There is a 3 acres site near the Downtown of the City of Success. Currently the property has a small commercial strip center that is mostly vacant with the exception of a pizza take-out and dry cleaners. The site is very much under used - especially economically - and the City would like to see a major development occur there to spur economic growth for the area. Currently, the property has a market value as determined by the City Assessor to be $200,000. Recently the City received a proposal from a larger real estate developer who would like to acquire the property and develop a major mixed use project that will include retail, office and residential uses. The developer estimates that by year 3 of the project being stabilized the project will have a market value of $50,000,000. However, it will take up to three years to achieve that so the developer estimates the project will achieve 50% of the market value in year one, and 75% of the market value in year two. Also, the developer indicates that the project cannot withstand the cost of constructing the parking and demolition of the site - estimated to cost around $5,000,000. The City is evaluating the proposal, and as part of the analysis, is estimating the increase (incremental) in property taxes that could be generated by the new project to assist in covering the cost of the parking and demolition. Currently the City has a Property Tax rate of 50 mills - or $50 per $1,000 of SEV. Your Assignment: Your Assignment for this Exercise is to fill in the following Tax Increment Finance ProForma. Year Year One Year Two Year Three New Project SEV Subtract the Existing Project SEV Net Project SEV Property Tax Rate New (increment) Prenerty tax Revenue There is a 3 acres site near the Downtown of the City of Success. Currently the property has a small commercial strip center that is mostly vacant with the exception of a pizza take-out and dry cleaners. The site is very much under used - especially economically - and the City would like to see a major development occur there to spur economic growth for the area. Currently, the property has a market value as determined by the City Assessor to be $200,000. Recently the City received a proposal from a larger real estate developer who would like to acquire the property and develop a major mixed use project that will include retail, office and residential uses. The developer estimates that by year 3 of the project being stabilized the project will have a market value of $50,000,000. However, it will take up to three years to achieve that so the developer estimates the project will achieve 50% of the market value in year one, and 75% of the market value in year two. Also, the developer indicates that the project cannot withstand the cost of constructing the parking and demolition of the site - estimated to cost around $5,000,000. The City is evaluating the proposal, and as part of the analysis, is estimating the increase (incremental) in property taxes that could be generated by the new project to assist in covering the cost of the parking and demolition. Currently the City has a Property Tax rate of 50 mills - or $50 per $1,000 of SEV. Your Assignment: Your Assignment for this Exercise is to fill in the following Tax Increment Finance ProForma. Year Year One Year Two Year Three New Project SEV Subtract the Existing Project SEV Net Project SEV Property Tax Rate New (increment) Prenerty tax Revenue