Springsted Incorporated

380 Jackson Street, Suite 300

Saint Paul, MN 55101-2887

Tel: 651-223-3000
Fax: 651-223-3002
www.springsted.com

MEMORANDUM

TO: James Archambo, City Administrator

FROM: Mikaela Huot, Assistant Vice President/Consultant

Joseph Murray, Vice President/Client Representative
Tony Schertler, Senior Vice President/Client Representative

CC: Nancy Welch, Director of Community Development

Ron Braier, Finance Director
Alan Kesner, City Attorney

DATE: August 3, 2010

SUBJECT: Feasibility Analysis for UWM Engineering Campus Project TID

The City is in the process of establishing a Tax Increment Financing District for financing of a portion of the public
improvements related to development of a proposed UWM Engineering Campus within the City of Wauwatosa. The
City requested that Springsted provide an economic feasibility study to determine if the projected revenues generated
from the District as a result of the proposed development can finance the costs associated with the implementation of
the Project Plan.

The tax increment revenue projections are based on the potential development of certain buildings and/or sites to
accommodate future land uses. The development projections are based on information provided by the UW
Foundation (proposed developer) along with an understanding of the general market conditions and feasibility within
the area. Any changes in the type or size of buildings in the proposed site plan would result in expected increases
and/or decreases in projected revenues.
TID Number 6 – Table I Projected Development

Square Expected Date

PROJECT Value Feet or of
Units Construction
Improved Land $13,550,000
Accelerator Building $3,000,000 2012
Academic Buildings NA 400,000
Residential $16,150,000 190 Units 2012-2015
Office/Research $54,506,250 475,000 2013-2031
Retail $14,407,500 113,000 2014-2020
TOTAL VALUE INCREMENT $101,613,750
City of Wauwatosa, Wisconsin
August 3, 2010
Page 2

The land is currently owned by the County and therefore tax-exempt. Following the sale to the University, the
assumption is that the land will become taxable. The estimated value based on the assumed sale price is
$13,550,000. The City anticipates that the Accelerator building will be constructed first within the research park that
will create incremental new value of approximately $3.0 million.

With the exception of the academic buildings and accelerator, projected development of the Research Park is still in
preliminary stages. Future projections are based on a site plan of the Park which includes the following:
• Office/research,
• Residential (rental and owner-occupied)
• Retail

The site plan includes approximately 400,000 square feet of academic buildings, 190 units of residential housing,
475,000 square feet of office/research buildings. Total estimated square footage of the site is approximately 988,000.
Our estimates of incremental new value on the campus are based on the provided square footages and business
types. Using that information, we estimate that the incremental new value will be approximately $101.6 million upon
full build-out of the site. The incremental value estimates will be refined as additional information on projected future
build-outs becomes available.

The objective of the District creation is to facilitate the development of a new campus. With the expanded campus, it
is anticipated that office/research will locate within the District creating additional demand for new housing and
supporting retail. The new development is anticipated to create a total of $101.6 million in incremental value. The
economic feasibility projections are based on the utilization of approximately 27 years of the allowed tax increment
collection period, which is the maximum for blighted TIDs.

The economic feasibility analysis should be considered as a baseline projection that is annually monitored to ensure
projected targets are met. The purpose of the annual monitoring is to determine that total incremental value has
been achieved rather than whether a specific identified project created those increments. Future public borrowing
and/or expenditures should be based on this annual review process. It is the intent of this Project Plan to maximize
the potential of Tax Incremental Financing District Number 6 to accomplish the proposed public improvements
identified in the Project Plan.

Table I summarize the development assumptions that have been used in the economic feasibility analysis. These
projections have been prepared based on information received from the UWM Foundation and City staff. The
projections in Table I include assumptions on square footage and business type for future developments that have
been proposed in the preliminary site plan. Assumptions of the taxable value by type of use are based on a review of
comparable real estate values.

