2023 Annual Comprehensive Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2023

NOTE 20 – TAX INCREMENT FINANCING (CONTINUED)

NOTE 21 – SUBSEQUENT EVENT On May 5, 2024, the Shakopee Volunteer Fire Department Relief Association dissolved. The Pension Plan Assets will be fully distributed in accordance with the Association’s bylaws. TIF District No. 21 was established in 2018 as a soils condition district to facilitate development of certain property by removing or remediating hazardous substances, pollution or contaminants within the city. Under the agreement, the developer, Shakopee Crossings Limited Partnership, will be reimbursed up to $1,387,388 of soil remediation costs and will be reimbursed through tax increment collections over the next 20 years. The district was created in 2018 and was certified to the State of Minnesota in 2019. During the year ended December 31, 2023, the City generated $29,812 of tax increment revenue and made payments of $24,324. The remaining unpaid pay-as-you go balance at year end was $1,611,219. TIF District No. 20 was established in 2018 to aid in redeveloping the old downtown city hall location. The developer, Enclave Development, LLC is developing approximately 80 market-rate apartment units, including underground parking, and approximately 1,500 square feet of commercial space including all site improvements. Under the agreement, a redevelopment grant in the amount of $2,132,400 will be issued to the developer. The city will collect 100% of the future increment over the course of the next 25 years to repay the redevelopment grant. The district was created in 2018 and was certified to the State of Minnesota in 2019. During the year ended December 31, 2023, the City generated $212,327 of tax increment revenue. TIF District No. 19 was established in 2018 to aid in redeveloping property located in the downtown area along the riverfront. The developer, Gaughan Shakopee LLC purchased four properties from the City at an agreed upon amount of $1,000,000 and develop approximately 125 market-rate luxury apartment units including underground parking and 3,500 sq. feet of commercial space. Under the agreement, the developer will reimburse the city’s $1,228,600 (primarily for land acquisition) with 20.5% of future tax increment. The remaining increment will be directed towards reimbursement of developer costs up to a principal amount of $2,811,700 over the course of 25 years. The district was created in 2018 and was certified to the State of Minnesota in 2019. During the year ended December 31, 2023, the City generated $105,697 of tax increment revenue and made a payment of $76,822. TIF District No. 18 was established in 2018 to aid in redeveloping the horse racetrack area known as Canterbury Commons with new and improved public infrastructure. This is a multi-year, three phase project that will entail eliminating blighted properties and in turn provide a mix of housing and other commercial and industrial redevelopment. Under the agreement, $39,970,331 of public infrastructure costs will be reimbursed through tax increment to a combination of the City of Shakopee and the Developer over the duration of 25 years. The district was created in 2018 and certified to the State of Minnesota in 2019. During the year ended December 31, 2023, the City generated $1,178,058 of tax increment revenue, which was placed in a debt service fund for future debt service payments. As of December 31, 2023, the City had bonds outstanding of $17,455,000 and developer had certified $11,304,012 of eligible expenses.

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