continued or renewed productivity of these sites;

•  Attract investment based on the community's strengths and competitive advantages; and
•  Support investment and development that results in an increase in property assessment and grows the non-residential municipal tax base over the long-term.

RISK ANALYSIS:

There is little risk associated with the approval of the CIP application. Staff resources are required for the upfront administration of the grant program and finalization of the legal agreement. Limited staff resources related to on-going monitoring of the employment use and issuance of annual grants will also be required over the next ten years.

Should Council refuse the CIP request, Flex-N-Gate may decide to invest in one of its facilities in Michigan.

FINANCIAL MATTERS:

Business Development Grant Program

The tax increment portion of the Business Development Grant is not calculated or paid out until all eligible work is completed and the property is reassessed by MPAC. Reassessment of the property must result in an increase in assessment value. The grant amount is recalculated annually based on the actual assessed property value, tax class, and municipal tax rate.

Summary of Potential Financial Incentives

Flex-N-Gate proposes to spend $3,200,000 on the expansion (i.e. $1.4M on new construction and $1.8M on renovations). New construction is estimated to add approximately $1,120,000 to the assessed property value while the proposed renovations are not expected to add assessment value.

Planning and Finance staff have prepared pro-forma calculations (Figure 1) to provide an understanding of the potential grant magnitude. The annual increase in municipal tax levy is estimated to be $53,585—which would yield a total grant value of $535,850 over the 10-year lifespan of the program. This would represent 16.75% of the eligible investment made by Flex-N-Gate.