7A - TH 371 Alternate Alignment Zoning

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highway alignment. This does not include the cost to run the utilities along the corridor, but simply to get them across in order to make that possible. We assume that the City would not pay cash for this improvement. To borrow the money, at a rate of 4% over 20 years, the annual payment for the City would be $115,000. We have estimated that somewhere between six and twelve new commercial enterprises may develop along the alignment in the near-term if utilities were provided. For the sake of this analysis, we have used the more aggressive figure of twelve. To compute possible revenue for the City provided by these twelve new commercial properties, we needed to assume what their value would be post-development. (Note this assumes that all twelve will pay property tax and not be in a TIF or tax-abatement program). To make this assumption, we examined the value of existing commercial properties within the City. • Water Wars Manufacturing Site - $415,200 • Crafter's Outlet Mall- $907,000 • Northern Food King - $381,700 • Super America - $267,300 • Former Whalen Woods (retail location on Gov't Drive) - $425,600 For the sake of this analysis, we will assume that all twelve properties will be worth $500,000 after they are fully developed. By comparison to existing properties along this corridor, that is an optimistic assumption. Twelve new, commercial properties, each valued at$500,000, would generate a yearly total of$78,000 in new tax revenue to the City. 12 properties x$500,000 / property = $6,000,000 in Commercial Tax Capacity Commercial Tax Collected = Commercial Tax Capacity x Commercial Property Tax Rate x City Tax Rate $6,000,000 x 0.02 x 0.65 _ $78,000 The City currently applies 7% of all revenue to debt service, the remaining 93% going to pays for other functions of the government. The new commercial development along the corridor will require government services (road plowing, police and fire protection, zoning administration, etc....). If the City maintains the current debt ratio, the new commercial development would add an estimated$5,460 of revenue to debt service.