7.4. SR 09-21-2020 - Laserfiche WebLink

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Memorandum To: Amanda Othoudt, Economic Development Director From: Mikaela Huot, Director Date: September 21, 2020 Amendment to the Tax Increment Financing Plan for Tax Increment Subject: Financing District No. 24 Background The City of Elk River adopted the tax increment financing plan for Tax Increment Financing (Redevelopment) District No. 24 on July 3, 2017. The purpose for creation of the TIF District was to facilitate redevelopment of the properties that were included within the district and allow for new development to occur. At the time the TIF District was established, the City also adopted an interfund loan resolution that authorized financing of the identified redevelopment costs in advance and to use future tax increment revenues as repayment. The City financed upfront a portion of the project costs related to land assembly (acquisition) and site development to facilitate redevelopment of the project. As the project commenced, there were some budget adjustments between categories of eligible costs that were intended to be financed with tax increment revenues. As a result, it was necessary to amend the budget to provide the City with the ability to recoup eligible incurred costs. Although we are not increasing the total estimated project costs of $1,406,393, we are increasing the amount of capital costs (acquisition and site improvements) to be consistent with the adopted interfund loan amount with a resulting decrease in interest costs. This budget adjustment requires a public hearing prior to City Council consideration for approval. As required by statutes, notice was provided to the County and School District, with public hearing notice published on September 5. It is important to note the budget amendment does not increase the total projected tax increment revenues or project costs. The table below illustrates the proposed budget amendment for consideration: Modification Project Costs Original (2017) (2020) Land/building acquisition $500,000 $593,500 Site improvements/preparation costs $167,000 $88,495 Utilities $0 $0 Other public improvements $0 $118,005 Construction of affordable housing $0 $0 Administrative expenses $140,640 $140,640 Subtotal project costs $807,640 $940,640 Interest $598,753 $465,753 Total estimated project costs $1,406,393 $1,406,393 Thank you for the opportunity to be of assistance to the City of Elk River. Please contact me at 651.368.2533 or Mikaela.huot@bakertily.com with any questions or comments.