7.6. SR 04-16-2018 - Laserfiche WebLink

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City of Elk River, Minnesota SPRINGSTED Page 3 Housing districts are a type of tax increment financing district that consist of a project intended for occupancy, in part, by persons or families of low and moderate income. Low and moderate income is defined in federal, state, and municipal legislation. A project does not qualify if more than 20% of the square footage of buildings that receive assistance from tax increments consist of commercial, retail or other nonresidential use. In addition, housing districts are subject to various income limitations and requirements for residential property. For owner occupied residential property, 95% of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 143(f) of the Internal Revenue Code. For residential rental property, the property must satisfy the income requirements for a qualified residential rental project as defined in section 142(d) of the Internal Revenue Code. The TIF District meets the above qualifications for these reasons: 1. The planned improvements consist of the following: a. Approximately 40 total units, for which the following will apply: o 40 multifamily housing units with at least 20% (8) of the rental units will be occupied by persons with incomes no greater than 50% of county median income 2. At least 80% of the square footage of the building(s) in the proposed development will be used for residential purposes. No more than 20 percent of the square footage of buildings that receive assistance from tax increments may consist of commercial, retail, or other nonresidential uses. 3. The City will require in the development agreement that the income limitations for the rental units in the housing project will apply for the duration of the TIF District. Tax increments derived from a housing district must be used solely to finance the cost of housing projects as defined in section 469.174, subd. 2 and 469.176 of the TIF Act. The cost of public improvements directly related to the housing projects and the allocated administrative expenses of the City may be included in the cost of a housing project. The City anticipates using tax increment revenues to finance a portion of the extraordinary costs associated with providing the affordable housing units. Section F Duration of the TIF District Housing districts may remain in existence 25 years from the date of receipt of the first tax increment. Modifications of this plan (see Section Z) shall not extend these limitations. The City reserves the right to allow the TIF District to remain in existence the maximum duration allowed by law but anticipates the TIF District could be decertified prior to that time after 15 years of collection (projected to be 2035). All tax increments from taxes payable in the year the TIF District is decertified shall be paid to the City. Pursuant to Minnesota Statutes, Section 469.175, subd. 1(b), the City specifies 2021 as the first year in which it elects to receive tax increment from the TIF District, which is no later than four years following the year of approval of the TIF District. Thus, the City may collect increment from the district through December 31, 2046 but anticipates that the TIF District could be decertified prior to that time pursuant to the terms of assistance to be a maximum of 15 years. Section G Property to be Included in the TIF District The TIF District will consist of one parcel of land located within the Project Area. A map showing the approximate location of the TIF District is shown in Exhibit I. The PID number and legal description of the existing parcel that will comprise the TIF District is described below: