5. HRSR 08-01-2011 - Laserfiche WebLink

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El REQUEST FOR ACTION River To Item Number Housin & Redevelo went Authori Agenda Section Meeting Date Prepared by August 1, 2011 Annie Deckert, Director of Economic Develo ment Item Description Reviewed by Consider Modifying Resolution 11-01 Adopting a Spending Plan Tim Simon, Finance Director for Tax Increment Financing District No. 16 Reviewed by Action Requested Adopt attached modified Resolution 11-01. Background/Discussion At its June 7, 2010 meeting the HRA authorized staff to proceed in amending the HRA's TIF District No. 16 (King & Main). The purpose of the amendment, as authorized by recent legislation is to utilize existing TIF revenues in order to stimulate construction or rehabilitation of private development in a way that will also create or retain jobs. Under this legislation the HRA would defer final payment of TIF obligations ($39,671.78) to itself for 2 years in order to provide roughly $100,000 of financing assistance to an eligible project as defined in the attached Spending Plan. A critical limitation in the amendment was the requirement that construction or renovation of the eligible project commences before July 1, 2011 and that the authority to spend the tax increments collected under this subdivision expires December 31, 2011. Recent legislation has amended the provisions to extend project commencement to July 1, 2012. Contingent upon HRA approval, the City Council will be holding a public hearing and adoption of the amended spending plan on August 15, 2011. At the May 2, 2011, the HRA authorized a resolution authorizing a loan to the Elk River Pizza Ranch project in the amount of $90,000 to cover the SAC/WAC fees and a portion of the land purchase. This was approved by the City Council at their May 3, 2011 meeting. Staff is working with attorney Jenny Boulton to make the necessary changes to the loan agreement as it pertains to the changes in legislation. Because of the state shutdown, the Pizza Ranch Project has been delayed. Mr. McDonald has indicated the project is anticipated to be complete in October of 2011. Financial Impact The estimated tax increment to be collected in 2011 is $47,840. This will bring the cash balance to an estimated amount of $92,206 at the end of 2011. The original interfund loan will be repaid in 2012. Attachments • Memorandum re: TIF Provisions in Omnibus Technical Tax Bill • Modifying Resolution 11-01 Adopting a Spending Plan for Tax Increment Financing District No. 16 N:\Departments\Community Development\Economic Development\TIF\TIF16\Amendment\Amendment Deadline Extension\8.1.11 Action Requested.doc