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The Spending Plan adopted by the City requires the assistance is subject to the "Business Subsidy Law" <br />and that the recipient create or retain at least 1 full-time equivalent job (including construction jobs) for <br />every= $25,000 of assistance provided. The applicant has proposed to create 4 full time jobs in addition to <br />approximately 70 part-time jobs. The Loan Agreement requires the creation of a minimum of 4 full-time <br />equivalent positions at $15 per hour wage within 2-years of project completion. <br />The Loan Agreement requires that construction commence before July 1, 2011 as required by= the <br />Spending Plan and statute authorizing use of the TIF funds. <br />TIF 16 Interfund Loan <br />The TIF 16 Fund has a current cash balance of $44,053 and is expected to receive $60,503 in tax revenues <br />generated from the TIF 16 King & Main project by the end of 2011. Therefore in order to fund the <br />proposed $90,000 loan to the project at this time, the HRA will need to fund the loan from its current <br />cash balance and establish an Interfund Loan that provides for the HRA's reimbursement from the <br />anticipated TIF 16 proceeds by the end of 2011. <br />FINANCIAL IMPACT <br />Statutory deadline for commencement of construction and use of funds is June 30, 2011 unless otherwise <br />extended this legislative session. If no requests are approved prior to the deadline, the HRA would be <br />required to use the TIF 16 funds to reimburse the HRA $39,671.78 balance due (from the original TIF 16 <br />Interfund Loan), decertify the TIF district, and distribute the balance and future taxes to the city, county <br />and school district. <br />Loan repayments will be first directed to reimburse the HRA Interfund Loans and then upon <br />decertification of the TIF District (anticipated in 2012) to the county for redistribution to the respective <br />taxing jurisdictions through the life of the loan. <br />RECOMMENDATION <br />Staff recommends approval of the HRA Resolution. <br />ATTACHMENTS <br />^ Resolution Authorizing an Interfund Loan for Advance of Certain Costs in Connection with <br />TIF 16 Spending Plan and Authorizing a Loan to Elk River Pizza Ranch Project <br />^ Loan Agreement DRAFT dated Apri128, 2011 <br />^ Promissory Note DRAFT dated Apri128, 2011 <br />ACtlOtl Motion by Second by Vote <br />Follow Up <br />C:\Users\jjohnson\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.0utlook\SFWAYSNS\S 2 11 HRA TIF16 Action <br />Requested.doc <br />