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Springsted <br />MEMORANDUM <br />TO: Members of the EDA <br />Brian Beeman, Economic Development Director <br />FROM: Mikaela Huot, Vice President/Consultant <br />DATE: February 11, 2014 <br />Springsted Incorporated <br />380 Jackson Street, Suite 300 <br />Saint Paul. MN 55101 -2887 <br />Tel: 651 - 223 -3000 <br />Fax: 651 - 223 -3002 <br />www.springsted.com <br />SUBJECT: Tax Increment Financing, Tax Abatement and Business Subsidy Policy Updates <br />The Elk River City Council and Housing and Redevelopment Authority (HRA) held joint meetings on Monday, <br />November 4, 2013 and December 2, 2013 to discuss the City's existing tax increment financing (TIF) policy that was <br />initially created in 1991 and later amended in 2000 and 2006. The policy contains the purpose, objectives of tax <br />increment financing, policies for use of tax increment financing, project qualifications, application for TIF, and <br />application review worksheet. The policy lists many City objectives regarding the use of tax increment financing, <br />including creation of affordable housing; however the application review worksheet does not align with the scoring <br />and review of potential housing projects. As a result of the joint meetings, staff and Springsted were asked to update <br />the current policy to include the review of affordable housing projects. A general review and update of the existing <br />TIF policy in conjunction with development of the housing review worksheet has also occurred and was reviewed and <br />approved by the HRA at its February 3, 2014 meeting. <br />It was also advised that updates be made to the existing business subsidy and tax abatement policies to ensure <br />compliance with current statutory requirements and consistency. The purpose of this memo is to provide a brief <br />summary of the recommended changes and potential areas of discussion for the updates. . <br />Tax Increment Financing (TIF) Policy Updates <br />1. Inclusion of housing projects under Section III (b) (3) <br />2. Edit under Section III Q) <br />3. Addition of Section V Subsidy Agreement & Reporting Requirements <br />4. Edits to Section VI. Application Process for TIF (1) to be consistent with City's fee schedule <br />5. Edits to Section VI. Application Process for TIF (2) inclusion of housing projects <br />6. Edits to Section VII. Section E to be consistent with City's fee schedule <br />7. Minor edits to Section IX <br />8. Addition of Section X — Housing Review Worksheet <br />