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Alternatives for TIF Grant Request Page 2 <br /> January 6, 1993 <br /> • In reviewing and analyzing potential sources of assistance <br /> available to the company, it was concluded that the creation of <br /> a new TIF District may not be feasible. That is, based on: <br /> - the contemplated level of TIF assistance sought, <br /> - the finished market value of the expansion project, <br /> - current Assessor's market value of the vacant lot, <br /> - likely capitalized interest if EDA-City borrowing is <br /> required, <br /> - limitation on the number of years tax increments may be <br /> collected, <br /> the cost of creating a new TIF District outweighs the benefits <br /> of TIF assistance. <br /> Alternatives to the creation of a new TIF District include: <br /> - No TIF assistance <br /> - Amending an existing District or Districts where the <br /> amount of new tax increments collected exceeds the debt <br /> service required by previously issued bonds. <br /> In that vein, I am suggesting that the EDA and City Council <br /> consider an amendment to TIF Districts No. 1 and No. 3 in order <br /> • to provide a TIF Grant to Perf-form Products . Presumably, this <br /> request will be similar to the Chuba Company's TIF request in <br /> early 1992 . TIF law enables tax increments generated from a <br /> "District" to be expended in the broader "project area" or <br /> "development district" . In the case of Elk River, the entire <br /> community is located in a development district. With the Chuba <br /> request for assistance, tax increment funds from Districts No. <br /> 1 and No. 3 were expended in the broader development district <br /> and the funds were used to reimburse Mr. Chuba for certain <br /> demolition and site preparation costs associated with his <br /> office project at Evans Avenue and Main Street. <br /> Assuming that Perf-form Products can document eligible expenses <br /> for which TIF funds can be used as reimbursement, it may be <br /> possible to utilize tax increment funds from District No. 1 and <br /> No. 3 for this process. Likely eligible expenses for which the <br /> company may seek reimbursement includes : <br /> - Off site infrastructure improvements (that is, the <br /> extension of a frontage road across a portion of Lot 2) <br /> - On site utility improvements <br /> - General site preparation. <br /> Lastly, the advantage of amending an existing district results <br /> in the local taxing jurisdictions benefitting immediately from <br /> the new development. That is, since a new district is not <br /> • created, the project's new property taxes are not captured by <br /> an EDA, but rather, the taxes go directly to the County for <br /> redistribution to the local jurisdictions. <br />