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Page I 8 PROJECT AREA BUDGET WOODLAND AVENUE COMMUNITY REINVESTMENT AREA (CRA) MILLCREEK COMMUNITY REINVESTMENT AGENCY, UTAH MAY 2021 ---PAGE BREAK--- Page I 2 Table of Contents TABLE OF CONTENTS 2 SECTION 1: INTRODUCTION 3 SECTION 2: DESCRIPTION OF COMMUNITY DEVELOPMENT PROJECT AREA 3 SECTION 3: GENERAL OVERVIEW OF PROJECT AREA BUDGET 4 SECTION 4: PROPERTY TAX INCREMENT 5 EXHIBIT A: PROJECT AREA MAP 7 EXHIBIT B: MULTI-YEAR PROJECTION OF TAX INCREMENT 7 ---PAGE BREAK--- Page I 3 Section 1: Introduction The Millcreek Community Reinvestment Agency (the “Agency”), following thorough consideration of the needs and desires of the City of Millcreek (the “City”) and its residents, as well as understanding the City’s capacity for new development, has carefully crafted the Project Area Plan (the “Plan”) for the Woodland Avenue Community Reinvestment Project Area (the “Project Area”). The Plan is the result of an evaluation of the types of appropriate land- uses and economic development opportunities for the land encompassed by the Project Area which includes parcels between Woodland Avenue and Miller Avenue, between Richmond Avenue to the west and Highland Drive to the east, recently annexed from Salt Lake City into Millcreek (July 1, 2020) and therefore excluded from the surrounding Millcreek Center Community Reinvestment Area. The Plan is envisioned to define the method and means of development for the Project Area from its current state to a higher and better use. The City has determined it is in the best interest of its citizens to assist in the development of the Project Area. This Project Area Budget document (the “Budget”) is predicated upon certain elements, objectives and conditions outlined in the Plan and intended to be used as a financing tool to assist the Agency in meeting Plan objectives discussed herein and more specifically referenced and identified in the Plan. The creation of the Project Area is being undertaken as a community reinvestment project pursuant to certain provisions of Chapters 1 and 5 of the Utah Community Reinvestment Agency Act (the “Act”, Utah Code Annotated (“UCA”) Title 17C). The requirements of the Act, including notice and hearing obligations, have always been observed throughout the establishment of the Project Area. Section 2: Description of Community Development Project Area The Project Area includes parcels between Woodland Avenue and Miller Avenue, between Richmond Avenue to the west and Highland Drive to the east, recently annexed from Salt Lake City into Millcreek (July 1, 2020) and therefore excluded from the surrounding Millcreek Center Community Reinvestment Area. The Project Area is comprised of approximately 5.5 acres of property. A map of the Project Area is attached hereto in EXHIBIT A. ---PAGE BREAK--- Page I 4 Section 3: General Overview of Project Area Budget The purpose of the Project Area Budget is to provide the financial framework necessary to implement the Project Area Plan vision and objectives. The Project Area Plan has identified that tax increment financing is essential to meet the objectives of the CRA Project Area. The following information will detail the sources and uses of tax increment and other necessary details needed for public officials, interested parties, and the public in general to understand the mechanics of the Project Area Budget. Base Year Value The Agency has determined that the base year property tax value for the Project Area will be the total taxable value for the 2020 tax year which is estimated to be $8,244,900. Using the tax rates established within the Project Area the property taxes levied equate to $69,356 annually. Accordingly, this amount will continue to flow through to each taxing entity proportional to the amount of their respective tax rates being levied. Payment Trigger The Project Area will have a twenty-year (20) duration from the date of the first tax increment received by the Agency. The collection of tax increment will be triggered at the discretion of the Agency prior to March 1 of the tax year in which they intend to begin the collection of increment. The following year in which this increment will be remitted to the Agency will be Year 1, e.g., if requested prior to March 1, 2022, Year 1 of increment will be 2023. The Agency anticipates it will trigger tax increment by March 1, 2022, but in no case will the Agency trigger the first year of tax increment collection after March 1, 2024. Projected Tax Increment Revenue – Total Generation Development within the Project Area will commence upon favorable market conditions which will include both horizontal and vertical infrastructure and development. The Agency anticipates that new development will begin in the Project Area in 2021. The contemplated development will generate significant additional property tax revenue as well as incremental sales and use tax above what is currently generated within the Project Area. Property Tax Increment will begin to be generated in the tax year (ending Dec 1st) following construction completion and Tax Increment will be paid to the Agency in March or April after collection. It is projected that property Tax Increment generation within the Project Area could begin as early as 2021 or as late as 2024. It is currently estimated that during the 20-year life of the Project Area Budget, property Tax Increment could be generated within the Project Area in the approximate amount of $4.5 million or at a net present value (NPV)1 of $2.9 million. This amount is over and above the $8.2 million of base taxes that the property would generate over 20 years at the $8.2 annual amount it currently generates as shown in Table 4.1 below. 1 Net Present Value of future cash flows assumes a 4% discount rate. The same 4% discount rate is used in all remaining NPV calculations. This total is prior to accounting for the flow-through of tax increment to the respective taxing entities. ---PAGE BREAK--- Page I 5 Section 4: Property Tax Increment Base Year Property Tax Revenue The taxing entities are currently receiving - and will continue to receive - property tax revenue from the current assessed value of the property within the Project Area (“Base Taxes”). The current assessed value is estimated to be $8,244,900.00. Based upon the tax rates in the area, the collective taxing entities are receiving $69,356 in property tax annually from this Project Area. This equates to approximately $1,387,122 over the 20-year life of the Project Area. TABLE 4.1: TOTAL BASE YEAR TO TAXING ENTITIES (OVER 20 YEARS) Entity Total NPV at 4% Salt Lake County $321,221 $218,275 Salt Lake County Library 84,922 57,706 Salt Lake City School District 550,430 374,026 Millcreek City 303,577 206,286 Salt Lake City Mosquito Abatement District 20,118 13,670 Mt. Olympus Improvement District 40,895 27,789 Central Utah Water Conservancy District 65,959 44,820 Total Revenue $1,387,122 $942,572 Property Tax Increment Shared with RDA All taxing entities that receive property tax generated within the Project Area, as detailed above, will share at least a portion of that increment generation with the Agency. All taxing entities will contribute 80% of their respective tax increment, except for Central Utah Water Conservancy District and Salt Lake County Library, for 20 years. Central Utah Water Conservancy District will contribute an estimated 75% of their respective tax increment for 20 years. Salt Lake County Library will contribute 0% of their