07-14-1992 HR MIN - Laserfiche WebLink

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• exist for seventeen to eighteen years and the Tax Increment payments will be collected for fifteen to sixteen years. At this time, Commissioner Hinkle asked if the City had a policy of collecting tax increments for an eight to ten year period. Bill Rubin indicated that staff attempted to structure the project to limit the collection of tax increments from eight to ten to twelve years, but with the increased costs, it appeared that tax increments would be collected for at least fifteen years. A basic consideration of extending the life of the TIF District is that this project meets a stated City goal of redeveloping an area that is deteriorating as a residential area and, in turn, providing additional senior housing units. At this time, Commissioner Duitsman asked why the acquisition prices were so high and why the Farmers Home Administration could not finance some of these costs. Brad Larson, Elk Terrace Ltd. Partnership, answered that Farmers Home Administration has limits on the acquisition price of sites it finances. The developer is prepared to pay this price and tax increment assistance would be used to write down the cost of the land from its current purchase price value which reflects land and buildings.. Bill Rubin indicated that the HRA does not have funds sufficient to • incur the cost associated with this project. Rather, staff is proposing that the HRA consider a note that is privately placed through a lender. This note would be repaid by annual tax increment payments collected from the apartment project. Commissioner Duitsman asked if the developer was guaranteeing the repayment of this note or if the developer was guaranteeing the value of the project that is attributable to the finished market value plus increases or adjustments for inflation and time. Bill Rubin indicated that the developer is required to sign an assessment agreement which establishes the completed minimum market value of the project. No consideration is made as to potential changes in the residential formula that is used to determine taxes. Therefore, the developer is not guaranteeing a minimum amount of taxes annually for this project. Chairman Hinkle inquired as to the potential loss of state aid from this project. Brad Larson responded by saying that the Limited Partnership is prepared to have the City-HRA certify to the County Auditor the annual amount of the loss in state aid. This amount would be included in the upcoming year's tax payment. At this time, Bill Rubin reviewed the proposed time frame to establish a Tax Increment Financing District for this project. Staff is proposing that the HRA conduct a public hearing as well as the requirement for the City Council to conduct a final public hearing on • this request. Chairman Hinkle indicated that the HRA's hearing would be much like the Planning Commission's review of items before City Council final action.