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City of Elk River, Minnesota <br />Baker Tilly Municipal Advisors, LLC Page 2 <br /> <br /> <br />Section C Statement of Need and Public Purpose <br /> <br />See the Development Program for the Development District. <br /> <br /> <br />Section D Statement of Objectives <br /> <br />See the Development Program for the Development District. <br /> <br /> <br />Section E Designation of Tax Increment Financing District as an <br /> Economic Development District <br /> <br /> <br />Economic development districts are a type of tax increment financing district which consist of any project, <br />or portions of a project, which the City finds to be in the public interest because: <br /> <br />(1) it will discourage commerce, industry, or manufacturing from moving their <br />operations to another state or municipality; <br /> <br />(2) it will result in increased employment in the state; or <br /> <br />(3) it will result in preservation and enhancement of the tax base of the state; or <br /> <br />(4) it satisfies the requirements of a workforce housing project as defined below. <br /> <br /> <br />The TIF District qualifies as an economic development district in that the proposed development <br />described in this TIF Plan (see Section I) meets the criteria listed above in (1) through (3). <br /> <br />Tax increments from an economic development district must be used to provide improvements, loans, <br />subsidies, grants, interest rate subsidies, or other assistance in which at least 85% of the square footage <br />of the facilities to be constructed are used for any of the following purposes: <br /> <br /> (1) manufacturing, production, or processing of tangible personal property; <br /> <br /> (2) warehousing, storage and distribution of tangible personal property, excluding retail <br />sales; <br /> <br /> (3) research and development related to the activities listed in (1) or (2) above; <br /> <br /> (4) telemarketing if that activity is the exclusive use of the property; <br /> <br /> (5) tourism facilities (see M.S. Section 469.174, Subd. 22); <br /> <br /> (6) space necessary for and related to the activities listed in (1) through (5) above; <br /> <br />(7) a workforce housing project that satisfies the requirements under Minnesota Statutes, <br />Section 469.176, subdivision 4c, paragraph (d). <br /> <br />Tax increments from the TIF District will be used to provide financial assistance to the proposed <br />development (see Section I) as related to the construction of an approximate 113,000 square foot <br />manufacturing/warehouse/distribution building with the potential for a 40,000 square foot expansion, <br />which meets the definition as required. <br />Page 18 of 64