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We have estimated that somewhere between six and twelve new commercial enterprises may develop <br />`- along the alignment in the near -term, if utilities were provided. For the sake of this analysis, we have <br />used the more aggressive figure of twelve. <br />To compute the revenue for the City provided by these twelve, new commercial properties, we needed to <br />assume what their value would be post - development. (Note that this assumes that all twenty will pay <br />property tax and not be in a TIF or tax - abatement program). To make this assumption, we examined the <br />value of existing commercial properties within the City. <br />• Water Wars Manufacturing Site - $415,200 <br />• Crafter's Outlet Mall - $907,000 <br />• Northern Food King - $381,700 <br />• Super America - $267,300 <br />• Former Whalen Woods (retail location on Gov't Drive) - $425,600 <br />For the sake of this analysis, we will assume that all twelve of the properties will be worth $500,000 after <br />they are fully developed. Obviously, by comparison to existing properties that would be similar to what <br />we would expect in this corridor, that is an optimistic assumption. <br />Twelve new, commercial properties, each valued at $500,000, would generate a total of $78,000 in new <br />tax revenue to the City. <br />12 properties x $500,000/ property = $6,000,000 in Commercial Tax Capacity <br />Commercial Tax Collected = <br />Commercial Tax Capacity x Commercial Property Tax Rate x City Tax Rate <br />$6,000,000 x 0.02 x 0.65 <br />_ $78,000 <br />The City currently applies 7916' of all revenue to debt service, the remaining 939,61 going to pay for the other <br />functions of the government. The new commercial development along the corridor will require <br />government services (road plowing, police and fire protection, zoning administration, etc....). If the City <br />maintains the current debt ratio, the new commercial development would contribute an estimated <br />$5,460 of revenue for debt service. <br />Revenue for Debt Service = $78,000 x 0.07 = $5,460 <br />If the City allowed the debt ratio to climb to double its current value for this project, the amount applied <br />to debt service would be $10,920. <br />Revenue for Debt Service (double City's debt service ratio) _ $78,000 x 0.14 =$10,920 <br />2 <br />