe!tqbdf!sfoubm!bnpvou!pg!%2-7690np/!uibu!BUD!dvssfoumz!qbzt!jt! bcpwf!uif!bsfb!bwfsbhf!pg!%2-1820np/!cz!%6980np/!Uif!mfbtft!jo!pvs!ebubcbtf!sbohfe!gspn! %5590np/!up!%2-8390np/!Jodmvejoh!uif!Dpotfou!boe!Vtf!qbznfou!gspn!BUD-!uif!npouimz! qbznfou!bnpvou!xpvme!upubm!%43360np/-!xijdi!jt!ofbsmz!epvcmf!uif!ijhiftu!dpnqbsbcmf!mfbtf!jo! pvs!dpnqbsbcmf!ebub/!Po!bwfsbhf-!vojrvf!tjuf!mpdbujpot!boe!op!dpnqfujujpo!dbo!dpnnboe! ijhifs!sfout/!Beejujpobmmz-!mfbtft!uibu!ibwf!ftdbmbufe!nvmujqmf!ujnft!boe!jodsfbtfe!gspn! fyufotjpot!pwfs!uif!zfbst!xjmm!ibwf!b!ijhifs!sfou!uibo!ofxfs!mfbtft!uibu!ibwf!zfu!up!ep!tp/! Sfhbsejoh!ftdbmbujpo!sbuft-!TJUB!tfft!nptu!mfbtft!ftdbmbujoh!bu!bspvoe!4&!boovbmmz!)ps!26&! fwfsz!gjwf!zfbst!ps!ufsn!xifo!dpnqpvoefe*/! 113 28 B. Tower Company Comparable Lease Extension Offers 1. ATC Lease Comparable Extension Jo!bttfttjoh!uif!fyufotjpo!wbmvf!pg!uif!Tvckfdu!Tjuf!Mfbtft-!TJUB!sfwjfxfe!fyufotjpo!pggfst! nbef!cz!nbkps!upxfs!pxofst!!gpdvtjoh!po!uxp.dbssjfs!tjuft!xjui!btjnjmbs!dvssfou!mfbtf!sbuf! boe!tjnjmbs!ujnf!sfnbjojoh!voujm!fyqjsbujpo/!Uiftf!gbdupst!xfsf!diptfo!up!tff!xibu!jnqbdu!)jg! boz*!fbdi!dpvme!ibwf!po!fyufotjpo!pggfst/!Up!qvu!ju!tjnqmz-!ep!boz!pg!uiftf!gbdupst!)tfqbsbufmz! ps!uphfuifs*!qspwjef!jotjhiu!bt!up!uif!wbmvbujpo!pg!fyufotjpo!pggfst!gps!tjnjmbs!tjuft@!Uif!sftvmut! bsf!tipxo!cfmpx/!! Comparable Extension Chart Uif!bcpwf!dibsu!gpdvtft!po!fyufotjpo!efbmt!uibu!bsf!tjnjmbs!up!uibu!pg!uif!uxp.dbssjfs!Tvckfdu! Tjuf/!Jo!sfwjfxjoh!uif!Dpnqbsbcmf!Fyufotjpo!Dibsu-!xf!tff!uibu!upxfs!dpnqbojft!)xifo! ofhpujbufe*!jodsfbtf!sbuft!po!bwfsbhf!up!%2-:740np/!gps!b!uxp.dbssjfs!dfmm!tjuf/!Jo!beejujpo!up! jodsfbtjoh!sbuft-!xf!gpvoe!tjhojoh!cpovtft!up!cf!jodmvefe!jo!gpvs!pg!uif!fyufotjpo!efbmt-!xjui! bo!bwfsbhf!tjhojoh!cpovt!pg!%8-254/!Mbtumz-!uif!bwfsbhf!fyufotjpo!qfsjpe!jt!38/25!zfbst! )sbohjoh!gspn!26!up!51!zfbst*/!! Qmfbtf!opuf!uibu!uif!ijhiftu!tjhojoh!cpovt!bcpwf!jodmvefe!uif!mpxftu!qfsdfoubhf!jodsfbtf!jo! mfbtf!sbuf!boe!uif!mpohftu!fyufotjpo!ufsn!pg!uif!tbnqmf/!Upxfs!dpnqbojft!xjmm!bu!ujnft!usz!up! ufnqu!uif!mboepxofs!joup!tjhojoh!b!mpohfs!fyufotjpo!ufsn!ps!b!mpx!fyufotjpo!mfbtf!sbuf!pggfs!cz! pggfsjoh!b!ijhi!tjhojoh!cpovt/!Cz!epjoh!uijt-!uif!upxfs!dpnqboz!dbo!qbz!b!pof.ujnf!dbqjubm! jowftunfou!gps!mpxfs!sjtl!pg!b!mpohfs!mfbtf!ufsn!ps!bt!pqqptfe!up!qbzjoh!ijhifs!sfou!boe-!uivt-! jodsfbtjoh!uifjs!pohpjoh!sfoubm!fyqfotft/!Bmpoh!uiftf!tbnf!mjoft-!opujdf!uibu!uif!uisff!ijhiftu! sfoubm!sbuft!qbje!bcpwf!bsf!bmtp!uif!uisff!efbmt!uibu!eje!opu!jowpmwf!b!tjhojoh!cpovt!bu!bmm/!! Sfwfovf!tibsf!xbt!pggfsfe!jo!gjwf!pg!uif!bcpwf!efbmt!)jo!uif!sbohf!pg!26&!up!41&*/!Upxfs! dpnqbojft!xjmm!tpnfujnft!pggfs!bsfwfovf!tibsf!up!usz!up!txffufo!uif!efbm-!cvu!pgufo!uifz!nblf! tvdi!pggfst!xifo!ju!jt!mftt!mjlfmz!uibu!b!ofx!dbssjfs!xjmm!dpnf!up!uif!tjuf!bozipx/!Bt!xf! ejtdvttfe!qsfwjpvtmz-!pomz!pof!sfnbjojoh!Cjh!Gpvs!dbssjfs!)BU'U*!dpvme!jnqspwf!uifjs!dpwfsbhf! cz!dp.mpdbujoh!bu!uif!Tvckfdu!Tjuf/!Tjodf!uif!fyjtujoh!dpotfou!bhsffnfou!qspwjeft!uibu!BUD! nvtu!hbjo!zpvs!dpotfou!up!dp.mpdbuf!beejujpobm!ufobout!po!uif!upxfs-!uifsf!jt!op!sfbtpo!up! dpotjefs!b!sfwfovf!tibsf!ifsf!jo!mjfv!pg!uif!dpotfou!qspwjtjpo/! 114 29 VII.!!RECOMMENDATION A. Lease Extension Jo!sfwjfxjoh!Tjuf!mpdbujpo<!hpwfsonfoubm!sfhvmbujpot<!fyjtujoh!dpnqfujoh!tusvduvsft0! bmufsobujwft<!boe!dptut!pg!sfmpdbujpo!)bmpoh!xjui!dbssjfs!dpwfsbhf!pckfdujwft*-!xf!gjoe!uif!sjtl! pg!ufsnjobujpo!pg!uif!Mfbtf!up!cf!mpx/! Hjwfo!uif!bnpvou!pg!ujnf!sfnbjojoh!po!uif!mfbtf!),0.!3!zfbst*-!uif!mbdl!pg!dpnqfujoh! tusvduvsft!jo!uif!jnnfejbuf!wjdjojuz-!uif!mbdl!pg!fbtz!bmufsobujwf!tjuft-!boe!uif!fyqfotf!pg! sfmpdbujpo-!xf!tff!op!sfbtpo!gps!BUD!up!dpotjefs!bozuijoh!fydfqu!sfnbjojoh!bu!uif!tjuf!gps! uif!mpoh!ufsn/! BUD!jt!svoojoh!pvu!pg!ujnf!up!fyufoe!uijt!mfbtf/!Ipxfwfs-!uifz!bsf!bmtp!qbzjoh!bcpwf!nbslfu! sfou/!Bddpsejohmz-!xf!xpvme!bewjtf!fyufoejoh!uif!hspvoe!mfbtf!bu!uif!dvssfou!gjobodjbm!ufsnt! xijmf!lffqjoh!uif!dpotfou!bhsffnfou!jo!qmbdf!bt!jt/! fyufoefe-!bt!ju!jt!dpufsnjopvt!xjui!uif!mfbtf*/!Xf!bmtp!sfdpnnfoe!uif!gpmmpxjoh!ufsnt;! 21.zfbs!mfbtf!fyufotjpo! 21.zfbs!sfou!hvbsbouff!cfhjoojoh!vqpo!fyfdvujpo!pg!fyufotjpo!bhsffnfou/! !Tjhojoh!cpovt!pgfyufotjpo!pg!uif! mfbtf/!! !Ep!opu!bhsff!up!beejujpobm!mbohvbhf!gspn!BUD!tvdi!bt!dpogjefoujbmjuz-!sjhiu!pg! gjstu!sfgvtbm-!qpxfs!pg!buupsofz!mbohvbhf-!fud/!Uif!fyufotjpo!tipvme!cf! tusbjhiugpsxbse!boe!tjnqmf!!nfsfmz!fyufoejoh!uif!ufsnt!bmsfbez!jo!qmbdf/!! B. Conclusion Jg!ju!cfdpnft!ejggjdvmu!up!hfu!BUD!up!nffu!ps!bu!mfbtu!dpnf!wfsz!dmptf!up!uif!sfdpnnfoefe! fyufotjpo!ufsnt!bcpwf-!xf!tvhhftu!opu!epjoh!bozuijoh/!Xjui!uif!Mfbtf!dvssfoumz!ibwjoh!,0.!3! zfbst!pg!ufsn!sfnbjojoh-!BUD!xjmm!fjuifs!offe!up!gjoe!bo!bmufsobujwf!tjuf!)xijdi!xjmm!cf!tvcnjuufe! up!boe!sfwjfxfe!cz!uif!Djuz!voefs!uif!{pojoh!dpef*!ps!bhsff!up!uif!ufsnt!qptfe!bcpwf/! Podf!zpv!sfdfjwf!vqebufe!pggfst-!qmfbtf!dpoubdu!nf!bu!)977*!656.:4:8!boe!xf!xjmm!bewjtf!zpv! po!uif!cftu!tufq!gpsxbse/!Uibol!zpv!gps!zpvs!ujnf/!J!ipqf!zpv!ibwf!gpvoe!uijt! Tjodfsfmz!zpvst-! Ken Schmidt- President Steel in the Air, Inc. 8337 Oswego Road Baldwinsville, NY 13027 (866) 545-9397 115 2: 116 117 118 119