The incremental new value projections included in Table I are not total construction cost estimates, but are factored
to equate to the anticipated equalized value to which an annual mill rate will be applied. The actual construction
costs may be higher than projected value because construction costs may include soft costs not necessarily
assessed by the City. Real estate valuation can also significantly fluctuate from year to year. For that reason, there
 City of Wauwatosa, Wisconsin
August 3, 2010
Page 3

should be an annual review and evaluation of the stability of the increment value prior to making annual borrowing
and/or spending decisions.

The economic feasibility analysis for Tax Incremental District Number 6 is presented in Tables III and IV included
below. Table II shows the projected tax increments from the District based on the development assumptions made in
Table I. The projections assume the total incremental new value will be $101.6 million by 2037.

TID Number 6 – Table II Projected Tax Increments

Annual Cumulative Value Annual Tax
Increased Value of New Cumulative Due to Total TID 2009/10 Increment PV TI Revenue Period Cumulative
Valuation Value of New Buildings & Value with Personal Estimated Base Value Net Total Revenue Annual Avail for Ending TI
Year Buildings Improvements Inflation Property Taxable Value Value * Increment Tax Rate /1000 TI Revenue Value Yr Pymts Revenue
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)
13,550,000 13,550,000 13,550,000 13,550,000 13,550,000 21.000
1/1/2011 - 13,550,000 13,550,000 - 13,550,000 - 13,550,000 21.000 - - 2011 9/1/2011 -
1/1/2012 5,422,500 18,972,500 18,972,500 - 18,972,500 - 18,972,500 21.000 284,550 284,550 2012 9/1/2012 284,550
1/1/2013 11,103,125 30,075,625 30,075,625 - 30,075,625 - 30,075,625 21.000 284,550 264,469 2013 9/1/2013 569,100
1/1/2014 6,024,375 36,100,000 36,100,000 - 36,100,000 - 36,100,000 21.000 398,423 352,672 2014 9/1/2014 967,523
1/1/2015 5,652,500 41,752,500 41,752,500 - 41,752,500 - 41,752,500 21.000 631,588 532,441 2015 9/1/2015 1,599,111
1/1/2016 9,052,500 50,805,000 50,805,000 - 50,805,000 - 50,805,000 21.000 758,100 608,660 2016 9/1/2016 2,357,211
1/1/2017 - 50,805,000 50,805,000 - 50,805,000 - 50,805,000 21.000 876,803 670,441 2017 9/1/2017 3,234,013
1/1/2018 9,052,500 59,857,500 59,857,500 - 59,857,500 - 59,857,500 21.000 1,066,905 776,954 2018 9/1/2018 4,300,918
1/1/2019 5,450,625 65,308,125 65,308,125 - 65,308,125 - 65,308,125 21.000 1,066,905 739,956 2019 9/1/2019 5,367,823
1/1/2020 3,601,875 68,910,000 68,910,000 - 68,910,000 - 68,910,000 21.000 1,257,008 830,288 2020 9/1/2020 6,624,831
1/1/2021 - 68,910,000 68,910,000 - 68,910,000 - 68,910,000 21.000 1,371,471 862,756 2021 9/1/2021 7,996,301
1/1/2022 5,450,625 74,360,625 74,360,625 - 74,360,625 - 74,360,625 21.000 1,447,110 866,990 2022 9/1/2022 9,443,411
1/1/2023 5,450,625 79,811,250 79,811,250 - 79,811,250 - 79,811,250 21.000 1,447,110 825,704 2023 9/1/2023 10,890,521
1/1/2024 - 79,811,250 79,811,250 - 79,811,250 - 79,811,250 21.000 1,561,573 848,586 2024 9/1/2024 12,452,094
1/1/2025 5,450,625 85,261,875 85,261,875 - 85,261,875 - 85,261,875 21.000 1,676,036 867,417 2025 9/1/2025 14,128,131
1/1/2026 - 85,261,875 85,261,875 - 85,261,875 - 85,261,875 21.000 1,676,036 826,111 2026 9/1/2026 15,804,167
1/1/2027 - 85,261,875 85,261,875 - 85,261,875 - 85,261,875 21.000 1,790,499 840,504 2027 9/1/2027 17,594,666
1/1/2028 5,450,625 90,712,500 90,712,500 - 90,712,500 - 90,712,500 21.000 1,790,499 800,480 2028 9/1/2028 19,385,166
1/1/2029 - 90,712,500 90,712,500 - 90,712,500 - 90,712,500 21.000 1,790,499 762,362 2029 9/1/2029 21,175,665
1/1/2030 5,450,625 96,163,125 96,163,125 - 96,163,125 - 96,163,125 21.000 1,904,963 772,475 2030 9/1/2030 23,080,628
1/1/2031 5,450,625 101,613,750 101,613,750 - 101,613,750 - 101,613,750 21.000 1,904,963 735,690 2031 9/1/2031 24,985,590
1/1/2032 - 101,613,750 101,613,750 - 101,613,750 - 101,613,750 21.000 2,019,426 742,758 2032 9/1/2032 27,005,016
1/1/2033 - 101,613,750 101,613,750 - 101,613,750 - 101,613,750 21.000 2,133,889 747,484 2033 9/1/2033 29,138,904
1/1/2034 - 101,613,750 101,613,750 - 101,613,750 - 101,613,750 21.000 2,133,889 711,889 2034 9/1/2034 31,272,793
1/1/2035 - 101,613,750 101,613,750 - 101,613,750 - 101,613,750 21.000 2,133,889 677,990 2035 9/1/2035 33,406,682
1/1/2036 - 101,613,750 101,613,750 - 101,613,750 101,613,750 - 21.000 2,133,889 645,705 2036 9/1/2036 35,540,571
1/1/2037 - 101,613,750 101,613,750 - 101,613,750 101,613,750 - 21.000 2,133,889 614,957 2037 9/1/2037 37,674,459
Totals: $ 88,063,750 $ 37,674,459 $ 18,210,291

* Assume base value of new development to be $0. Land current tax-exempt.

Table III shows the preliminary debt service schedules for financing of the proposed public improvement costs in the
amount of approximately $12.0 million. The City anticipates financing the proposed project costs through a bond
issuance. Table III indicates on a preliminary basis that projected tax increments are expected to be sufficient to
support the debt service through the maximum term of the district.

The retirement of the District, taking into consideration the assumptions identified for the Proposed Project Costs,
Public Works & Improvements) and Table I (Projected Development Assumptions), is based on the property tax
collection that was in place at the time the Public Hearing will be held on August 9, 2010.

The future development assumptions have been based on a review of market conditions that existed in 2010 and
potential future development. It is expected and recommended that the City annually review the financial condition of
Tax Incremental District Number 6. The economic feasibility analysis indicates that the District is feasible, provided
the development assumptions have been achieved. The City should not spend at levels projected in Tables II and III
without a "risk assessment" that defines the maximum financial exposure the City finds acceptable or without
City of Wauwatosa, Wisconsin
August 3, 2010
Page 4

developer agreements that guarantee repayment of expenditures. The City should analyze the fiscal condition of Tax
Incremental Financing District Number 6 on the basis of how well the development assumptions are being met.
Decisions to continue spending annually should be based on the status of the district.

Tax Increment Assumptions

Springsted made certain assumptions to calculate the estimated amount of tax incremental revenues generated by
the proposed project.

• Estimated valuation of the proposed buildings (not land) is $88,063,750

o Accelerator: $3,000,000
o Residential: $16,150,000
o Research/office: $54,506,250
o Retail: $14,407,500
• Construction schedule 20 years commencing 2012
• Land currently tax-exempt
• Estimated valuation of land when taxable: $13,550,000
o 58 acres, including Eschweiler parcel
• Total base value estimate of $0 (tax-exempt County-owned property)
• Creation Resolution approved before 9/30/10, allowing base value to be established as of 1/2/10
• Pay 2010 equalized tax rate of 21.00, no change throughout term of TID
• $0 value increment from personal property
• New value inflates 0% annually
• Blight TID, 27 year maximum term

The attached debt service schedules show the annual payments to support $12.0M of project costs. We have
structured the debt to be a 3-year Bond Anticipation Note followed by permanent financing with a 17-year General
Obligation Corporate Purpose Bond. Other assumptions used in the analysis are as follows:

• TIF Bond Anticipation Notes

o 3-year period
o Capitalized interest of $391,094
o Costs of Issuance and Underwriters Discount of $122,575
o Estimate of current General Obligation tax exempt interest rates for Wauwatosa
• GO Corporate Purpose Bonds
o 17-year period
o 100% of tax increment generated in year 1 is available to service debt in year 2, continuing through
the term of the bonds
o Cost of issuance and underwriter’s discount funded from the par amount of bonds
City of Wauwatosa, Wisconsin
August 3, 2010
Page 5

TID Number 6 Table III Preliminary Debt Service Schedules

$12,515,000
City of Wauwatosa, Wisconsin
General Obligation Tax Increment Revenue Bonds
TIF Bond Anticipation Notes

Sources & Uses

Dated 06/01/2011 | Delivered 06/01/2011

Sources Of Funds
Par Amount of Bonds..................................................................................................................................................................... $12,515,000.00

Total Sources................................................................................................................................................................................ $12,515,000.00

Uses Of Funds
Deposit to Project Construction Fund............................................................................................................................................. 12,000,000.00
Deposit to Capitalized Interest (CIF) Fund...................................................................................................................................... 391,093.75
Total Underwriter's Discount (0.500%).......................................................................................................................................... 62,575.00
Costs of Issuance........................................................................................................................................................................... 60,000.00
Rounding Amount............................................................................................................................................................................ 1,331.25

Total Uses...................................................................................................................................................................................... $12,515,000.00

 City of Wauwatosa, Wisconsin
August 3, 2010
Page 6
$12,515,000
City of Wauwatosa, Wisconsin
General Obligation Tax Increment Revenue Bonds
TIF Bond Anticipation Notes

NET DEBT SERVICE SCHEDULE

Date Principal Coupon Interest Total P+I CIF Net New D/S
06/01/2011 - - - - - -
06/01/2012 - - 156,437.50 156,437.50 (156,437.50) -
06/01/2013 - - 156,437.50 156,437.50 (156,437.50) -
06/01/2014 12,515,000.00 1.250% 156,437.50 12,671,437.50 (78,218.75) 12,593,218.75
Total $12,515,000.00 - $469,312.50 $12,984,312.50 (391,093.75) $12,593,218.75

SIGNIFICANT DATES

Dated Date....................................................................................................................................................................................... 6/01/2011

Delivery Date................................................................................................................................................................................... 6/01/2011
First Coupon Date............................................................................................................................................................................ 12/01/2011

Yield Statistics

Bond Year Dollars............................................................................................................................................................................ $37,545.00

Average Life..................................................................................................................................................................................... 3.000 Years
Average Coupon.............................................................................................................................................................................. 1.2500000%

Net Interest Cost (NIC).................................................................................................................................................................... 1.4166667%

True Interest Cost (TIC)................................................................................................................................................................... 1.4208352%
Bond Yield for Arbitrage Purposes.................................................................................................................................................. 1.2500000%
All Inclusive Cost (AIC).................................................................................................................................................................... 1.5855935%

IRS Form 8038

Net Interest Cost.............................................................................................................................................................................. 1.2500000%
Weighted Average Maturity.............................................................................................................................................................. 3.000 Years
 $12,815,000
City of Wauwatosa, Wisconsin
General Obligation Tax Increment Revenue Bonds
Corporate Purpose Bonds TIF BANs Takeout

Sources & Uses

Dated 05/01/2014 | Delivered 05/01/2014

Sources Of Funds
Par Amount of Bonds..................................................................................................................................................................... $12,815,000.00

Total Sources................................................................................................................................................................................ $12,815,000.00

Uses Of Funds
Deposit to Current Refunding Fund................................................................................................................................................. 12,593,218.75
Total Underwriter's Discount (1.200%).......................................................................................................................................... 153,780.00
Costs of Issuance........................................................................................................................................................................... 65,000.00
Rounding Amount............................................................................................................................................................................ 3,001.25

Total Uses...................................................................................................................................................................................... $12,815,000.00

City of Wauwatosa, Wisconsin
August 3, 2010
Page 8

$12,815,000
City of Wauwatosa, Wisconsin
General Obligation Tax Increment Revenue Bonds
Corporate Purpose Bonds TIF BANs Takeout

NET DEBT SERVICE SCHEDULE

Date Principal Coupon Interest Total P+I Net New D/S Revenue Surpls(Deficit)
10/01/2014 - - 196,232.92 196,232.92 196,232.92 398,422.50 202,189.58
10/01/2015 25,000.00 1.180% 470,959.00 495,959.00 495,959.00 631,588.13 135,629.13
10/01/2016 135,000.00 1.440% 470,664.00 605,664.00 605,664.00 758,100.00 152,436.00
10/01/2017 240,000.00 1.720% 468,720.00 708,720.00 708,720.00 876,802.50 168,082.50
10/01/2018 410,000.00 1.980% 464,592.00 874,592.00 874,592.00 1,066,905.00 192,313.00
10/01/2019 415,000.00 2.350% 456,474.00 871,474.00 871,474.00 1,066,905.00 195,431.00
10/01/2020 595,000.00 2.750% 446,721.50 1,041,721.50 1,041,721.50 1,257,007.50 215,286.00
10/01/2021 710,000.00 3.050% 430,359.00 1,140,359.00 1,140,359.00 1,371,470.63 231,111.63
10/01/2022 795,000.00 3.300% 408,704.00 1,203,704.00 1,203,704.00 1,447,110.00 243,406.00
10/01/2023 825,000.00 3.500% 382,469.00 1,207,469.00 1,207,469.00 1,447,110.00 239,641.00
10/01/2024 950,000.00 3.680% 353,594.00 1,303,594.00 1,303,594.00 1,561,573.13 257,979.13
10/01/2025 1,085,000.00 3.790% 318,634.00 1,403,634.00 1,403,634.00 1,676,036.25 272,402.25
10/01/2026 1,125,000.00 3.930% 277,512.50 1,402,512.50 1,402,512.50 1,676,036.25 273,523.75
10/01/2027 1,270,000.00 4.070% 233,300.00 1,503,300.00 1,503,300.00 1,790,499.38 287,199.38
10/01/2028 1,320,000.00 4.180% 181,611.00 1,501,611.00 1,501,611.00 1,790,499.38 288,888.38
10/01/2029 1,380,000.00 4.290% 126,435.00 1,506,435.00 1,506,435.00 1,790,499.38 284,064.38
10/01/2030 1,535,000.00 4.380% 67,233.00 1,602,233.00 1,602,233.00 1,904,962.50 302,729.50
Total $12,815,000.00 - $5,754,214.92 $18,569,214.92 $18,569,214.92 $22,511,527.50 $3,942,312.58

SIGNIFICANT DATES
Dated................................................................................................................................................................................................... 5/01/2014
Delivery Date....................................................................................................................................................................................... 5/01/2014
First Coupon Date............................................................................................................................................................................... 10/01/2014

Yield Statistics
Bond Year Dollars............................................................................................................................................................................... $147,579.58
Average Life........................................................................................................................................................................................ 11.516 Years
Average Coupon................................................................................................................................................................................. 3.8990589%

Net Interest Cost (NIC)....................................................................................................................................................................... 4.0032603%

True Interest Cost (TIC)...................................................................................................................................................................... 4.0016038%
Bond Yield for Arbitrage Purposes..................................................................................................................................................... 3.8688854%
All Inclusive Cost (AIC)........................................................................................................................................................................ 4.0583302%

Net Interest Cost in Dollars................................................................................................................................................................. 5,754,214.92

Weighted Average Maturity................................................................................................................................................................. 11.516 Years

Corporate Purpose Bonds T | SINGLE PURPOSE | 7/30/2010 | 11:11 AM