6.1. SR 01-25-1993 - Laserfiche WebLink

Home Browse Search

. . . Alternatives for TIF Grant Request January 6, 1993 Page 2 In reviewing and analyzing potential sources of assistance available to the company, it was concluded that the creation of a new TIF District may not be feasible. That is, based on: - the contemplated level of TIF assistance sought, - the finished market value of the expansion project, - current Assessor's market value of the vacant lot, likely capitalized interest if EDA-City borrowing is required, - limitation on the number of years tax increments may be collected, the cost of creating a new TIF District outweighs the benefits of TIF assistance. Alternatives to the creation of a new TIF District include: -No TIF assistance - Amending an existing District or Districts where the amount of new tax increments collected exceeds the debt service required by previously issued bonds. In that vein, I am suggesting that the EDA and City Council consider an amendment to TIF Districts No. 1 and No. 3 in order to provide a TIF Grant to Perf-form Products. Presumably, this request will be similar to the Chuba Company's TIF request in early 1992. TIF law enables tax increments generated from a "District" to be expended in the broader "project area" or "development district". In the case of Elk River, the entire community is located in a development district. With the Chuba request for assistance, tax increment funds from Districts No. 1 and No. 3 were expended in the broader development district and the funds were used to reimburse Mr. Chuba for certain demolition and site preparation costs associated with his office project at Evans Avenue and Main Street. Assuming that Perf-form Products can document eligible expenses for which TIF funds can be used as reimbursement, it may be possible to utilize tax increment funds from District No. 1 and No. 3 for this process. Likely eligible expenses for which the company may seek reimbursement includes: - Off site infrastructure extension of a frontage road - On site utility improvements - General site preparation. the improvements (that is, across a portion of Lot 2) Lastly, the advantage of amending an existing district results in the local taxing jurisdictions benefitting immediately from the new development. That is, since a new district is not created, the project's new property taxes are not captured by an EDA, but rather, the taxes go directly to the County for redistribution to the local jurisdictions.