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The following gap strategies are not being used: <br />No general obligation bonds <br />No special assessments <br />No fiscal disparity costs to City taxpayers (fiscal disparities are taken from <br />within the district) <br />The Sources and Uses assumes a development project comprised of 730 housing units and <br />552,713 sq. ft. of C/I (221,150 sq. ft. office and 331,563 sq. ft. commercial). The <br />development occurs on approximately 80 acres. Line 1 indicates that the City would retain <br />5% of the tax increment generated. This reduced amount is part of the gap strategy, but it <br />still generates approximately $3.6 million for the City. The assumed inflation rate is 2.5%. <br />Additional explanation of specific line items of the Sources and Uses is provided below. <br />Sources <br />Line 4 The issuance of TI revenue bonds is a gap strategy. Estimated bond <br />proceeds assume 125% debt service coverage, 1% inflation and a tax-exempt <br />average rate of 5.5%. The bonds will be issued over a period of years on a <br />parity basis (i.e., all of the bonds will be revenue bonds and all the revenues <br />will support all of the bonds). <br />5 The TI revenue note(s) will be issued on a taxable basis and are payable only <br />from revenues remaining after payment of debt service on the TI revenue <br />bonds and City administrative fees. Actual inflation will substantially impact <br />the amount of revenues available for the revenue note. As noted on line 2, an <br />inflation rate of 2.5% is assumed. <br />6 Establishment of a hazardous substance subdistrict will allow the issuance of <br />additional revenue bonds. <br />7 A hazardous substance subdistrict will also allow the issuance of additional <br />revenue notes. Estimated revenue bond and revenue note proceeds from a <br />hazardous substance subdistrict assume the same rates shown on lines 4 <br />and 5. <br />8 It is assumed that the City/County/State will assist with approximately <br />$3 million in transportation and other infrastructureimprovements. <br />9 It is assumed that the City/County/State/Met Council/federal govemment will <br />assist with $3 million of environmental remediation grants. <br />• Page2 <br />