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III. PUBLIC PURPOSE OBJECTIVES OF BUSINESS SUBSIDIES <br />In accordance with the MN Business Subsidy Law, the City will consider using business <br />subsidies to assist private development projects to achieve one or more of the following <br />public purpose objectives: <br />• To retain local jobs and/ox increase the number and diversity of jobs that offer <br />stable employment and/or attractive wages and benefits. <br />• To enhance and diversify the City of Elk River's tax base. <br />• To encourage additional unsubsidized private development in the area, either <br />directly or indirectly through "spin off 'development. <br />• To achieve development on sites which would not be developed without <br />business subsidies assistance. <br />• To remove blight and/or encourage development of commercial and industrial <br />areas in the city that result in higher quality development ox redevelopment and <br />private investment. <br />• To offset increased costs of development of specific properties when the unique <br />physical characteristics of the site may otherwise preclude private investment. <br />• To create opportunities fox the construction, operation and maintenance of <br />affordable housing. <br />IV. GENERAL POLICIES FOR THE USE OF BUSINESS SUBSIDIES <br />A. Business subsidy assistance will be provided from the City, by a "pay-as-you-go" <br />note method, to the developer if the business subsidy is tax increment financing ox <br />tax abatement. Requests fox up front financing will be considered on a case-by-case <br />basis. <br />B. A developer requesting business subsidy assistance must demonstrate, to the <br />satisfaction of the City, sufficient cash equity investment in the project as required <br />within the Ciry's policy for the particular form of subsidy. <br />C. Business subsidy will not be provided in circumstances where land and /ox property <br />price is demonstrated by the County Assessor to be in excess of fair market value. <br />This would normally be where the acquisition price is more than 10% in excess of <br />market value. <br />D. A developer must be able to demonstrate to the City, ox, if applicable, to the <br />underwriting authority, a market-demand for a proposed project. <br />E. Business subsidy will not be used in cases where the subsidy would create an unfair <br />and significant competitive fmancial advantage over other similar projects in the area. <br />F. Business subsidy will not be used fox projects that would place extraordinary <br />demands on city infrastructure and services. <br />G. If requested by the City, the developer shall provide adequate fmancial guarantees to <br />ensure completion of the project, including, but not limited to: assessment <br />agreements, letters of credit, cash escrows, and personal guaranties. <br />City of Elk River <br />Tax Increment Policy & Application <br />1~° Draft Modified Apri12006 <br />Page 7 of 14 <br />