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<br />. <br /> <br />Pursuant to Minnesota law, tax increment generated by <br />development within the TIF District may be captured <br />by the City for a period of up to eight years. <br />During this period other taxing jurisdictions will <br />continue to receive taxes from the property within <br />the TIF District based on the current net tax <br />capacity. However, the current net tax capacity is <br />$0. <br /> <br />2. <br /> <br />Estimated Impact of District No. 9 on the Taxing <br />Jurisdictions Assuming None of the Captured Net Tax <br />Capacity is Available to Taxing Jurisdictions Without <br />Creation of District No.9: <br /> <br />The Economic Development Authority of the City of Elk <br />River has determined that the Tescom project would <br />not reasonably be expected to occur without the <br />creation of TIF District No. 9 and the use of tax <br />increment financing. Therefore, none of the net tax <br />capacity captured during the term of this TIF <br />District would be available to other taxing <br />jurisdictions without the creation of this district. <br /> <br />3. <br /> <br />Additional information on the impact of Tax Increment <br />Financing District No. 9 on the other local taxing <br />jurisdictions can be found in Exhibit E. <br /> <br />. <br /> <br />H. STUDIES AND ANALYSIS USED TO DETERMINE THE NEED FOR TAX <br />INCREMENT FINANCING <br /> <br />The Elk River EDA and City <br />the Tescom Corporation, <br />reasonably be expected to <br />investment within the <br />Therefore, the use of Tax <br />is deemed necessary. <br /> <br />Council have determined that <br />Inc. expansion project cannot <br />occur solely through private <br />reasonably foreseeable future. <br />Increment Financing assistance <br /> <br />This determination has been made based on the following: <br /> <br />- The Company was purchased, through a Leveraged <br />Buy-Out (LBO), in December, 1986. While Tescom <br />Corporation, Inc. is still highly leveraged, it has <br />proven the ability to service its debt as illustrated <br />by the significant reduction over the five and one <br />half years since the LBO. Tax Increment assistance <br />is needed to reduce overall project costs to ensure <br />Tescom remains a financially stable and profitable <br />company after its expansion. <br /> <br />. <br /> <br />- Tescom Corporation, Inc. owns and operates a second <br />facility in Watertown, South Dakota. The Company is <br />currently reviewing its options for appropriate <br />locations for expansion. While Elk River offers some <br />