3.7. SR 10-18-2010REQUEST FOR ACTION
TO ITEM NUMBER
Ma or & Ci Council 3.7.
AGENDA SECTION MEETING DATE PREPARED BY
Consent October 18, 2010 Catherine Mehelich, Director of
Economic Develo ment
ITEM DESCRIPTION REVIEWED By
Resolution Approving Decertification of TIF District No. 21 in Tim Simon, Finance Director
the City of Elk River REVIEWED BY
Lori ohnson, Ci Administrator
ACTION REQUESTED
In accordance with statutory requirements, the City Council is asked to adopt the attached Resolution
Approving Decertification of TIF District No. 21 in the City of Elk River
BACKGROUND/DISCUSSION
In August 2000, the City created Economic Development TIF District No. 21 to provide financing for
the new 73,000sf Faribault Foods, Inc. (formerly Softpac. Industries) manufacturing facility located on
Business Center Drive in Elk River. The development agreement included the provision that the
company create within two-years a minimum of 60 full-time equivalent jobs at $10 per hour, exclusive of
benefits. The company currently employs 72 people.
The TIF revenues were provided to the developer on a "pay-as-you-go" basis in an amount up to
$700,000 at 8% interest or until the expiration of the district, whichever occurred earlier. The duration of
the TIF District is statutorily limited to 8-years after the receipt of the first tax increment which was 2002.
At the end of 2010 the developer will have received $473,109 of the principal in TIF proceeds. There are
no statutory options to extend the duration of the district past the end of 2010. The developer has been
notified of the expiration.
FINANCIAL IMPACT
As a result of the decertification in 2011, all local property taxes generated by the property will be
distributed to the school, county, and city in the same manner as all other property taxes. The estimated
city portion of the property tax from this development is $38,062.
ATTACHMENTS
^ Resolution Approving the Decertification of TIF District No. 21
Action Motion by Second by Vote
Follow Up
N:\Public Bodies\City Council\Council RCA\Agenda Packet\10-18-2010\IO 18 10 Decertification Action Requested.doc
CITY OF ELK RIVER
RESOLUTION 10-
RESOLUTION APPROVING THE DECERTIFICATION OF TAX
INCREMENT FINANCING DISTRICT NO. 21 WITHIN DEVELOPMENT
DISTRICT NO. I IN THE CITY OF ELK RIVER
WHEREAS, on August 28, 2000, the City of Elk River (the "City") created its Tax
Increment Financing District No. 21., (the "District") within its Development District No. 1
(the "Project"); and
WHEREAS, as of the date hereof all bonds and obligations to which tax increment from
the District had been pledged have been paid in full and all other costs of the Project have
been paid; and
WHEREAS, the Tax Increment Financing plan adopted on August 28, 2000 for Tax
Increment Financing District No. 21 requires, pursuant to M.S. 469.176, Subd.1, that the
duration of the Tax Increment Financing District 21 will be eight years after the date of
receipt by the City of the first tax increment; and
WHEREAS, the first receipt of tax increment was 2002 and eight years after the date of
the first receipt of increment is taxes payable 2010; and
WHEREAS, the continuance of TIF District No. 21 serves no public or private purpose;
and
WHEREAS, the City desires by this resolution to cause the decertification due to its
payment of obligations of the District after which all property taxes generated by property
within the Districts will be distributed in the same manner as all other property taxes
beginning with taxes payable 2011.
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River
that the city's staff shall take such action as is necessary to cause the County Auditor of
Sherburne County to decertify the District as a tax increment district and to no longer remit
tax increment from the District to the City.
DATED: October 18, 2010
Stephanie Klinzing, Mayor
ATTEST:
Tina Allard, City Clerk
N:\Public Bodies\Ciry Council\Resoludons\Deceitif Resolurion.doc