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<br />rll --'\) <br />( )j <br />fl~ <br /> <br />ITEM 3. <br /> <br /> <br />TO: <br /> <br />FROM: <br /> <br />MAYOR & CITY COUNCIL <br />WILLIAM RUBIN, ED COORDINAT~VL- <br /> <br />DATE: DECEMBER 8, 1993 <br /> <br />SUBJECT: PUBLIC HEARING ON TAX INCREMENT <br />FINANCING PLAN FOR TAX INCREMENT <br />FINANCING DISTRICT NO. 12 <br />(KJELLBERG'S CARPET AND INTERIORS <br />REDEVELOPMENT PROJECT) <br /> <br />INTRODUCTION <br /> <br />At its October 18th meeting, the Elk River City Council <br />authorized a public hearing for December 13, 1993, to consider <br />the Tax Increment Financing Plan for Tax Increment Financing <br />District No. 12. <br /> <br />BACKGROUND <br /> <br />e <br /> <br />The Elk River Economic Development Authority (EDA) is proposing <br />the creation of Tax Increment Financing District No. 12 which <br />will be comprised of two parcels of land located in the 600 <br />block of Main Street. The EDA currently owns these parcels, <br />and, subject to the approval of the TIF Plan and the execution <br />of a Contract for Private Development, the parcels would be <br />conveyed to Mr. Kurt Kjellberg/Kjellberg's Carpet and <br />Interiors, 16862 Highway 10, Elk River, Minnesota (the <br />developer) . <br /> <br />The developer seeks up to $235,000 in tax increment financing <br />assistance to support the proposed construction of a 12,000 <br />square foot retail facility in the Elk River Central Business <br />District. This is an increase in the original request for <br />assistance in the amount of $165,000. The original request was <br />based on assistance for site preparation costs only. At the <br />EDA TIF public hearing, Commissioners agreed to extend the life <br />of the TIF District out an additional three to four years to <br />also recover its investment in the land price. Hence, the <br />developer benefits from both site preparation costs and the <br />land write down costs (less a $40,000 subordinated mortgage). <br />Together, the TIF subsidy totals $235,000. <br /> <br />e <br /> <br />The Elk River EDA is proposing the creation of a "Redevelopment <br />TIF District". It is estimated that District No. 12 would last <br />from 1993 through 2009; inclusive. During this time, the <br />EDA/City would collect new property taxes beginning in 1996 and <br />ending in the year 2009. These funds would be used to repay <br />the EDA for its costs associated with the reimbursement to the <br />developer for the site preparation costs, and, for repayment of <br />the value of the land. The City Council should note that the <br />$70,000 repaid in the land value should be reallocated to, say, <br /> <br />P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425 <br />