2022 Annual Comprehensive Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2022

NOTE 5 – RECEIVABLES/UNAVAILABLE REVENUE (CONTINUED) B. Lease Receivable (Continued)

* The restaurant vendor operates its business within a 1,608 square foot unit. The city is paid $2,948 per month for the first four months. Every December rent is increased 2-3% based on the lease terms for the remaining 108 months. The lease ends November 2031. The retail vendor operates its business within a 1,732 square foot unit. The city is paid nothing for the first three months while the tenant is getting set up. Rent is then $2,453.67 per month for eight months. Each July rent is increased 3% per month for 36 months. There is one last 3% increase to finish out the remaining 16 months of the lease. The lease ends October 2027. The medical vendor operates its business within a 1,470 square foot unit. The city is paid $2,756.25 per month for 12 months. The lease ends July 2023. The Commission, acting as lessor, leases water tower space for cellular services under long-term, non cancelable lease agreements. The leases expire at various dates through 2038. During the year ended December 31, 2022, the Commission recognized $146,918 and $26,879 in lease revenue and interest revenue, respectively, pursuant to these contracts. Certain leases provided for increases in future minimum annual rental payments of either 3 or 4 percent. Total commissions lease receivable at year end is $1,770,194. C. Forgivable Loan The Economic Development Authority (EDA) offers a commercial exterior improvement program which is used to encourage property owners to maintain and invest in their properties in order to promote economic growth. The program offers up to 50 percent of project costs for eligible improvements as a no interest forgivable loan. Forgiveness of the loan takes place over a five-year period with 20 percent of the aware forgiven annually. The city may extend or reduce the repayment period based on the dollar amount of the reward. As of December 31, 2022, the balance of these loans is $272,463. There has been an allowance for doubtful accounts recorded for the same amount, as it is fully expected that these loans will be forgiven. * *

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