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<br />e <br /> <br />space through a townhouse association arrangement. The project <br />gives companies the opportunity to build equity rather than to <br />pay rent to a landlord. Construction of the project is <br />scheduled for this year and will be completed during the winter <br />months. The project will have a finished market value of <br />approximately $540,000. <br /> <br />By comparison, the 1992 project contained approximately 6,500 <br />square feet and has a finished market value of $400,000. Two <br />of the three townhouse units have been sold and the final unit <br />is available for sale. <br /> <br />TIF Historical <br /> <br />Early on, TIF was used as an urban renewal tool. That is, <br />funds were used to encourage inner-city redevelopment projects <br />wherein a developer or end user was reimbursed for costs such <br />as: demolition, site preparation, civil/engineering, parking <br />improvements, water and sewer extensions, landscaping <br />enhancements, curb/sidewalk improvements, etc. <br /> <br />Over time, the use of TIF has been expanded to include housing <br />projects and economic development projects (such as Alltool <br />Manufacturing, Tescom Corporation, Timron Precision Gear, etc.). <br /> <br />e <br /> <br />But/For Test <br /> <br />The classic test for determining whether or not a TIF Grant was <br />appropriate rests with the But/For Test. That is, after <br />conducting a public hearing on this matter, the governing board <br />of a city must determine that, "But/For the use of TIF <br />incentive, this project would not occur in the reasonable, <br />foreseeable future". <br /> <br />This test, however, does not apply to the modification of TIF <br />Plans No. 1 and No.3. Why? The City Council, through the <br />public hearing process, is simply modifying an existing Plan to <br />allow for the expenditure of funds from a respective District <br />to be used for a very narrow list of eligible expenditures as <br />authorized by Minnesota Statutes. Among those limited eligible <br />expenditures include reimbursement for demolition costs, site <br />preparation, compaction, etc. <br /> <br />If the But/For Test were required in this matter, it would <br />surely have to be required for previous TIF Plan amendments as <br />well. This test was not applied to the use of TIF funds by the <br />Elk River City Council for: <br /> <br />e <br /> <br />Woodland Trails <br />Railroad Trail <br />Orono Park <br />Woodland Trail Expansion <br />Main Street Redevelopment Site <br />Library Expansion <br />