4.1. SR 02-17-1998 ·
,lver TO:
.~FROM:
DATE:
SUBJECT:
Item 4.1.
MEMORANDUM
Mayor & City Council
Paul T. Steinman, Director of Economic
Development
February 17, 1998
Hold Public Hearing Regarding
Establishment of Tax Increment
Financing District No. 17 and Adopt
Resolution No. 98- Approving Tax
Increment Plan for Tax Increment
Financing District No. 17
Issue
The issue before the Council at this time is to take the final step to formally
adopt and approve the Tax Increment Financing Plan for District No. 17
(Dave Decker project). This final action consists of holding a pubhc hearing
to allow an opportunity for pubhc input and comment, and passing
Resolution No. 98-__ approving the Tax Increment Plan for the District.
Background
Dave Decker made a formal request for $160,000 in tax increment assistance
in October 1997. As explained in his application which is attached to this
memo, the $160,000 subsidy would be used for the purpose of completing site
improvements necessary to facilitate the construction of Phase I of a 70,000
square foot multi tenant industrial facility. Phase I is a total of 25,000
square feet.
There are two specific activities which will be completed upon approval of the
Plan by the City Council. These activities are:
EDA approval of a Development Agreement between the EDA and
David Decker
The developer has agreed in concept to the following two major terms
of the Development Agreement:
· Lessors of the facility will be only those that comply with
Minnesota Statutes, Section 469.176, Sub& 4c, which states
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
that at least 85 percent of the use of the property will be for
the purpose of manufacturing or production of tangible
personal property, warehousing, storage, and distribution of
tangible personal property, research and development
activities, telemarketing, tourism facilities; or space
necessary for and related to the listed activities.
The $160,000 incentive will be provided to the developer
beginning in the year 2000 and continuing until paid in full.
The only funds which will be taken from this TIF District
other than those provided to the developer include a 10
percent administration fee. It is estimated, based upon the
scenario of a minimum finished market value of $850,000,
that the District will generate approximately $24,000 to
$26,000 per year and the developer will be paid their
incentives in the years 2000 through 2006.
2. $50,000 Micro Loan Request
Together with the tax increment application, Mr. Decker submitted an
application for a $50,000 micro loan to be used in conjunction with this
project. Staff felt it would be most appropriate for final action to be
taken on the Tax Increment Plan prior to considering action on the
micro loan. It is anticipated the EDA Finance Committee will act on
the micro loan request and a final recommendation on such request
will come before the EDA at the same time a Development Agreement
is submitted for approval on this project - March 9, 1998.
Recommendation
Staff recommends the Council approve Resolution 98-__ Modifying
Municipal Development District No. I and Adopting the Development
Program Therefor; and Establishing Within Municipal Development District
No. 1, Tax Increment Financing District No. 17 and Adopting the Related
Tax Increment Financing Plan Therefor.
Attachments
Resolution 98-
Tax Increment Financing Plan for Tax Increment Financing District No.
17
RESOLUTION 98 -
CITY OF ELK RIVER
COUNTY OF SHERBURNE
STATE OF MINNESOTA
RESOLUTION MODIFYING DEVELOPMENT DISTRICT NO. 1 AND
ADOPTING THE DEVELOPMENT PROGRAM THEREFOR; AND
ESTABLISHING WITHIN DEVELOPMENT DISTRICT NO. 1, TAX
INCREMENT FINANCING DISTRICT NO. 17, AND ADOPTING THE
RELATED TAX INCREMENT FINANCING PLAN THEREFOR.
BE IT RESOLVED by the City Council (the "Council") of the City of Elk
River, Minnesota (the "City") as follows:
Section 1. - Recitals.
1.01. The EDA has heretofore established Municipal Development District
No. i and adopted the Development Program therefor. It has been proposed that
the City modify Development District No. i and adopt the Development Program
therefor and establish within Development District No. 1, Tax Increment Financing
District No. 17 ("District No. 17"), and adopt the related Tax Increment Financing
Plan therefor (collectively, the "Program" and "Plan"); all pursuant to and in
conformity with existing law, including Minnesota Statutes, Sections 469.090
through 469.1081 and 469.174 through 469.179, inclusive, as amended, all as
reflected in the Program and Plan and presented for the Council's consideration.
1.02. The Council has investigated the facts relating to the Program and
Plan.
1.03. The City has performed, or will perform, all actions required by law to
be performed prior to the adoption of the Program and Plan by the City, including,
but not limited to, notification of Sherburne County and School District No. 728
having taxing jurisdiction over the property included in District No. 17, a request for
review of and written comment on the Program and Plan by the City Planning
Commission, and a request that the Council schedule a public hearing on the
Program and Plan upon published notice as required by law.
1.04 Certain written reports (the "Reports") relating to the Program and
Plan and to the activities contemplated therein have heretofore been prepared by
staff and submitted to the Council and/or made a part of the City files and
proceedings on the Program and Plan. The Reports include data, information and/or
substantiation constituting or relating to (1) the "studies and analyses" on why the
new District No. 17 meets the so-called "but for" test; and (2) the basis for the other
findings and determinations made in this resolution. The Council hereby confirms,
ratifies, and adopts the Reports, which are hereby incorporated into and made as
fully a part of this resolution to the same extent as if set forth in full herein.
Section 2. - Findings for the Adoption and Approval of the Program and Plan.
2.01. The Council hereby finds that the Program and Plan, are intended
and, in the judgment of this Council, the effect of such actions will be, to provide an
impetus for development in the public purpose and accomplish certain objectives as
specified in the Program and Plan, which are hereby incorporated herein.
Section 3. - Approval and Adoption of the Program and Plan.
3.01. The Council hereby finds that Tax Increment Financing District No.
17 is in the public interest and is an "economic development district" under
Minnesota Statutes, Section 469.174, subd. 12.
3.02. The Council further finds that the proposed development would not
occur solely through private investment within the reasonably foreseeable future
and that the increased market value on the site that could reasonably be expected to
occur without the use of tax increment financing would be less than the increase in
the market value estimated to result from the proposed development after
subtracting the present value of the projected tax increments for the maximum
duration of District No. 17 permitted by the Tax Increment Financing Plan, that the
Program and Plan conform to the general plan for the development or
redevelopment of the City as a whole; and that the Program and Plan will afford
maximum opportunity consistent with the sound needs of the City as a whole, for
the development of District No. 17 by private enterprise.
3.03. The City elects to make a qualifying local contribution in accordance
with Minnesota Statutes, Section 273.1399, subd. 6(d), in order to qualify District
No. 17 for exemption from state aid losses set forth in Section 273.1399 subd. (c).
3.04. The Council further finds, declares, and determines that the City
made the above findings stated in this Section and has set forth the reasons and
supporting facts for each determination in writing, attached hereto as Exhibit A.
Section 4. Approval and Adoption of the Program and Plan
4.01. The Program and Plan, as presented to the Council on this date,
including without limitation the findings and statement of objectives contained
therein, are hereby approved, ratified, established, and adopted and shall be placed
on file in the office of the EDA Executive Director.
4.02. The staffofthe City, the City's advisors and legal counsel are
authorized and directed to proceed with the implementation of the Program and
Plan and to negotiate, draft, and prepare and present to this Council for its
consideration all further plans, resolutions, documents, and contracts necessary for
this purpose.
4.03. The Auditor of Sherburne County is requested to certify the original
net tax capacity of District No. 17, as described in the Program and Plan, and to
certify in each year thereafter the amount by which the original net tax capacity has
increased or decreased; and the City of Elk River is authorized and directed to
forthwith transmit this request to the County Auditor in such form and content as
the Auditor may specify, together with a list of all properties within District No. 17,
for which building permits have been issued during the 18 months immediately
preceding the adoption of this resolution.
The motion for the adoption of the foregoing resolution made by
Councilmember and was duly seconded by
Councilmember and upon a vote being taken thereon, the
following voted in favor thereof:
and the following voted against the same:
Dated: February 17, 1998
ATTEST:
Henry A. Duitsman, Mayor Sandra A. Thackeray, City Clerk
EXHIBIT A
RESOLUTION NO. 98 -
The reasons and facts supporting the findings for the adoption of the Tax
Increment Financing Plan for Tax Increment Financing District No. 17 ("District No.
17") as required pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as
follows:
Finding that the District No. 17 is an "economic development district" as defined
in Minnesota Statutes, Section 4¢9.1 ?4, Subdivision 19.
District No. 17 consists of one parcel of property. The District is in the public
interest because it will discourage manufacturing from moving their operations
to another state or municipaliW; it will result in increased employment in the
state, and it will result in preservation and enhancement of the tax base of the
state.
Finding that the proposed development, in the opinion of the Council, would not
reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased marhet value of the site that
could reasonably be expected to occur without the use of tax increment financing
would be less than the increase in the market value estimated to result from the
proposed development after subtracting the present value of the projected tax
increments for the maximum duration of the district permitted by the plan.
Due to the high cost of site development on the parcel and the cost of financing
the proposed improvements, this project is feasible only through assistance, in
part, from tax increment financing.
A comparative analysis of estimated market values both with and without
establishment of Tax Increment Financing District No. 17 and the use of tax
increment has been performed as described above. If all development which is
proposed to be assisted with tax increment were to occur in District No. 17, the
total increased market value would be up to $850,000. It is the Council's finding
that no development with a market value of greater than $509,692 would occur
without tax increment assistance in this district within 9 years. This finding is
based upon evidence from general past experience with the high cost of site
improvements in the area of District No. 17.
Finding that the Tax Increment Financing Plan for District No. 1 ? conforms to
the general plan for the development or redevelopment of the municipality as a
whole.
The site is appropriately zoned. The Tax Increment Financing Plan for District
No. 17 has been reviewed by the Planning Commission on December 23, 1997,
and been found to conform to the Comprehensive Plan and general development
plan of the City.
Finding that the Tax Increment Financing Plan for District No. 1 ~ will afford
maximum opportunity, consistent with the sound needs of the City as a whole, for
the development of Municipal Development District No. ! by private enterprise.
The industrial development to be assisted by District No. 17 will result in
increased employment in the City and the State of Minnesota, increased tax base
of the State and add a high quality development to the City.
MODIFICATIONS
To the
Development Program
For
Development District No. 1
and the
TAX INCREMENT FINANCING PLAN
for
Tax Increment Financing District No. 17
(An Economic Development District)
Economic Development Authority in and for the City of Elk River
Sherburne County
City of Elk River, Minnesota
Prepared: October 21, 1997
Revised: December 23, 1997
Adopted: February 17, 1998
Prepared by:
City of Elk River
13065 Orono Parkway
Elk River Minnesota 55330
(612) 441-7420
With final review by:
Doherty Rumble & Butler, PA
3500 Fifth Street Towers
150 South Fifth Street
Minneapolis, Minnesota 55402-4235
(612) 340-5584
SECTION I.
SECTION II.
Section A.
Section B.
Section C.
Section D.
Section E.
Section F.
Section G.
Section H.
Section I.
Section J.
Section K.
Section L.
Section M.
Section N.
Section O.
Section P.
Section Q.
Section R.
Section S.
Section T.
Section U.
Section V.
Section W.
Section X.
Section Y.
Section Z.
Section AA.
Section AB.
Section AC.
Section AD.
EXHIBIT A
EXHIBIT B
EXHIBIT C
TABLE OF CONTENTS
TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING DISTRICT NO. 17
MODIFIED DEVELOPMENT PROGRAM FOR DEVELOPMENT DISTRICT ........ I-1
TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING
DISTRICT NO. 17
Statutory Authority ............................................................................................... II-1
Statement of Objectives ....................................................................................... II-1
Development Program Overview ......................................................................... II-2
Description of Property in District No. 17 ........................................................... 1I-2
Classification of the Tax Increment Financing District ....................................... II-3
Property To Be Acquired ..................................................................................... II-3
Estimate of Costs - Use of Funds ......................................................................... I1-4
Estimated Amount of Loan/Bonded Indebtedness ............................................... II-5
Sources of Revenue .............................................................................................. II-5
Original Tax Capacity and Tax Rate .................................................................... I1-5
Amount of Captured Tax Capacity and Tax Rate ................................................ II-6
Duration of the District ........................................................................................ II-6
Estimated Impact on Other Taxing Jurisdictions ................................................. II-7
Modifications of the Tax Increment Financing District ....................................... II-7
Administrative Expenses ..................................................................................... II-8
Duration of Tax Increment Financing Districts ................................................... II-8
Limitation on Qualification of Property in Tax Increment District
Not Subject to Improvement ................................................................................ II-9
Limitation on the Use of Tax Increment .............................................................. II-9
Notification of Prior Planned Improvements ..................................................... II-10
Excess Tax Increments ....................................................................................... II-10
Requirement for Agreements with the Developer ............................................. II-10
Assessment Agreements .................................................................................... II- 10
Administration of District and Maintenance of the Tax Increment Account ..... II-11
Financial Reporting Requirements ..................................................................... II-11
Municipal Approval ........................................................................................... II- 13
County Road Costs ............................................................................................ II-14
Other Limitations on the Use of Tax Increment ................................................ II-14
Reduction in State Tax Increment Financing Aid .............................................. II-15
Economic Development and Job Creation ......................................................... II-16
Summary ............................................................................................................ II-16
Boundary Map of Tax Increment Financing District No. 17 ............................... A-1
Cashflow Analysis and Base Value Analysis ...................................................... B-1
Minnesota Business Assistance Form ........................................................................ C-1
SECTION I.
MODIFIED DEVELOPMENT PROGRAM
FOR DEVELOPMENT DISTRICT NO. 1
MODIFICATION TO SECTION I:
Current plans for this development project are to build a 25,000 square foot industrial facility (TIF
District No. 17). The project is proposed to include a maximum $200,000 of Tax Increment
Financing, as summarized in Section G of the TIF Plan for the District.
Development Program for Development District No. 1 ....................................................................................................................................................................................... Page I-I
SECTION II.
TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING DISTRICT NO. 17
A. STATUTORY AUTHORITY
Within the City of Elk River (the "City") there exist areas where public involvement is necessary to
cause development or redevelopment to occur. To this end, the City Council established the Elk
River Economic Development Authority (the "Authority").
The City faces various existing land use problems that require corrective action by the City or
Authority before development by private enterprise becomes financially feasible or desirable. The
Authority and City are authorized to establish a tax increment district pursuant to Minnesota
Statutes, Section 469.174 to 469.179, inclusive, as amended, to assist in financing public costs
related to this project. Tax increments are derived only from the increased amount of taxes which
are paid on a parcel of property after the construction of a new structure on the parcel. Tax
increment districts encompass the parcels from which tax increments are paid for a period of time.
Below is the Tax Increment Financing Plan (the "Plan") for Tax Increment Financing District No. 17
("District No. 17"). Other relevant information is contained in the Development Program for
Development District No. 1, originally adopted on April 1, 1985 and subsequently modified. A
modification of the Development Program is contemplated in the Tax Increment Plan.
Development District No. 1 includes the area proposed for District No. 17. The Authority or the
City reserves the right to approve all or a portion of the property proposed to be included in District
No. 17 on the date of the first public hearing, February 17, 1998.
B. STATEMENT OF OBIECTIVES
District No. 17 consists of 1 parcel of land and adjacent and internal rights-of-way.
The current plans for the new development on the site include a 25,000 square foot industrial
facility.
