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<br /> <br /> 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 /> <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 /> <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 /> <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 /> <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 /> <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 /> <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 /> <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 /> <br /> <br />Application Process <br /> <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 /> <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 />