respective tax increment for 20 years. The City, County and the State will not contribute any portion of their incremental sales tax to implement the Project Area Plan. Table 4.2 shows the amount of Tax Increment shared with the Agency assuming the participation levels discussed above. TABLE 4.2: SOURCES OF TAX INCREMENT FUNDS (OVER 20 YEARS) Entity Total NPV at 4% Salt Lake County $843,874 $531,391 Salt Lake County Library 0 0 Salt Lake City School District 1,446,022 910,566 Millcreek City 797,521 502,202 Salt Lake City Mosquito Abatement District 52,850 33,280 Mt. Olympus Improvement District 107,434 67,651 Central Utah Water Conservancy District 162,450 102,295 Total Sources of Tax Increment Funds $3,410,150 $2,147,385 ---PAGE BREAK--- Page I 6 Uses of Tax Increment “But-for” the creation of the CRA and public participation, the costs associated with creating a city center, including: land assemblage, parking structures, site improvements, etc. will be too high and the land within the Project Area will remain in its current state. The Agency will use 5% of the tax increment to administer the CRA. Most of the remaining tax increment collected by the Agency will be used to overcome the obstacles outlined above Including: offsetting certain on-site public infrastructure costs, development incentives, Agency requested improvements and upgrades, desirable Project Area improvements, and other redevelopment activities as approved by the Agency. The remaining 15% will go towards affordable housing. TABLE 4.3: USES OF TAX INCREMENT Uses Total NPV at 4% Redevelopment Activities $2,728,120 $1,717,908 CRA Housing Requirement 511,523 322,108 Project Area Administration 170,508 107,369 Total Uses of Tax Increment Funds $3,410,150 $2,147,385 Total Annual Property Tax Revenue for Taxing Entities at Conclusion of Project As described above, the collective taxing entities are currently receiving approximately $69,356 in property taxes annually from this Project Area. At the end of 20 years an additional $286,008 in property taxes annually is anticipated, totaling approximately $355,364 in property taxes annually for the area. “But for” the assistance provided by the Agency through tax increment revenues, this 412 percent increase in property taxes generated for the taxing entities would not be possible. TABLE 4.4: TOTAL BASE YEAR AND END OF PROJECT LIFE ANNUAL PROPERTY TAXES Entity Annual Base Year Property Taxes Annual Property Tax Increment at Conclusion of Project Total Annual Property Taxes Salt Lake County $16,061 $66,232 $82,293 Salt Lake County Library 4,246 17,510 21,756 Salt Lake School District 27,521 113,492 141,013 Millcreek City 15,179 62,594 77,773 Salt Lake City Mosquito Abatement District 1,006 4,148 5,154 Mt. Olympus Improvement District 2,045 8,432 10,477 Central Utah Water Conservancy District 3,298 13,600 16,898 Total Revenue $69,356 $286,008 $355,364 ---PAGE BREAK--- Page I 7 Exhibit A: Project Area Map ---PAGE BREAK--- Page I 8 Millcreek Community Reinvestment Agency ASSUMPTIONS: Woodland Avenue CRA Discount Rate 4.0% Increment and Budget Analysis Participation Rate 80.0% Except for Central Utah Water Conservancy District at 75% and Salt Lake County at 0% Tax District: ACP Payment Year 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Tax Year 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 TOTALS NPV Cumulative Taxable Value Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Existing Assessed Taxable Value (Project Area) $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 $8,244,900 Commercial $500,000 $1,000,000 $1,500,000 $2,000,000 $4,500,000 $6,500,000 $8,500,000 $10,500,000 $12,500,000 $12,500,000 $12,500,000 $12,500,000 $12,500,000 $12,500,000 $12,500,000 $12,500,000 $12,500,000 $12,500,000 $12,500,000 $12,500,000 Office $2,500,000 $5,000,000 $6,000,000 $7,000,000 $7,500,000 $8,000,000 $8,500,000 $9,000,000 $9,500,000 $9,500,000 $9,500,000 $9,500,000 $9,500,000 $9,500,000 $9,500,000 $9,500,000 $9,500,000 $9,500,000 $9,500,000 $9,500,000 Residential $2,000,000 $4,000,000 $4,500,000 $5,000,000 $5,500,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000 $12,000,000 $12,000,000 $12,000,000 $12,000,000 $12,000,000 $12,000,000 $12,000,000 $12,000,000 $12,000,000 $12,000,000 $12,000,000 Total New Assessed Value: 5,000,000 10,000,000 12,000,000 14,000,000 17,500,000 20,500,000 25,000,000 29,500,000 34,000,000 34,000,000 34,000,000 34,000,000 34,000,000 34,000,000 34,000,000 34,000,000 34,000,000 34,000,000 34,000,000 34,000,000 Total Assessed Taxable Value of Project Areea 13,244,900 18,244,900 20,244,900 22,244,900 25,744,900 28,744,900 33,244,900 37,744,900 42,244,900 42,244,900 42,244,900 42,244,900 42,244,900 42,244,900 42,244,900 42,244,900 42,244,900 42,244,900 42,244,900 42,244,900 Less Base Year Value (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) (8,244,900) TOTAL Assessed Value Less Base Year Value (Incremental Value) $5,000,000 $10,000,000 $12,000,000 $14,000,000 $17,500,000 $20,500,000 $25,000,000 $29,500,000 $34,000,000 $34,000,000 $34,000,000 $34,000,000 $34,000,000 $34,000,000 $34,000,000 $34,000,000 $34,000,000 $34,000,000 $34,000,000 $34,000,000 TAX RATE & INCREMENT ANALYSIS: 2020 Rates Salt Lake County 0.001948 $9,740 $19,480 $23,376 $27,272 $34,090 $39,934 $48,700 $57,466 $66,232 $66,232 $66,232 $66,232 $66,232 $66,232 $66,232 $66,232 $66,232 $66,232 $66,232 $66,232 $1,054,842 $664,238 Salt Lake County Library 0.000515 2,575 5,150 6,180 7,210 9,013 10,558 12,875 15,193 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 278,873 175,607 Salt Lake City School District 0.003338 16,690 33,380 40,056 46,732 58,415 68,429 83,450 98,471 113,492 113,492 113,492 113,492 113,492 113,492 113,492 113,492 113,492 113,492 113,492 113,492 1,807,527 1,138,207 Millcreek City 0.001841 9,205 18,410 22,092 25,774 32,218 37,741 46,025 54,310 62,594 62,594 62,594 62,594 62,594 62,594 62,594 62,594 62,594 62,594 62,594 62,594 996,902 627,753 Salt Lake City Mosquito Abatement District 0.000122 610.00 1,220 1,464 1,708 2,135 2,501 3,050 3,599 4,148 4,148 4,148 4,148 4,148 4,148 4,148 4,148 4,148 4,148 4,148 4,148 66,063 41,600 Mt. Olympus Improvement District 0.000248 1,240 2,480 2,976 3,472 4,340 5,084 6,200 7,316 8,432 8,432 8,432 8,432 8,432 8,432 8,432 8,432 8,432 8,432 8,432 8,432 134,292 84,564 Central Utah Water Conservancy District 0.000400 2,000 4,000 4,800 5,600 7,000 8,200 10,000 11,800 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 13,600 216,600 136,394 TOTAL INCREMENTAL REVENUE IN PROJECT AREA: 0.008412 $42,060 $84,120 $100,944 $117,768 $147,210 $172,446 $210,300 $248,154 $286,008 $286,008 $286,008 $286,008 $286,008 $286,008 $286,008 $286,008 $286,008 $286,008 $286,008 $286,008 $4,555,098 $2,868,363 PROJECT AREA BUDGET 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 Sources of Funds: 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 TOTALS NPV Property Tax Participation Rate for Budget Salt Lake County 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% Salt Lake County Library 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Salt Lake City School District 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% Millcreek City 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% Salt Lake City Mosquito Abatement District 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% Mt. Olympus Improvement District 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80% Central Utah Water Conservancy District 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% Property Tax Increment for Budget Salt Lake County $7,792 $15,584 $18,701 $21,818 $27,272 $31,947 $38,960 $45,973 $52,986 $52,986 $52,986 $52,986 $52,986 $52,986 $52,986 $52,986 $52,986 $52,986 $52,986 $52,986 $843,874 $531,391 Salt Lake County Library - - - - - - - - - - - - - - - - - - - - - - Salt Lake City School District $13,352 $26,704 $32,045 $37,386 $46,732 $54,743 66,760 78,777 90,794 90,794 90,794 90,794 90,794 90,794 90,794 90,794 90,794 90,794 90,794 90,794 1,446,022 910,566 Millcreek City $7,364 $14,728 $17,674 $20,619 $25,774 $30,192 36,820 43,448 50,075 50,075 50,075 50,075 50,075 50,075 50,075 50,075 50,075 50,075 50,075 50,075 797,521 502,202 Salt Lake City Mosquito Abatement District $488 $976 $1,171 $1,366 $1,708 $2,001 2,440 2,879 3,318 3,318 3,318 3,318 3,318 3,318 3,318 3,318 3,318 3,318 3,318 3,318 52,850 33,280 Mt. Olympus Improvement District $992 $1,984 $2,381 $2,778 $3,472 $4,067 4,960 5,853 6,746 6,746 6,746 6,746 6,746 6,746 6,746 6,746 6,746 6,746 6,746 6,746 107,434 67,651 Central Utah Water Conservancy District $1,500 $3,000 $3,600 $4,200 $5,250 $6,150 7,500 8,850 10,200 10,200 10,200 10,200 10,200 10,200 10,200 10,200 10,200 10,200 10,200 10,200 162,450 102,295 Total Property Tax Increment for Budget: $31,488 $62,976 $75,571 $88,166 $110,208 $129,101 $157,440 $185,779 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $3,410,150 $2,147,385 Uses of Tax Increment Funds: 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 TOTALS NPV Redevelopment Activities (Infrastructure, Relocation, Incentives, etc.) 80.0% $25,190 $50,381 $60,457 $70,533 $88,166 $103,281 $125,952 $148,623 $171,295 $171,295 $171,295 $171,295 $171,295 $171,295 $171,295 $171,295 $171,295 $171,295 $171,295 $171,295 $2,728,120 $1,717,908 CRA Housing Requirement 15.0% 4,723 9,446 11,336 13,225 16,531 19,365 23,616 27,867 32,118 32,118 32,118 32,118 32,118 32,118 32,118 32,118 32,118 32,118 32,118 32,118 511,523 322,108 RDA Administration 5.0% 1,574 3,149 3,779 4,408 5,510 6,455 7,872 9,289 10,706 10,706 10,706 10,706 10,706 10,706 10,706 10,706 10,706 10,706 10,706 10,706 170,508 107,369 Total Uses $31,488 $62,976 $75,571 $88,166 $110,208 $129,101 $157,440 $185,779 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $214,118 $3,410,150 $2,147,385 REMAINING TAX REVENUES FOR TAXING ENTITIES 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 TOTALS NPV Salt Lake County $1,948 $3,896 $4,675 $5,454 $6,818 $7,987 $9,740 $11,493 $13,246 $13,246 $13,246 $13,246 $13,246 $13,246 $13,246 $13,246 $13,246 $13,246 $13,246 $13,246 $210,968 $132,848 Salt Lake County Library 2,575 5,150 6,180 7,210 9,013 10,558 12,875 15,193 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 17,510 278,873 175,607 Salt Lake City School District 3,338 6,676 8,011 9,346 11,683 13,686 16,690 19,694 22,698 22,698 22,698 22,698 22,698 22,698 22,698 22,698 22,698 22,698 22,698 22,698 361,505 227,641 Millcreek City 1,841 3,682 4,418 5,155 6,444 7,548 9,205 10,862 12,519 12,519 12,519 12,519 12,519 12,519 12,519 12,519 12,519 12,519 12,519 12,519 199,380 125,551 Salt Lake City Mosquito Abatement District 122 244 293 342 427 500 610 720 830 830 830 830 830 830 830 830 830 830 830 830 13,213 8,320 Mt. Olympus Improvement District 248 496 595 694 868 1,017 1,240 1,463 1,686 1,686 1,686 1,686 1,686 1,686 1,686 1,686 1,686 1,686 1,686 1,686 26,858 16,913 Central Utah Water Conservancy District 500 1,000 1,200 1,400 1,750 2,050 2,500 2,950 3,400 3,400 3,400 3,400 3,400 3,400 3,400 3,400 3,400 3,400 3,400 3,400 54,150 34,098 Total $10,572 $21,144 $25,373 $29,602 $37,002 $43,345 $52,860 $62,375 $71,890 $71,890 $71,890 $71,890 $71,890 $71,890 $71,890 $71,890 $71,890 $71,890 $71,890 $71,890 $1,144,948 $720,978 INCREMENTAL TAX ANALYSIS: