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REQUEST FOR ACTION <br />TO ITEM NUMBER <br />Ma or & Ci Council 3.7. <br />AGENDA SECTION MEETING DATE PREPARED BY <br />Consent October 18, 2010 Catherine Mehelich, Director of <br /> Economic Develo ment <br />ITEM DESCRIPTION REVIEWED By <br />Resolution Approving Decertification of TIF District No. 21 in Tim Simon, Finance Director <br />the City of Elk River REVIEWED BY <br /> Lori ohnson, Ci Administrator <br />ACTION REQUESTED <br />In accordance with statutory requirements, the City Council is asked to adopt the attached Resolution <br />Approving Decertification of TIF District No. 21 in the City of Elk River <br />BACKGROUND/DISCUSSION <br />In August 2000, the City created Economic Development TIF District No. 21 to provide financing for <br />the new 73,000sf Faribault Foods, Inc. (formerly Softpac. Industries) manufacturing facility located on <br />Business Center Drive in Elk River. The development agreement included the provision that the <br />company create within two-years a minimum of 60 full-time equivalent jobs at $10 per hour, exclusive of <br />benefits. The company currently employs 72 people. <br />The TIF revenues were provided to the developer on a "pay-as-you-go" basis in an amount up to <br />$700,000 at 8% interest or until the expiration of the district, whichever occurred earlier. The duration of <br />the TIF District is statutorily limited to 8-years after the receipt of the first tax increment which was 2002. <br />At the end of 2010 the developer will have received $473,109 of the principal in TIF proceeds. There are <br />no statutory options to extend the duration of the district past the end of 2010. The developer has been <br />notified of the expiration. <br />FINANCIAL IMPACT <br />As a result of the decertification in 2011, all local property taxes generated by the property will be <br />distributed to the school, county, and city in the same manner as all other property taxes. The estimated <br />city portion of the property tax from this development is $38,062. <br />ATTACHMENTS <br />^ Resolution Approving the Decertification of TIF District No. 21 <br />Action Motion by Second by Vote <br />Follow Up <br />N:\Public Bodies\City Council\Council RCA\Agenda Packet\10-18-2010\IO 18 10 Decertification Action Requested.doc <br />