6.1. SR 11-01-2004 - Laserfiche WebLink

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Consider Establishment ofTIF District No. 22 City Council Meeting November 1, 2004 Page 2 of 2 Tax Increment Financin~ District No. 22 In June and July 2004 the HRA and City Council authorized staff and fiscal consultants to prepare a Tax Increment Financing (TIP) Plan for the establishment of a TIF District for the proposed MetroPlains Downtown Revitalization Project. The District will be a redevelopment tax increment financing district and contains 10 parcels. Tax increments collected from the District will enable the City of Elk River to facilitate the redevelopment of the area, which includes a four story building with approximately 10,000 square feet of commercial space and 52 for-sale residential units on the Bluff Block. The Jackson Block includes a three story building with approximately 10,000 square feet of commercial space and 32 rental housing units. The proposed location of the District is indicated on the map within the attached Tax Increment Financing Plan. Business Subsidy The City's Business Subsidy Policy and Tax Increment Financing Policy are written assuming industrial development type projects rather than redevelopment. The TIF Proposal Review Worksheet from the City TIF Application scores projects based on job creation and wage levels therefore it skews the legitimacy of utilizing the application for this type of project. According to the State business subsidy law, redevelopment and housing projects are exempt from business subsidy requirements. Therefore only the commercial portion of the Jackson Block project qualifies as a business subsidy. The minimum wage for new jobs within the City's Business Subsidy Policy is $15.00 per hour exclusive of benefits. A majority of the new jobs created within the commercial portion of Jackson Block will be at standard commercial retail/ service wages much below the City's minimum wage requirement. Therefore staff recommends that since the City's goals for the Downtown Revitalization project are primarily redevelopment and the construction of housing, and job creation is not a goal of this project consequendy after the public hearing staff recommends that the City set the wage and job goals in the business subsidy agreement at zero. The City Council will consider establishing the job and wage goals for the project within the development agreement at the time it is presented. Recommendation The HRA recendy adopted a resolution recommending to the City Council for the establishment of a Downtown Phase I Tax Increment Financing District No. 22 and adopting a Tax Increment Financing Plan. Following the public hearing, the staff recommends that the City Council adopt the attached Resolution Adopting a Modification to the Development Program for Development District No.1; and Establishing Downtown Phase I Tax Increment Financing District No. 22 Therein and Adopting a Tax Increment Financing Plan Therefor. H: \SHRDOC\Downrown Revitalization \ TIF\ 11.1.04 City Council.doc