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<br />refine bond numbers further. The present value approach provides a preliminary <br />overview of potentially available funds. <br /> <br />. An assumption that some combination of the City, County, State, Met Council and <br />federal government will invest an aggregate of $6 million in an SO-acre, $250 million <br />urban renewal redevelopment project does not seem unreasonable. Applications <br />must be made through several grant cycles over several years. However, the <br />availability of grants is always subject to speculation. <br /> <br />Conclusion <br /> <br />Under current City guidelines and directives the developer, not the City, must advance <br />nearly all of the $65 million redevelopment costs. The developer's risks include cost and <br />timing of land acquisition, resale value of the land, interest rates, market value of the finished <br />product, class rate changes mandated by the State, tax rate changes, environmental costs, <br />inflation rates, underwriting criteria (debt service reserves, discounts and costs of issuance) <br />and general economic conditions (such as housing demand, mortgage rates, holding period <br />costs and timing of each phase). <br /> <br />Based on the City's August 9, 2004 directives, if the improvements are not constructed there <br />will be no revenues with which to pay the developer's costs. Debt service on tax increment <br />revenue bonds is payable only from tax increment from the project itself and are not general <br />obligations of the City. In fact, Tl bonds will not be issued unless the bonds have been fully <br />guaranteed by the developer or the improvements have been completed. <br /> <br />Based on the assumptions described above, the project is financially feasible. <br /> <br />G:\WPDATA\R\ROSEVILLE\15\COR\BENNETTWELSCH MILLER BEETS 01.DOC <br /> <br />. Page 4 <br />