7.2 HRSR 11-06-2017 - Laserfiche WebLink

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11.4. All TIF assistance shall must be accompanied by a signed development agreement including a minimum assessment value. The developer must provide additional financing guarantees to ensure completion of the project,including,but not limited to: letters of credit,personal guarantees, corporate guarantees, etc. 12.5. TIF District's shall be limited to the minimum term necessary to meet the project needs. Only projects superseding exceeding the objectives identified in this policy will be considered to exceed the following general thresholds: • Redevelopment District 15 Years (Max is 265) • Housing District 15 Years (Max is 265) • Qualified Housing District 15 Years (Max is 25) • Soils Condition District 15 Years (Max is 210) • Renewal and Renovation District 10 Years (Max is 165) • Economic Development District 8 Years (Max is 98) 13.6. Policy IssueConsiderations • Each project is required to meet the"but-for" test to determine the need for and level of assistance. This test and the amount of tax increment generated determines the district's term. It is difficult to facilitate a redevelopment,housing or soils condition district for less than the maximum term as the extraordinary costs involved are usually significant. • Limiting theThe term of the district also limitscould coincide with the amount of tax increment the city has to spend on its priorities within a project area. • Of all the TIF districts, the Economic Development District is most often the one limited to a lesser term. Economic Development Districts are really"incentive" districts where it is not so much the extraordinary costs as it is an"incentive" to get a manufacturer business to locate in a community. In the other districts, the costs are easily identifiable and usually significant such as demolition,relocation,environmental remediation,and the cost differential between market rate and income/rent restricted housing. 14.7. Developers receiving TIF assistance shall provide a minimum of twenty percent (1020%) cash equity investment in the project. TIF shall will not be used to supplant cash equity. 15.8. TIF shall will not be used in circumstances where land and/or property price is in excess of fair market value. A third-party appraiser agreed upon by the city and developer will determine the fair market value of the land. 16.9. The developer shall demonstrate a market demand for a proposed project. TIF shall not be used to support purely speculative projects. 17.10. The developer shall adequately demonstrate,to the city's sole satisfaction, an ability to complete the proposed project based on past development experience,general reputation,and credit history,among other factors,including the size and scope of the proposed project. 18.11. For the purposes of underwriting the proposal, the developer shall provide any requested market, financial, environmental, or other data requested by the city or its consultants. 19.12. The city of Elk River shall only use TIF to encourage economic growth and development within the city limits. (See attached map) Application Process Page 3 of 8