District No. 17 is expected to achieve many of the objectives set forth in the Development
Program in regard to land use. These objectives include:
Provide impetus for industrial development by constructing the public facilities
necessary to make such development possible;
o
Increase employment opportunities in the City by encouraging additional industrial
development.
o
Provide adequately serviced industrial areas of the City to accommodate desirable
users;
o
Preserve and enhance the tax base of the City;
Preserve and enhance the quality of life of the City; and,
Tax Increment Financing District No. 17 Page II-I
o
Provide maximum opportunity, consistent with the needs of the city for
development by private enterprise.
C. DEVELOPMENT PROGRAM OVERVIEW
Property to be Acquired - Selected property located within District No. 17 may be
acquired by the City or Authority and is further described in this Plan.
°
Relocation - Complete relocation services are available pursuant to Minnesota
Statutes, Chapter 117 and other relevant state and federal laws.
o
Upon approval of the developer's plan relating to the project and completion of the
necessary legal requirements, the City or the Authority may sell to the developer
selected properties it may acquire within District No. 17.
o
The City or the Authority may perform or provide for some or all necessary
relocation, removal of substandard structures, site preparation, grading, demolition,
construction of required utilities and public parking/streets work within District No.
17.
District No. 17 contains property zoned I-1 - Light Industrial. All development in
the area will conform to applicable state and local codes and ordinances.
D. LEGAL DESCRIPTION OF PROPERTY IN DISTRICT NO. 1 7
District No. 17 encompasses the parcel as identified below in addition to all adjacent (Service
Road) and interior right-of-ways:
Lots 1 and 2, Block 1, AVON ACRES 4th ADDITION, Sherburne County, Minnesota.
EXCEPTING from said Lot 1 all that part thereof lying northwesterly of the following described
line:
Commencing at the most Northerly corner of said Lot 1; thence South 50 degrees 01
minutes 32 seconds East, plat bearing, along the Northeasterly line of said Lot 1, for a
distance of 273.86 feet to the actual Point of Beginning of the line to be hereby
described; thence South 39 degrees 58 minutes 28 seconds West for a distance of
318.12 feet, more or less, to terminate said line at the intersection thereof with the
West line of said Lot 1.
Containing 6.41 acres, more or less. Subject to easements of record.
The City or the Authority reserves a right to approve all or a portion of the area of the parcels listed
as being designated for District No. 17.
See the map in Exhibit A for further information on the location of District No. 17.
Tax Increment Financing District No. 17 Page ]I-2
E. CLASSIFICATION OF THE TAX INCREMENT FINANCING DISTRICT
The City and the Authority, in determining the need to create a tax increment financing district in
accordance with Minnesota Statutes, Section 469.174 to 469.1 79, as amended, inclusive, find that
District No. 17 to be established is an economic development district pursuant to Minnesota
Statutes, Section 469.1 74, Subdivision 12 and 469.1 76 Subdivision 4c as defined below:
Sub& 12.
"Economic Development district" means a type of tax increment financing district
which consists of any project, or portions of a project, not meeting the requirements
found in the definition of redevelopment district, renewal and renovation district, soils
condition district, mined underground space development district, or housing district,
but which the authority finds to be in the public interest because:
(1) it will discourage commerce, industry, or manufacturing from moving their
operations to another state or municipality; or
(2) it will result in increased employment in the state; or
(3) it will result in preservation and enhancement of the tax base of the state.
Subd. 4c. Economic development districts. (a) Revenue derived from tax increment from an
economic development district may not be used to provide improvements, loans, subsidies,
grants, interest rate subsidies, or assistance in any form to developments consisting of
buildings and ancillary facilities, if more than 15 percent of the buildings and facilities
(determined on the basis of square footage) are used for a purpose other than:
(1) the manufacturing or production of tangible personal property, including processing
resulting in the change in condition of the property;
(2) warehousing, storage, and distribution of tangible personal property, excluding retail
sales;
(3) research and development related to the activities listed in clause (1) or (2);
(4) telemarketing if that activity is the exclusive use of the property;
(5) tourism facilities; or
(6) space necessary for and related to the activities listed in clause (1) to (5).
The parcel has been investigated by City and Authority staff and consultants and District No. 17
has been found to meet all requirements of an economic development district. Data on file
regarding the qualifications of the economic development tax increment financing district.
0
District No. 1 7 consists of 1 parcel.
District No. 17 does not meet the requirements of any other Tax Increment Financing
District.
District No. 1 7 will discourage commerce, industry, or manufacturing from moving their
operations to another state or municipality.
District No. 1 7 will result in increased employment in the state.
District No. 1 7 will result in preservation and enhancement of the tax base of the state.
The facility will qualify specifically under Subd. 4c. (1), (2), (3), and (6), as indicated in
Section E of this Plan.
F. PROPERTY TO BE ACQUIRED
The Authority may acquire all parcels within District No. 17.
Tax Increment Financing District No. 17 Page II-3
G. ESTIMATE OF PUBLIC COSTS- USE OF FUNDS
The estimated use of funds associated with District No. 17 are outlined in the following line item
budget:
USE OF FUNDS TOTAL
Qualified Costs:
Land Acquisition
Site Improvements
Public Improvements
Other Development Costs
Interest
Administration (up to 10%)
$ 0
$160,000
$ 0
$ 20,0O0
$ 0
$ 20,000
TOTAL: $ 200,000
The City or Authority reserve the right to modify actual line item dollar amounts at any time
throughout the duration of the District, as long as it does not change the Total as indicated above.
Capitalized interest and other interest payments on tax increment bonds and obligations are also
considered to be public costs in addition to the above referenced estimate of public costs. Interest
payments and capitalized interest will be determined at the time of issuance of the bonds and
obligations and are dependent on interest rates in effect at such time. In addition to above
mentioned costs, administration costs to cover City staff and overhead and various consulting fees
in an amount not to exceed 10% of total tax increment will be funded with tax increments from
District No. 17.
This provision does not obligate the City or Authority to incur debt. The City or Authority will issue
bonds only upon determination that such action is in the best interest of the City. The City or
Authority may also finance the activities to be undertaken pursuant to the Tax Increment Financing
Plan through loans from funds of the City or Authority or to reimburse the developer on a "pay-as-
you-go" basis for eligible activities paid for by the developer.
Any funds to be expended outside the boundaries of District No. 17, but within the boundaries of
Development District No. 1, will be less than 20 percent of total tax increment generated by
District No. 17, including administrative costs. Subject to that limitation, and the limitations as
described in Section R., the tax increment from District No. 1 7 may be used to pay for public costs
outlined in the Development Program for Development District No. 1 (subject to the limitations as
described in this Plan).
Tax Increment Financing District No. 17 Page II-4
H. ESTIMATED AMOUNT OF LOAN/BONDED INDEBTEDNESS
The City or Authority have the ability to issue a revenue bond, general obligation bond, or other
type of obligation in one or more series for a maximum amount of $500,000 to finance any or all of
the Total Estimated Public Costs authorized to be paid under Section G of this Plan.
I. SOURCES OF REVENUE
The anticipated source of revenue to be used to finance public costs associated with the public
development projects and objectives as stated in Development District No. 1 is tax increment
generated as a result of the taxation of the land and improvements in District No. 17. Tax
increment financing refers to a funding technique that utilizes increases in valuation and the
property taxes attributable to new development to finance, or assist in the financing of, public
development costs. Additional sources of revenue may include, but are not limited to, investment
income and land sales proceeds. This does not preclude the City, the Authority, or the developer
from using other funds, at its discretion, to pay such costs.
SOURCES OF FUNDS TOTAL
Tax Increment
Interest
Local Contribution
Other Revenue Sources
$ 180,000
20,000
TOTAL $ 200,000
J. ORIGINAL TAX CAPACITY AND TAX RATE
Pursuant to Minnesota Statutes Section 469.174, Subdivision 7 and Section 469.177, Subdivision 1,
the Original Net Tax Capacity (ONTC) for the District No. 17 is based on the value placed on the
property by the assessor in 1997 for taxes payable 1998.
Pursuant to Sections 469.177, subd. l(f), the ONTC will be increased each year by a factor which
represents the average percentage increase in the estimated market value of all property in District
No. 17 during the five year period before certification of District No. 17 (assessment years 1992
through 1997). The County Auditor will increase the ONTC 13.73% each year over the life of
District No. 17. The two parcels listed below will be combined prior to start of construction.
Average
1992 1997 Annual
EMV EMV Increase % Increase Increase
Parcel 1 - 38,100
Parcel 2 - 20,000
Total 58,100
54,000 15,900 41.0% (98,000-58,100)
44,000 24,000 120.0% 58,100
~ 68.67%/5 yrs.
98,000 39,900 : 13.73%
Tax Increment Financing District No. 17 Page II-5
The original local tax rate for the purpose of the projecting cashflow for District No. 1 7 will be the
tax rate for taxes payable in 1997 of 1.12767. The certified original local tax rate for District No.
17 will be the tax rate for taxes payable in 1998.
Each year, the Sherbume County Auditors Office will measure the amount of increase or decrease
in the total tax capacity of District No. 17 to calculate the tax increment payable to the City and the
Authority. In any year in which there is an increase in total tax capacity in the tax increment
financing district above the average annual percentage increase based upon the 5 years prior to
certification of the district, a tax increment will be payable. In any year in which the total tax
capacity in District No. 17 declines below the original net tax capacity, no additional valuation will
be captured and no tax increment will be payable.
The County Auditor shall certify in each year after the date the ONTC was certified, the amount the
ONTC has increased or decreased as a result of:
2.
3.
4.
5.
change in tax exempt status of property;
reduction or enlargement of the geographic boundaries of the district;
change due to stipulations, adjustments, negotiated or court-ordered abatements;
change in the use of the property and classification; or
change in state law governing class rates.
K. AMOUNT OF CAPTURED TAX CAPACITY AND TAX RATE
Pursuant to Minnesota Statutes, Section 469.174 Subdivision 4 and Minnesota Statutes, Section
469.177, Subdivision If and Subdivision 2, the estimated Captured Net Tax Capacity (CTC) of
District No. 17, upon completion of Phase I of the project, will annually approximate tax increment
revenues as shown in the table below. The City requests 100 percent of the available increase in
tax capacity for repayment of debt and current expenditures, beginning in the tax year payable
2000.
The original tax capacity and project tax capacity are estimated at current market values and class
rates to be the total amount when all development is in place and uses of the property have
changed.
Original Estimated Project Tax Capacity (upon completion of project)
less: Original Tax Capacity
Estimated Captured Tax Capacity
28,550
2,646
25,904
Estimated Annual Tax Increment (CTC x Tax Rate)
$29,211
L. DURATION OF THE DISTRICT
Pursuant to Minnesota Statutes, Section 469.175, Subdivision lb, the duration of District No. 17
must be indicated within the Plan. The duration of District No. 17 will be 9 years from payment of
the first tax increment expected in 2000. Thus it is estimated that District No. 17, including any
modifications of the Plan for subsequent phases or other changes, would terminate at the end of the
year 2008. The City and the Authority reserve the right to decertify District No. 17 prior to the
legally required date.
Tax Increment Financing District No. 17 Page II-6
M. ESTIMATED IMPACT ON OTHER TAXING IURISDICTIONS
The estimated impact on other taxing jurisdictions assumes construction would have occurred
without the creation of District No. 17. After careful consideration and analysis, the Authority has
determined that construction would not occur without the creation of District 17. If the
construction is a result of tax increment financing, the impact is $0 to other entities.
Notwithstanding the fact that the fiscal impact on the other taxing jurisdictions is $0 due to the fact
that the construction would not have occurred without the assistance of the City, the following
estimated impact of District No. 1 7 would be as follows if the "but for" test was not met:
ENTITY
IMPACT ON TAX BASE
ENTITY'S
TOTAL N ET
TAX CAPACITY
ESTIMATED
CAPTURED
TAX CAPACITY
% OF CAPTURED
TAX CAPACITY
TO ENTITY TOTAL
Sherburne County 63,007,347 25,904 .041%
City of Elk River 12,251,909 25,904 .211%
School District No. 728 25,234,529 25,904 .103 %
IMPACT ON TAX RATES
CURRENT PERCENT CAPTURED POTENTIAL
ENTITY TAX RATE OF TOTAL TAX CAPACITY TAXES
Sherbume County .24392 .22 25,904 6,318
City of Elk River .24683 .22 25,904 6,394
School District No. 728 .62359 .55 25,904 16,153
Other .01333 .01 25,904 345
TOTAL 1.12767 1.00 29~210
The estimates listed above display captured tax capacity when all construction is completed. The
tax rates and tax capacities are the payable 1997 figures for all jurisdictions. District No. 1 7 will be
certified under rates for tax year payable 1998 which were unavailable at the time of preparation of
this Plan.
N. MODIFICATIONS OF THE TAX INCREMENT FINANCING DISTRICT
In accordance with Minnesota Statutes, Section 469.175, Subdivision 4, any reduction or
enlargement of the geographic area of the project or tax increment financing district, increase in
amount of bonded indebtedness to be incurred, including a determination to capitalize interest on
debt if that determination was not a part of the original plan, or to increase or decrease the amount
of interest on the debt to be capitalized, increase in the portion of the captured tax capacity to be
retained by the City or Authority, increase in total estimated tax increment expenditures or
designation of additional property to be acquired by the City or Authority shall be approved upon
the notice and after the discussion, public hearing and findings required for approval of the original
Tax Increment Financing District No. 17 Page II-7
plan. The geographic area of a tax increment financing district may be reduced, but shall not be
enlarged after five years following the date of certification of the original tax capacity by the county
auditor or by approximately July 2003. If an economic development district is enlarged, the
reasons and supporting facts for the determination that the addition to the district meets the criteria
of Sections 469.174, subdivision 12, must be documented. The requirements of this paragraph do
not apply if (1) the only modification is elimination of parcel(s) from the project or district and (2)(A)
the current tax capacity of the parcel(s) eliminated from the district equals or exceeds the tax
capacity of those parcel(s) in the district's original tax capacity or (B) the authority agrees that,
notwithstanding Sections 469.177, subdivision 1, the original tax capacity will be reduced by no
more than the current tax capacity of the parcel(s) eliminated from District No. 17. The City or EDA
must notify the County Auditor of any modification that reduces or enlarges the geographic area of
District No. 17 or Development District No. 1.
Modifications to the District No. 17, in the form of a budget modification or an expansion of the
boundaries, will be recorded in this Plan.
O. LIMITATION ON ADMINISTRATIVE EXPENSES
In accordance with Minnesota Statutes, Section 469.174, Subdivision 14 and Minnesota Statutes,
Section 469.176, Subdivision 3, administrative expenses means all expenditures of an authority
other than amounts paid for the purchase of land or amounts paid to contractors or others providing
materials and services, including architectural and engineering services, directly connected with the
physical development of the real property in the district, relocation benefits paid to or services
provided for persons residing or businesses located in the district or amounts used to pay interest
on, fund a reserve for, or sell at a discount bonds issued pursuant to Section 469.178.
Administrative expenses include amounts paid for services provided by bond counsel, fiscal
consultants, and planning or economic development consultants. No tax increment shall be used
to pay any administrative expenses for a project which exceed ten percent of the total tax increment
expenditures authorized by the tax increment financing plan or the total tax increment expenditures
for the project, whichever is less.
Pursuant to Minnesota Statutes, Section 469.1 76, Subdivision 4h, tax increments may be used to
pay for the county's actual administrative expenses incurred in connection with District No. 17.
The county may require payment of those expenses by February 15 of the year following the year
the expenses were incurred.
Pursuant to Minnesota Statutes, Section 469.177, Subd. 11, the County Treasurer shall deduct an
amount equal to 0.1 percent of any increment distributed to the City or Authority and the County
Treasurer shall pay the amount deducted to the State Treasurer for deposit in the state general fund.
P. DURATION OF TAX INCREMENT FINANCING DISTRICTS
Pursuant to Minnesota Statutes, Section 469.176, Subdivision l(d), no tax increment shall be paid
to the City or Authority three years from the date of certification of the ONTC by the County
Auditor unless within the three-year period (1) bonds have been issued pursuant to Section
469.178, or in aid of a project pursuant to any other law, except revenue bonds issued pursuant to
Chapter 469.1 $2 to 469.165, prior to the effective date of the Act; or (2) the authority has acquired
property within the district; or (3) the authority has constructed or caused to be constructed public
improvements within the district. The City or Authority must therefore issue bonds, or acquire
Tax Increment Financing District No. 17 Page I1-8
property, or construct or cause public improvements to be constructed in District No. 17 by
approximately February, 2001.
Q. LIMITATION ON QUALIFICATION OF PROPERTY IN TAX INCREMENT DISTRICT NOT
SUBJECT TO IMPROVEMENT
Pursuant to Minnesota Statutes, Section 469.176, Subdivision 6,
If, after four years from the date of certification of the original tax capacity of the tax increment
financing district pursuant to Minnesota Statutes, Section 469.177, no demolition, rehabilitation
or renovation of property or other site preparation, including qualified improvement of a street
adjacent to a parcel but not installation of utility service including sewer or water systems, has
been commenced on a parcel located within a tax increment financing district by the authority
or by the owner of the parcel in accordance with the tax increment financing plan, no additional
tax increment may be taken from that parcel and the original tax capacity of that parcel shall be
excluded from the original tax capacity of the tax increment financing district. If the authority or
the owner of the parcel subsequently commences demolition, rehabilitation or renovation or
other site preparation on that parcel including improvement of a street adjacent to that parcel, in
accordance with the tax increment financing plan, the authority shall certify to the county
auditor in the annual disclosure report that the activity has commenced. The county auditor
shall certify the tax capacity thereof as most recently certified by the commissioner of revenue
and add it to the original tax capacity of the tax increment financing district. The county auditor
must enforce the provisions of this subdivision... For purposes of this subdivision, qualified
improvements are limited to (1) construction or opening of a new street, (2) relocation of a
street, and (3) substantial reconstruction or rebuilding of an existing street.
R. LIMITATION ON THE USE OF TAX INCREMENT
Pursuant to Minnesota Statutes, 469.1 763, Subd. 2, at least 80 percent of the revenues derived from
tax increments from an economic development district must be expended on activities in the
district. These costs include demolition of structures, grading, site preparation, clearing of the land
and installation of utilities, roads, sidewalks, and parking facilities for the site.
The revenues shall be used to finance or otherwise pay public redevelopment and economic
development costs allowed by law. These revenues shall not be used to circumvent any levy limit
law. No revenues derived from tax increment shall be used for the construction or renovation of a
municipally owned building used primarily and regularly for conducting the business of the
municipality; this provision shall not prohibit the use of revenues derived from tax increments for
the construction or renovation of a parking structure, a commons area used as a public park or a
facility used for social, recreational or conference purposes and not primarily for conducting the
business of the municipality.
Tax increments generated in Tax Increment Financing District No. 17 will be paid by Sherburne
County to the City of Elk River for the Tax Increment Fund of said District No. 17. The City or
Authority will pay to the developer annually an amount not to exceed an amount as specified in a
developer's agreement to reimburse the costs of land acquisition, public improvements, demolition
and relocation, site preparation, and administration. Remaining increment funds will be used for
City or Authority administration (up to 10 percent) and the costs of public improvement activities
outside District No. 1 7 (subject to the limitations as described in this Plan).
Tax Increment Financing District No. 17 Page II-9
S. NOTIFICATION OF PRIOR PLANNED IMPROVEMENTS
Pursuant to Minnesota Statutes, Section 469.177, Subdivision 4, the City and the Authority have
reviewed the area to be included in District No. 17 and found no properties for which building
permits have been issued during the 18 months immediately preceding approval of the Plan by the
City. If a building permit had been issued within the 18 month period preceding approval of the
plan by the City, the county auditors shall increase the original tax capacity of the district by the
valuation of the improvements for which the building permit was issued.
T. EXCESS TAX INCREMENTS
Pursuant to Minnesota Statutes, Section 469.176, Subdivision 2, in any year in which the tax
increment exceeds the amount necessary to pay the costs authorized by the tax increment plan,
including the amount necessary to cancel any tax levy as provided in Minnesota Statutes, Section
475.61, Subdivision 3, the City or Authority shall use the excess amount to do any of the following:
2.
3.
4.
prepay the outstanding bonds;
discharge the pledge of tax increment therefore;
pay into an escrow account dedicated to the payment of such bond; or
return the excess to the County Auditor for redistribution to the respective taxing
jurisdictions in proportion to their tax capacity rate as provided in Minnesota
Statutes, Sections 469.176, Subdivision 2.
The Authority may also modify this Plan to authorize additional costs within 5 years of date of
certification.
U. REQUIREMENT FOR AGREEMENTS WITH THE DEVELOPER
The City or Authority will review any Developer's proposal to determine its conformance with the
Development Program and with applicable municipal ordinances and codes. To facilitate this
effort, the following documents may be requested for review and approval: site plan, construction,
mechanical, and electrical system drawings, landscaping plan, grading and storm drainage plan,
signage system plan, and any other drawings or narrative deemed necessary by the City or
Authority to demonstrate the conformance of the development with City plans and ordinances. The
City or Authority may use the Agreement to address other issues related to the development.
The requirements to be imposed upon the Developer and the City's or Authority's exact
participation in the project will be negotiated as part of the Redevelopment Agreement between
the City or the Authority and the Developer.
V. ASSESSMENT AGREEMENTS
Pursuant to Minnesota Statutes, Section 469.1 77, Subdivision 8, the City or Authority may enter
into an agreement in recordable form with the owner of property within the tax increment financing
district which establishes a minimum market value of the land and improvements for the duration
of District No. 17. The assessment agreement shall be presented to the county assessor who shall
review the plans and specifications for the improvements constructed, review the market value
assigned to the land upon which the improvements have been or will be constructed and, so long
Tax Increment Financing District No. 17 Page I1-10
as the minimum market value contained in the assessment agreement appear, in the judgment of
the assessor, to be a reasonable estimate, the assessor may certify the minimum market value
agreement.
W. ADMINISTRATION OF DISTRICT AND MAINTENANCE OF THE TAX INCREMENT
ACCOUNT
Administration of District No. 1 7 will be handled by the Executive Director of the Authority. The
tax increment received as a result of increases in the tax capacity of District No. 17 will be
maintained in a special fund separate from all other municipal funds and expended only upon
sanctioned municipal activities identified in the tax increment financing plan.
X. FINANCIAL REPORTING REQUIREMENTS
Pursuant to Minnesota Statutes, Section 469.175, Subdivisions 5, 6, and 6(a); the City or Authority
must file an annual disclosure report for all tax increment financing districts with the State Auditor,
the county board, county auditor, and school board.
Pursuant to Section 469.175, Subd. 5, of the Tax Increment Financing Act, the City or Authority
must file an annual disclosure report for the Tax Increment Financing District. The report shall be
filed with the State Auditor, the county board, county auditor, and school board on or before July 1
of each year. The report to be filed by the City or Authority shall include the following information:
5.
6.
7.
