01. Fargo Property Tax Incentive for Roosevelt Family Lofts, LLC

City of Fargo, North Dakota 711 10th Avenue North “But-for” Report|6 Conclusion The Developer will bear all the risk involved with the project. The Developer is dependent on a number of factors before and after the project is completed, including project costs, occupancy of the units, the rental market, and monthly expenses. Both the internal rate of return without assistance and the debt service coverage are very low. The base scenario without assistance along with the sensitivity analyses demonstrate that the project would likely not be feasible without assistance. PFM determines that with public assistance, based on 5 years of 100% property tax exemption followed by 5 years of 50% exemption, the Developer’s internal rate of return, based on the assumptions outlined in this report, would be 7.15%. Furthermore, the Year 4 debt coverage ratio increases from 0.97x to 1.19x when assistance is provided. Based upon the information provided, the project would not be feasible “but-for” public assistance as it is currently shown by the Developer.