7.0. EDSR 05-13-1996 - Laserfiche WebLink

Home Browse Search

possibility of simply using the county assessing department recommendation. In regards to the value of the lot, the city staff and Mr. McChesney are in agreement that the value of the lot will be $35,000 and this is the amount that will be written down through the pay-as-you-go TIF project. Currently, the county assessing department has a value of$30,000 per acre on the vacant lots in the McChesney Industrial Park and this value increases to $35,000 per acre when the lots are improved with the construction of a new facility. The actual value of the land may be slightly more than $35,000, but everyone is comfortable using this amount as the maximum TIF subsidy on a pay-as- you-go basis. The current city TIF policy calls for a maximum subsidy of 15 percent of the project's finished value. Based on the uncertainty of the finished market value that will be placed on the project by the county, and based on the desire to establish an exact amount of TIF subsidy, it is recommended that the EDA accept this $35,000 TIF subsidy amount on a pay-as-you-go basis. With previous industrial and manufacturing expansions, TIF funds have been used by the city/EDA to assist local companies with their projects. Recent examples include Alltool Manufacturing, Timron Precision Gear, Tescom Corporation, and Marketech, Inc. TIF funds have been used to • reduce project costs relating to land acquisition and site development components of the project. With each manufacturing project, an economic development (ED) district is established. The ED districts are designed to only last a few years as each one of these new districts results in either a state aid loss or a local contribution to the project. The local contribution option is new (1995 law) and one that the city favors because it carries a lower overall cost to the city. The local option is a 10 percent contribution of the annual tax increment. It is recommended that this option be taken by the city for this project. The source of funds would be the EDA revenues that have been generated from the sale of the Industrial Park lot to the School District. With this McChesney project, the local contribution would be approximately $1,000 per year for the three or four year life of the district. More detailed information on the finance of the project and the local contribution will be available in the next few weeks. Due to the fact that local financial losses are part of all new TIF districts, it has been the EDA and City Council consensus that they would evaluate each project on a case by case basis. I believe this evaluation took place in a preliminary manner at the last EDA meeting and that support for this project was voiced. The city would not be incurring any debt on this pay-as- you-go project, but would be refunding tax revenue as it is collected until the • cost or value of the land ($35,000) was recaptured and distributed to