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2012-11-AC-STM-rpt2 (Article 8)
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2012-11-AC-STM-rpt2 (Article 8)
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12/14/2022 4:16:49 PM
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3/1/2013 3:50:07 PM
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2012
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Appropriation Committee
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Town Clerk
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Town Meeting APPROPRIATION COMMITTEE 2ND REPORT TO THE NOVEMBER 2012 SPECIAL TOWN MEETING
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APPROPRIATION COMMITTEE 2nd REPORT TO THE NOVEMBER 2012 STM <br /> To obtain benefits under the EP, however, Lexington must grant a TIF or a special tax assessment and <br /> approve the Certified EP before Vistaprint applies to the Economic Assistance Coordinating Council <br /> (ECAC),the organization that administers the Commonwealth's program. <br /> TIF Proposal <br /> TIF Fiscal TIF% <br /> Year Year <br /> 1 FY16 45% <br /> 2 FY17 40% <br /> 3 FY18 35% <br /> 4 FY19 31% <br /> 5 FY20 28% <br /> 6 FY21 26% <br /> 7 FY22 24% <br /> 8 FY23 19% <br /> 9 FY24 14% <br /> 10 FY25 9% <br /> 11 FY26 2% <br /> 12 FY27 2% <br /> 13 FY28 2% <br /> Table 1:Proposed TIF Schedule <br /> The proposed TIF covers a thirteen year period beginning when Vistaprint occupies the completed 100,000 <br /> square foot facility, assumed to be in FY16. Each year of the TIF the property tax obligation associated with <br /> this portion of the building is reduced by the percentage listed in the TIF %column of Table 1 above. This <br /> reduction is also reflected in the Town's "new growth" number used to determine the levy limit under <br /> Proposition 2'/z. The TIF does not apply to the additional,roughly 50,000 square feet of leasable space in the <br /> new building. Existing leased space and personal property located in either building is taxed at the full rate <br /> and is not subject to the TIF. <br /> Quantitative Analysis <br /> In our analysis,we consider potential benefits to the town under several scenarios in an attempt to answer the <br /> question "Is the Town likely to be better off financially if it approves the TIF agreement or if it votes it <br /> down?" <br /> In structuring the scenarios we have held certain factors constant: <br /> 1) The expected tax rate <br /> 2) The rate of inflation for the property value <br /> 3) The assessed value of the new building in a given year once in service' <br /> 2 The draft TIF agreement dated November 14,2012 does not explicitly exclude this additional 50,000 square feet.It is <br /> our understanding that this will be corrected and our financial analysis assumes that this additional leasable space is <br /> taxed at the full rate. <br /> 3 Once construction is completed, the assessed value on the property is computed using the mass appraisal income <br /> method. This is roughly based on the class of space, square feet of leasable space,and prevailing occupancy rates. We <br /> assume that the same building conforming to the PSDUP will have been built in each scenario. Therefore, our models <br /> use the same assessed value in a given year for each scenario in which construction of the proposed space has been <br /> completed and the space is deemed to have been put in service. <br /> 4 <br />
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