5.1. SR 08-01-2011 - Laserfiche WebLink

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Ji Elk REQUEST FOR ACTION River To Item Number Ci Council Agenda Section Meeting Date Prepared by Administration August 1, 2011 Annie Deckert, Director of Economic Develo ment Item Description Reviewed by Resolution Approving an Amended Spending Plan for Tax Tim Simon, Finance Director Increment Financing District No. 16- Public Hearing R d by Action Requested Following a public hearing, the Council is asked to adopt attached resolution approving the amended spending plan for Tax Increment Financing District No. 16 Background/Discussion At its June 7, 2010 meeting the HRA authorized staff to proceed in amending the HRA's TIF District No. 16 (King & Main). The purpose of the amendment, as authorized by recent legislation is to utilize existing TIF revenues in order to stimulate construction or rehabilitate private development in a way that will also create or retain jobs. Under this legislation the HRA would defer its final payment of TIF obligations ($39,671.78) for 2 years in order to preserve roughly $100,000 of financing assistance for an eligible project as defined in the attached Spending Plan. A critical limitation in the amendment was the requirement that construction or renovation of the eligible project commences before July 1, 2011 and that the authority to spend the tax increments collected under this subdivision expires December 31, 2011. Recent legislation has amended the provisions to extend project commencement to July 1, 2012. At their May 2, 2011 meeting, the HRA approved a resolution authorizing a loan to the Elk River Pizza Ranch project in the amount of $90,000 to cover the SAC/WAC fees and a portion of the land purchase. This was approved by the City Council at their May 3, 2011 meeting. Staff is working with attorney Jenny Boulton to make the necessary changes to the loan agreement as it pertains to the changes in legislation. Because of the state shutdown, the Pizza Ranch Project has been delayed. Mr. McDonald has indicated the project is anticipated to be complete in October of 2011. At their August 1, 2011 meeting, the HRA modified Resolution 11-01 adopting a spending plan for TIF District 16 to reflect the recent changes in legislation as it relates to the construction commencement date. Financial Impact The estimated tax increment to be collected in 2011 is $47,840. This will bring the balance available to an estimated amount of $92,206 at the end of 2011. The original interfund loan will be repaid in 2012. C:\Users\jjohnson\AppData\Local\Micxosoft\Windows\Temporary Internet Files\Content.0utlook\SFWAYSNS\8 1 11 CC Action Requested.doc