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Srnnary Lett4 Atgust 1 6, 2007, Page 2 of 6 MaeroeconomÍc T?ends The macroeconomic trends in Pequot Lakes are strong. The growth in traffic volumes that prompted discussions about Highway 371 indicates positive pressure on the region's economy. The net tax capacity of the are4 when looking. at the Pequot Lakes School District, the property type cluster as defined by the State,i and Crow Wing Cognty all otrtstripped State trends by at least 2Ùo/o duúngthe 2003-6 period. The strong growttr in enrollment including significant open enrollment fromneighboring disticts, iJ apositive statement about the City's future. Pequot Lakes' farrnland and timberland values are ranked in the top twelve cities and townships in Crow Wing County over the period 2002-6. Clearly, there are positive trends underlying the City's current status as an increasingly busy destination. Tæ BaseAnaþsís The process of assembling atatr base analysis on top of the rnacroeconomic snapshot followed the seque,nce of steps below: ' collect md assign property data by current business use and location. ' Establish projections for property price behavior based on resea¡ch and sources specific to project. ' Evaluate charges in market valug tax capacity, and tax revenue based on current city tar rate. ' Apply the opportrmity cost of the lard takings, and the financing costs, to estimate anet preseNrt value benefit r¡nder each development scenario. The tax base analysis rsed datafor 224 property parcels in the City, representing an area of I,156 acres. Pacels located along the cwrent alignment, and which were l-Z bloclcs from the cune,lrt Highway 371 alignment and in non-single-family uses, were included in the analysis. Parcels along the alternative alignment, including those whose current use is light industrial, agficultural and forest management were similarly inctuded in the data set. A rnap is attached to lhis srtrnmar5¡, which Community Growth Institute provided wittr the data collected and analyzed. The analysis classified all parcels into a range of categories; different assumptions about future property value trends were used for each category of property. The categories were: Agriculturg agriculture converted to commercial-industrial property, food service, forest management, lightindustrial, local commercial, local retail, multifamily housing specialty ret¿il, tourist retail, and tourist service. As shown graphically in the attached presentatior¡ ttre cornposition of ta¡r base in 2O2l (tenyears from anticipated higþway opening) is projected to be over $50 million for each of the three scenarios. rWithin these values, the composition of ta¡t base va¡ies, based on assumptions forhow particular land uses and locations will be valued under one scenario or the other. The variation in total ta¡r base lrl^202l among the three scenarios - and the fact thæ the enpansion of the Appendix E - Donjek Final Report Page2ol'l'l