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• Housing District 15 Years (Max is 25) <br /> • Qualified Housing District 15 Years (Max is 25) <br /> • Soils Condition District 15 Years (Max is 20) <br /> • Renewal and Renovation District 10 Years (Max is 15) <br /> • Economic Development District 8 Years (Max is 8) <br /> Policy Issue <br /> o Each project is required to meet the "but-for" test to determine the need for and level of <br /> assistance. This test and the amount of tax increment generated determines the district's <br /> term. It is difficult to facilitate a redevelopment,housing or soils condition district for less <br /> than the maximum term as the extraordinary costs involved are usually significant. <br /> o Limiting the term of the district also limits the amount of tax increment the city has to spend <br /> on its priorities within a project area. <br /> o Of all the TIF districts, the Economic Development District is most often the one limited to <br /> a lesser term. ED Districts are really"incentive" districts where it is not so much the <br /> extraordinary costs as it is an"incentive" to get a manufacturer to locate in a community. <br /> In the other districts, the costs are easily identifiable and usually significant such as <br /> demolition,relocation,environmental remediation, and the cost differential between market <br /> rate and income/rent restricted housing. <br /> 12. Developers receiving TIF assistance shall provide a minimum of twenty percent (20%) cash equity <br /> investment in the project. TIF shall not be used to supplant cash equity. <br /> 13. TIF shall not be used in circumstances where land and/or property price is in excess of fair market <br /> value. A third-party appraiser agreed upon by the city and developer will determine the fair market <br /> value of the land. <br /> 14. The developer shall demonstrate a market demand for a proposed project. TIF shall not be used to <br /> support purely speculative projects. <br /> 15. The developer shall adequately demonstrate,to the city's sole satisfaction, an ability to complete the <br /> proposed project based on past development experience,general reputation,and credit history, among <br /> other factors,including the size and scope of the proposed project. <br /> 16. For the purposes of underwriting the proposal, the developer shall provide any requested market, <br /> financial,environmental,or other data requested by the city or its consultants. <br /> 17. The city of Elk River shall only use TIF to encourage economic growth and development within the <br /> city limits (See attached map) <br /> Application Process <br /> 1. Applicant submits a complete application and a$10,000 application deposit. The application deposit <br /> shall be used toward the cost of services provided in the evaluation of financial feasibility, establishment <br /> or modification of the district, and preparation of legal documents and agreements. An additional <br /> deposit of$10,000 shall be required for projects requiring statutory redevelopment substandard tests. <br /> The applicant shall reimburse the city for professional services in excess of the initial deposit. Deposit <br /> portions not utilized shall be refunded. <br /> 2. City staff reviews the application for completeness and submits the application to the city's financial <br /> consultant for review and preparation of a financial analysis. <br /> Page 3 of 8 <br />