EDSR MEMORANDUM 11-10-1997 - Laserfiche WebLink

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NOV-04-97 09 :26 AM PELSTRING01 5509221 P. 03 • exploring the opportunity to acquire the 40 acres immediately south of the site, which could serve as office/showroom development as a part of the overall development. TAX INCREMENT FINANCING DISTRICT Our analysis of estimated development cost suggests that the project does not provide the potential investment returns to justify the development costs to complete the project. For this reason we would request consideration of the site as a "redevelopment" tax increment financing district. Our analysis suggests that the site would qualify as a renewal and renovation redevelopment tax increment district, with a statutory tens of fifteen years. The statutory requirements are as follows: 1. At least 70% of the parcels, by area, must be "occupied" by buildings, utilities or public improvements. To be classified as "occupied", the improvements must cover at least 15% of the site. Our review suggests that the mobile home park constitutes at least 15% of the main parcel for development. • 2. Additionally, 20% of the buildings must be termed as "substandard" and at least 50% of the buildings must be '`substandard" or require significant renovation. Based upon our review, more than 50% of the mobile homes within the park meet the statutory definition of"substandard" or requiring "substantial renovation". Although our preliminary review suggests that the site may qualify, we recognize that the EDA's legal counsel would be responsible for establishing the statutory • findings to qualify the site as a redevelopment district. We also understand that physical inspections of the buildings may be required to verify these findings. TIF DEVELOPMENT ISSUES We would appreciate the opportunity to review the project with the Elk River Economic Development Authority. We do not have a specific request for T1F funding or direct assistance at this time. Instead, we would appreciate reviewing the project in a conceptual discussion with the EDA to determine their preferences and interest in the project. In advance of the EDA meeting we will prepare additional cost detail and more information on the proposed office/showroom development. • As an introduction to this discussion and to help gain a better understanding r of the key development issues, please consider the tbIlowing: