Laserfiche WebLink
EDA Agenda Memo <br /> December 3, 1997 <br /> Page 2 <br /> 110 <br /> Elk River Industrial Park <br /> In June 1997, the EDA proceeded witha purchase of the last <br /> remaining lot in Elk River Industrial Park for a total cost of <br /> approximately $65,000. The EDA used its reserve account for this <br /> purchase. At the time of this purchase it was discussed that, upon <br /> modification of the budget in TIF District No. 5, $65,000 of the excess <br /> TIF funds would be used to repay the EDA for its purchase of the <br /> Industrial Park lot. The effect of this transaction would be that the <br /> EDA reserve dollars were simply used as an interim financing <br /> mechanism until the TIF'District No. 5 modification had been <br /> approved <br /> so that TIF dollars could then be used for this purchase. <br /> Should we proceed as previously discussed and use $65,000 of excess <br /> TIF dollars to repay the EDA, we will have in effect used tax <br /> increment dollars to purchase the Industrial Park lot. State law would <br /> then not allow us to establish a new tax increment district for a project <br /> on this Industrial Park lot due to the fact that the lot was purchased <br /> by the Authority with tax increments. <br /> It is appropriate at this time to discuss an alternate scenario for <br /> ‘IF <br /> repayment of this $65,000 to the EDA reserve. This alternate scenario <br /> would be very simple in that we would NOT use excess TIF dollars to <br /> repay the EDA, but rather establish a new TIF District on this lot at <br /> the time we had a project. We would then use the tax increment <br /> income stream over a three to four year period to repay the EDA <br /> reserve for its purchase of this lot. Staff is making the assumption <br /> that in order to induce a project on this lot, the EDA will have to <br /> provide it at no cost to the developer/business. <br /> The major risk in counting on establishment of a new TIF District to <br /> repay the EDA is that the legislature may modify the TIF legislation <br /> in a way that would make this an ineligible activity. Staff has not yet <br /> heard if there will be possible major changes to the TIF laws during <br /> this legislative session. <br /> Staff is currently working with three developers and a business entity <br /> that is interested in leasing approximately half of a 30,000 square foot <br /> building which would be constructed on this lot. The developers and <br /> the business have requested consideration of the concept of providing <br /> the lot to the project up front at no cost to either the developer or the <br /> business. Considering the timing of these discussions and the plan for <br /> a possible project on the lot by next spring or summer, staff could <br /> . proceed at this time with establishing a TIF District on the lot and <br />