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City of Roseville, Minnesota TIF District No. 17: Twin Lakes Apartment LLC Proposed Project October 16, 2012 Page 4 • 80% increment pledged to developer • Maximum term of redevelopment district (26 total years) o Approximately 17 years remaining following construction Tax Increment Revenue Estimates The developer's initial request for assistance was in an amount greater than what was projected to be available from the district over the remaining term. Based on the assumptions outlined above, the projected tax increment revenues to be generated from the project are shown in the chart on the following page. The estimated present value of available revenues may range from $1,984,992 to $2,195,915, depending on the annual market value inflator. Scenario 1 Scenario 2 Annual Market Value Inflator 0% 1.5% Total Gross Tax Increment $3,960,851 $4,443,701 Cit Retaina e 20% $792,164 $888,738 Net Amount Remainin 80% $3,168,687 $3,554,963 Present Value — Cit Retaina e $496,240 $548,977 Present Value — Remainin 80% $1,984,992 $2,195,915 Developer Proforma But-For Analysis In approving a TIF district and project, the City must make several findings, including the "but for" test: that the proposed development would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future. The developer has provided a"but-for" argument stating that the developer's lender has indicated that financial assistance from the City is necessary to provide sufficient project cash flow and market returns to investors that will achieve project feasibility. The developer states the assistance is necessary to construct the project as proposed based on current financial indicators. Based on the developer's stated position relative to the need for tax increment financing assistance, the City could make its "but for" finding and provide tax increment assistance. We recommend, however, that the City also consider an appropriate level of TIF assistance for the project based on the information submitted by the developer. The City's position relative to the use of tax increment has typically been to finance extraordinary costs and level the playing field of potential redevelopment sites. The level of assistance is in part dictated by the 'extraordinary' costs of the project. Initial discussions about the project indicate the assistance would be provided as reimbursement to assist the developer with extraordinary redevelopment costs of the project site. Following thorough evaluation of the project, the City will be prepared to make an informed "but-for" decision based on the likelihood of the project needing assistance, as well as the appropriate level of assistance. The "but-for" test is