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$60,000 TIF grant times 10 percent equals $6,000 "local <br />• contribution". <br />Pav-as-vou-eo TIF District <br />It is proposed that TIF District No. 12 be structured as apay-as-you-go <br />District. Rather than the city/EDA borrowing funds for an $80,000 TIF grant <br />or a $60,000 TIF grant, Mowry/Neos would incur the acquisition costs and <br />site development costs up front. As the new facility begins generating taxes, <br />the city rebates the new property taxes (otherwise known as the tax <br />increment) back to Mowry/Neos twice ayear - in July and in December. No <br />bonds are required, the life of the TIF District is reduced, the developer <br />company absorbs the development costs up front, yet the city/EDA is able to <br />retain an existing company and participate in its expansion project. At least <br />one TIF District in Elk River, the Jarmoluk Dental Center TIF District, was <br />structured as apay-as-you-go TIF District. <br />Action Reauested <br />After conducting the public hearing on the TIF Plan for TIF District No. 12, <br />the City Council is asked to adopt the attached resolution. Approval of the <br />TIF Plan is subject to the execution of a Contract for Private Development, <br />• an Assessment Agreement, and a Tax Increment Revenue Note (typically <br />used in pay-as-you-go Districts; the Note indebts the city to Mowry/Neos). <br />Approval of the TIF Plan is also subject to the 15 percent maximum TIF <br />grant consistent with the TIF policy guidelines. <br />e <br />