8.
the amount and source of revenue in the tax increment account;
the amount and purpose of expenditures from the account;
the amount of any pledge of revenues, including principal and interest, on any
outstanding bond indebtedness;
the original net tax capacity of the Tax Increment Financing District;
the captured net tax capacity retained by the City;
the captured net tax capacity shared with other taxing districts;
the tax increment received;
any additional information necessary to demonstrate compliance with the tax
increment financing plan.
Section 469.175, Subd. 5, of the Tax Increment Financing Act also provides that an annual
statement showing the tax increment received and expended in that year, the original net tax
capacity, captured net tax capacity, amount of outstanding bonded indebtedness, the amount of the
district's increments paid to other governmental bodies, the amount paid for administrative costs,
the sum of increments paid, directly or indirectly, for activities and improvements located outside of
the district, and any additional information the City or Authority deems necessary shall be
published in a newspaper of general circulation in the City.
Pursuant to Minnesota Statutes, Section 469.1 75, Subd. 6, of the Tax Increment Financing Act, the
City or Authority must annually submit to the State Auditor, on or before July 1, a financial report
which shall'
provide for full disclosure of the sources and uses of the public funds in the district;
Tax Increment Financing District No. 17 Page II-I 1
permit comparison and reconciliation with the City's accounts and financial reports;
permit auditing of the funds expended on behalf of the tax increment district,
including a single district that is part of a multi district project or that is funded in
part or whole through the use of a development account funded with tax increments
from other districts or with other public money; and
be consistent with generally accepted accounting principles.
The financial report must also include the following:
o
o
the original net tax capacity of District No. 1 7;
the captured net tax capacity of the District No. 17, including the amount of any
captured net tax capacity shared with other taxing districts;
for the reporting period and for the duration of District No. 17, the amount
budgeted under the tax increment financing plan, and the actual amount expended
for, at least, the following categories:
a. acquisition of land and buildings through condemnation or purchase;
b. site improvements or preparation costs;
c. installation of public utilities, parking facilities, streets, roads,
sidewalks, or other similar public improvements;
d. administrative costs, including the allocated cost of the authority;
e. public park facilities, facilities for social, recreational, or conference
purposes, or other similar public improvements; and
the total cost of the property to the authority and the price paid by developers (for
properties sold to developers);
the amount of increments rebated or paid to developers or property owners for
privately financed improvements or other qualifying costs, other than those reported
under clause (3), that were issued on behalf of private entities for facilities located in
District No. 1 7.
Pursuant to Minnesota Statutes, Section 469.175, subdivision 6a, the City or Authority must also
annually report to the State Auditor before or on July 1 of each year the following amounts for the
entire City or EDA:
the total principal amount of nondefeased tax increment financing bonds that are
outstanding at the end of the previous calendar year; and
the total annual amount of principal and interest payments that are due for the
current calendar year on (i) general obligation tax increment financing bonds and (ii)
other tax increment financing bonds.
and for each tax increment financing district within the City:
the type of tax increment financing district;
the date on which the district is required to be decertified;
the amount of any payments and the value of in-kind benefits, such as physical
improvements and the use of building space, that are financed with revenues
derived from increments and are provided to another governmental unit (other than
the municipality) during the preceding calendar year;
Tax Increment Financing District No. 17 Page II-12
the tax increment revenues for taxes payable in the current calendar year;
whether the tax increment financing plan or other governing document permits
increment revenues to be expended outside of District No. 17;
any additional information that the State Auditor may require.
Copies of this report must also be provided to the county and school district boards.
Y. MUNICIPAL APPROVAL
Pursuant to Minnesota Statutes, Section 469.175, Subdivision 3, before or at the time of approval of
the tax increment financing plan for District No. 17, the municipality shall make the following
findings and shall set forth in writing the reasons and supporting facts for each determination.
Finding that the Tax Increment Financing District No. 17 is an economic development
district as defined in Minnesota Statutes, Section 469.174, Subd. 12.
District No. 17 consists of 1 parcel of property. The District is in the public interest because
it will result in increased employment in the State, and it will result in preservation and
enhancement of the tax base of the State.
Finding that the proposed development, in the opinion of the City Council and the
Authority, would not occur solely through private investment within the reasonably
foreseeable future and that the increased market value of the site that could reasonable be
expected to occur without the use of tax increment financing would be less than the
increase in the market value estimated to result from the proposed development after
subtracting the present value of the projected tax increments for the maximum duration of
District No. 17 permitted by the Tax Increment Financing Plan.
Due to the high cost of development on the parcel, and the cost of financing the proposed
improvements, this project is feasible only through assistance, in part, from tax increment
financing.
A comparative analysis of estimated market values both with and without establishment of
Tax Increment Financing District No. 17 and the use of tax increments has been performed
as described above. Such analysis is included in the Tax Increment Financing Plan and
shows that the estimated market value of the proposed development (less the indicated
subtractions) after discounting by the present value of the tax increment is significantly
greater that the increase in the market value estimated to result from other development that
could be expected to occur without the use of tax increment after the present value of the
projected tax increment for the maximum duration of District No. 17 permitted by the Tax
Increment Financing Plan (see cashflows in Appendix C).
Finding that the Tax Increment Financing Plan for District No. 17 conforms to the general
plan for the development or redevelopment of the municipality as a whole.
The site is appropriately zoned. The Tax Increment Financing Plan has been reviewed by
the Planning Commission on December 23, 1997, and been found to conform to the
Tax Increment Financing District No. 17 Page II-13
general development plan of the City.
Finding that the Tax Increment Financing Plan for Tax Increment Financing District No. 17
will afford maximum opportunity, consistent with the sound needs of the City as a whole,
for the development of Development District No. 1 by private enterprise.
The establishment of Tax Increment Financing District No. 17 will result in increased
employment for the City and State of Minnesota, increased tax base of the State, and add a
high quality development to the City.
Additional findings may be set forth in the Authorizing Resolution of the City.
Z. COUNTY ROAD COSTS
Pursuant to Minnesota Statutes, Section 469.175, Subdivision la, the county board may require the
authority to pay for all or part of the cost of county road improvements if the proposed
development to be assisted by tax increment will, in the judgment of the county, substantially
increase the use of county roads requiring construction of road improvements or other road costs
and if the road improvements are not scheduled within the next five years under a capital
improvement plan or other county plan.
The improvements outlined in the Plan serve as notice to the county that the development of the
commercial facility will be assisted with tax increment. In the opinion of the City, the Authority,
and consultants, the proposed development will have little or no impact upon county roads. If the
county elects to use increments to improve county roads, it must notify the City within thirty days of
receipt of this plan.
AA. OTHER LIMITATIONS ON THE USE OF TAX INCREMENT
General Limitations. All revenue derived from tax increment shall be used in accordance
with the tax increment financing plan. The revenues shall be used to finance or otherwise
pay public capital and administration costs pursuant to Minnesota Statutes, Section 469.124
through 469.134. These revenues shall not be used to circumvent existing levy limit law.
No revenues derived from tax increment shall be used for the construction, renovation,
operation or maintenance of a building to be used primarily and regularly for conducting
the business of a municipality, county, school district, or any other local unit of government
or the state or federal government; this provision shall not prohibit the use of revenues
derived from tax increments for the construction or renovation of a parking structure, a
commons area used as a public park or a facility used for social, recreational or conference
purposes and not primarily for conducting the business of the municipality.
Pooling Limitations. At least 80 percent of tax increments from District No. 17 must be
expended on activities in District No. 17 or to pay bonds, to the extent that the proceeds of
the bonds were used to finance activities within said district or to pay, or secure payment of,
debt service on credit enhanced bonds. Not more than 20 percent of said tax increments
may be expended, through a development fund or otherwise, on activities outside of
District No. 17 except to pay, or secure payment of, debt service on credit enhanced bonds.
Tax Increment Financing District No. 17 Page II-14
For purposes of applying this restriction, all administrative expenses must be treated as if
they were solely for activities outside of District No. 1 7.
Five Year Limitation on Commitment of Tax Increments. Tax Increments derived from
District No. 1 7 shall be deemed to have satisfied the 80 percent test set forth in paragraph
(2) above only if the five year rule set forth in Minnesota Statues, Sections 469.1763,
subdivision 3, has been satisfied; and beginning with the sixth year following certification of
District No. 17, 80 percent of said tax increments that remain after expenditures permitted
under said five year rule must be used only to pay previously commitment expenditures or
credit enhanced bonds as more fully set forth in Minnesota Statues, Sections 469.1763,
subdivision 4.
AB. REDUCTION IN STATE TAX INCREMENT FINANCING AID
Pursuant to Minnesota Statues, Section 273.1399, for tax increment financing districts for which
certification was requested after April 30, 1990, a municipality incurs a reduction in state tax
increment financing aid (RISTIFA) applied to the municipality's Local Government Aids (LGA) first
and, Homestead and Agricultural Credit Aids (HACA) second, in an amount equal to a formula
based upon the equalized qualifying captured tax capacity (QCTC) of the tax increment financing
district.
Pursuant to Minnesota Statutes, Section 273.1399, Subdivision 6, for tax increment financing
districts certified after June 30, 1994, the City may choose an option to the LGA-HACA penalty. A
tax increment financing district is exempt if the City elects at the time of approving the tax
increment financing plan to make a qualifying local contribution. To qualify for the exemption in
each year, the City must make a qualifying local contribution to the project of a certain percentage.
The local contribution for an economic development district is 10 percent. The maximum local
contribution for all districts in the City is limited to two percent of the City's net tax capacity.
The amount of the local contribution must be made out of unrestricted money of the City or
Authority, such as the general fund, a property tax levy, or a federal or a state grand-in-aid which
may be spent for general government purposes. The local contribution may not be made, directly
or indirectly, with tax increments or developer payments. The local contribution must be used to
pay project costs and cannot be used for general government purposes.
The Authority elects to make the annual local contribution to the project to exempt itself from the
LGA-HACA penalty. The City or Authority will pay for costs of the project described in this Plan, in
an amount equal to 10 percent of annual tax increment for District No. 17, subject to the limitations
described above, in any year in which such amount does not exceed 2 percent of the City's net tax
capacity. Such contribution may be in the form of either lump sum or annual payments (in addition
to tax increment payments) toward costs identified in this plan or other costs related to that
development or redevelopment. The contribution may also be made in the form of public
improvements financed by the City or Authority or other unit of government with unrestricted
funds.
Tax Increment Financing District No. 17 Page II-15
AC. ECONOMIC DEVELOPMENT AND lOB CREATION
To the extent applicable, the City agrees to comply with Minnesota Statutes,, Section 116J.991,
which states that a business receiving state or local government assistance for economic
development or job growth purposes, including tax increment financing, must create a net increase
in jobs and meet wage level goals in Minnesota within two years of receiving assistance (See
Appendix C).
AD. SUMMARY
The City of Elk River is establishing Tax Increment Financing District No. 17 to preserve and
enhance the tax base, to develop underutilized areas, and increase employment of the City. The
Tax Increment Financing Plan for Tax Increment Financing District No. 17 was prepared by the
City of Elk River, 13065 Orono Parkway, Elk River, Minnesota 55330, telephone (612) 441-7420.
Tax Increment Financing District No. 17 Page II-16
EXHIBIT A
Boundary Map of Tax Increment Financing District No. 1 7
Tax Increment Financing District No. 17 l~age A-l
TIF DISTRICT NO. 17 BOUNDARY MAP
U.S. HIGHWAYS
SER VICE
I0 & 169
ROAD
IJ:GAL DESCRIPTION:
Lot] I and 2. Block I, AVON ACRES 4th ~.DDITION, 8herburno, County,
Marmosets. EXCEPTING from said Lot I ail that p~rt thereof lyJnf
northwesterly of tho followinI described line:
Commenelnf at the most Northerly corner of said Lot 1; thanes 8outh
50 defrees 01 minutes 5S eoeonds gut, plat bestial, sisal the
HoFtheaeterly line of said Lot 1, for a dbff~nce of 273.80 feet to
the actual Point Of iJellnninf of the line to be hereby described:
thence South 30 delrse, 58 minutes 28 ,eeoncb West for a distance of
318.UZ feet, more or less. to terminate said line at the
Intersection thereof with the West line of said Lot 1.
Containinl 6.41 acres, more or leos. Subject to eesemenb of record.
rue: ?250.3
\
\
\
\
\
~ .'
\,
%. \
% \
%, \
HSO'OI'3~'OW 463.14
PROPOSED
BUILDING
15.100 S.F. ·
ELEV. m 100:0
....... e--8- - BENCH MARl( I Top u,.,.~m~;
\
FUTURE
FUTURE
I \
I ~
I I
I I
·
·
%
·
·
EXHIBIT B
Cashflow Analysis and Base Value Analysis
Tax Increment Financing District No. 17 Page B-1
TIF DISTRICT NO. '17
CASH FLOW ASSUMPTIONS
Pay-As-You-Go Interest Rate
Tax Extension Rate
nf at on Rate
0.00% J
1.12767 Pay 97
0.00%
VALUE/RATE/CAPACITY
Effective
Rate
Value Information
Base
Value
98,000
2.70%
PROJECT INFORMATION
Tax J
Capacity
2,646 Pay 97
Type of Total Taxes Per Total Tax Market Date
Use Sq. Ft. Sq. Ft. Taxes Capacity Value Payable
Commercial 25,000 $1.29 32,195 28,550 850,000 2000
Totals 25,000 32,195 28,550 850,000
BUT FOR ANALYSIS
98,000
850,000
Current Market Value - Estimate
New Market Value - Estimate
Difference
Present Value at 0.00%
Difference
Value Likely to Occur Without TIF
Difference
752,000
242,308
509,692
0
509,692
LOCAL MATCH ANALYSIS
City contribution to project
Other contribution to project
Tota oca match to project
19,361
19,361
IMPACT ANALYSIS
TAX CAPACITIES
SHERBURNE 63,007,347 25,904 0.041%
ELK RIVER 12,251,909 25,904 0.211%
DISTRICT 728 25,234,529 25,904 0.103%
TAX RATES
SHERBURNE 0.243920 25,904 6,319
ELK RIVER 0.246830 25,904 6,394
DISTRICT 728 0.623590 25,904 16,153
)THER 0.013330 25,904 345
TOTALS 1.127670 29,211
Cashfiow analysis prepared by CITY OF ELK RIVER 1/5/98
TIF DISTRICT NO. 17 CASH FLOW ANALYSIS
PERIOD BEGINNING
Mth. Yr.
O7-O1 1997
~.,.~ 12-o1 1997
0.0 07-01 1998
0.0 12-01 1998
0.0 07-01 1999
O.0 12-01 1999
0.0 07-01 2000
0.5 12-01 2000
1.0 07-01 2001
1.5 12-01 2001
2.0 07-01 2002
2.5 12-01 2002
3.0 07-01 2003
3.5 12-01 2003
4.0 07-01 2004
4.5 12-01 2004
5.0 07-01 2005
5.5 12-01 2005
6.0 07-01 2006
6.5 12-01 2006
7.0 07-01 2007
7.5 12-01 2007
8.0 07-01 2008
8.5 12-01 2008
9.0 07-01 2009
9.5 12-01 2009
10.0 07-01 2010
10.5 12-01 2010
11.0 07-01 2011
11.5 12-01 2011
12.0 07-01 2012
12.5 12-01 2012
13.0 07-01 2013
13.5 12-01 2013
14.0 07-01 2014
14.5 12-01 2014
15.0 07-01 2015
12-01 2015
07-01 2016
16.5 12-01 2016
17.0 07-01 2017
17.5 12-01 2017
18.0 07-01 2018
18.5 12-01 2018
19.0 07-01 2019
19.5 12-01 2019
20.0 07-01 2020
20.5 12-01 2020
21.0 07-01 2021
21.5 12-01 2021
22.0 07-01 2022
22.5 12-01 2022
23.0 07-01 2023
23.5 12-01 2023
24.0 07-01 2024
24.5 12-01 2024
Base Project Captured Inflation Semi-Annual Admin. Local Match Total Increment
Tax Tax Tax Rate Gross Tax at at Minus Admin
Capacity Capacity Capacity 0.00% Increment 10.00% 10.00% Plus Local Match
2,646 O 0 O O O 0 0
2,646 o O O o O 0 o
2,646 0 0 0 0 0 0 0
2,646 0 0 0 0 0 0 0
2,646 0 0 0 0 0 0 0
2,646 0 0 0 0 0 0 O
2,646 28,550 25,904 0 14,606 (1,461) 1,461 14,606
2,646 28,550 25,904 0 14,606 (1,461) 1,461 14,606
3,009 28,550 25,541 0 14,401 (1,440) 1,440 14,401
3,009 28,550 25,541 0 14,401 (1,440) 1,440 14,401
3,422 28,550 25,128 0 14,168 (1,417) 1,417 14,168
3,422 28,550 25,128 0 14,168 (1,417) 1,417 14,168
3,892 28,550 24,658 0 13,903 (1,390) 1,390 13,903
3,892 28,550 24,658 0 13,903 (1,390) 1,390 13,903
4,427 28,550 24,123 0 13,602 (1,360) 1,360 13,602
4,427 28,550 24,123 0 13,602 (1,360) 1,360 13,602
5,035 28,550 23,515 0 13,259 (1,326) 1,326 13,259
5,035 28,550 23,515 0 13,259 (1,326) 1,326 13,259
5,726 28,550 22,824 0 12,869 (1,287) 1,287 12,869
5,726 28,550 22,824 0 12,869 (1,287) 1,287 12,869
6,512 28,550 22,038 0 12,426 (1,243) 1,243 12,426
6,512 28,550 22,038 0 12,426 ( 1,243) 1,243 12,426
7,406 28,550 21,144 0 11,922 (1,192) 1,192 11,922
7,406 28,550 21,144 0 11,922 (1,192) 1,192 11,922
PERIOD ENDING
Yrs. Mth. Yr.
0.O 12-O1 1997
O.0 O7-O1 1998
0.0 12-01 1998
0.0 07-01 1999
0.0 12-01 1999
0.0 07-01 2000
0.5 12-01 2000
1.0 07-01 2001
1.5 12-01 2001
2.0 07-01 2002
2.5 12-01 2002
3.0 07-01 2003
3.5 12-01 2003
4.0 07-01 2004
4.5 12-01 2004
5.0 07-01 2005
5.5 12-01 2005
6.0 07-01 2006
6.5 12-01 2006
7.0 07-01 2007
7.5 12-01 2007
8.0 07-01 2008
8.5 12-01 2008
9.0 07-01 2009
12-01 2009
07-01 2010
12-01 2010
07-01 2011
12-01 2011
07-01 2012
12-01 2012
07-01 2013
12-01 2013
07-01 2014
12-01 2014
07-01 2015
12-01 2015
07-01 2016
12-01 2016
07-01 2017
12-01 2017
07-01 2018
12-01 2018
07-01 2019
12-01 2019
07-01 2020
12-01 2020
07-01 2021
12-01 2021
07-01 2022
12-01 2022
07-01 2023
12-01 2023
07-01 2024
12-01 2024
07-01 2025
Totals 242,308 (24,231) 24,231 242,308
Total Net Present Value 242,308 (24,231) 24,231 242,308
Cashflow analysis prepared by CiTY OF ELK RIVER 1/5/98
TIF DISTRICT NO. 17 PAYMENT ANALYSIS
PERIOD BEGINNING Scheduled Payment Payment Local Match Local Match Local Match PERIOD ENDING
Payment To EDA To Developer at Paid up-front Owed
Mth. Yr. Date 10% Admin Dev. Costs 10.00% Yrs. Mth. Yr.
07-01 1997 0 0 0 0 0.0 12-01 1997
0.0 12-01 1997 O 0 0 0 0.0 07-01 1998
0.0 07-01 1998 0 0 0 0 0.0 12-01 1998
0.0 12-01 1998 0 0 0 0 0.0 07-01 1999
0.0 07-01 1999 0 0 0 0 0.0 12-01 1999
0.0 12-01 1999 0 0 0 0 0.0 07-01 2000
0.0 07-01 2000 07-1 1,461 13,145 1,461 0 1,461 0.5 12-01 2000
0.5 12-01 2000 12-1 1,461 13,145 1,461 0 1,461 1.0 07-01 2001
1.0 07-01 2001 07-1 1,440 12,961 1,440 0 1,440 1.5 12-01 2001
1.5 12-01 2001 12-1 1,440 12,961 1,440 0 1,440 2.0 07-01 2002
2.0 07-01 2002 07-1 1,417 12,751 1,417 0 1,417 2.5 12-01 2002
2.5 12-01 2002 12-1 1,417 12,751 1,417 0 1,417 3.0 07-01 2003
3.0 07-01 2003 07-1 1,390 12,513 1,390 0 1,390 3.5 12-01 2003
3.5 12-01 2003 12-1 1,390 12,513 1,390 0 1,390 4.0 07-01 2004
4.0 07-01 2004 07-1 1,360 12,241 1,360 0 1,360 4.5 12-01 2004
4.5 12-01 2004 12-1 1,360 12,241 1,360 0 1,360 5.0 07-01 2005
5.0 07-01 2005 07-1 1,326 11,933 1,326 0 1,326 5.5 12-01 2005
5.5 12-01 2005 12-1 1,326 11,933 1,326 0 1,326 6.0 07-01 2006
6.0 07-01 2006 07-1 1,287 11,582 1,287 0 1,287 6.5 12-01 2006
6.5 12-01 2006 12-1 0 0 0 0 0 7.0 07-01 2007
7.0 07-01 2007 07-1 0 0 0 0 0 7.5 12-01 2007
7.5 12-01 2007 12-1 0 0 0 0 0 8.0 07-01 2008
8.0 07-01 2008 07-1 0 0 0 0 0 8.5 12-01 2008
8.5 12-01 2008 12-1 0 0 0 0 0 9.0 07-01 2009
9.0 07-01 2009 12-01 2009
9.5 12-01 2009 07-01 2010
10.0 07-01 2010 12-01 2010
10.5 12-01 2010 07-01 2011
11.0 07-01 2011 12-01 2011
11.5 12-01 2011 07-01 2012
12.0 07-01 2012 12-01 2012
12.5 12-01 2012 07-01 2013
13.0 07-01 2013 12-01 2013
13.5 12-01 2013 07-01 2014
14.0 07-01 2014 12-01 2014
14.5 12-01 2014 07-01 2015
~q 07-01 2015 12-01 2015
12-01 2015 07-01 2016
~ 07-01 2016 12-01 2016
16.5 12-01 2016 07-01 2017
17.0 07-01 2017 12-01 2017
17.5 12-01 2017 07-01 2018
18.0 07-01 2018 12-01 2018
18.5 12-01 2018 07-01 2019
19.0 07-01 2019 12-01 2019
19.5 12-01 2019 07-01 2020
20,0 07-01 2020 12-01 2020
20.5 12-01 2020 07-01 2021
21.0 07-01 2021 12-01 2021
21.5 12-01 2021 07-01 2022
22.0 07-01 2022 12-01 2022
22.5 12-01 2022 07-01 2023
23.0 07-01 2023 12-01 2023
23.5 12-01 2023 07-01 2024
24.0 07-01 2024 12-01 2024
24,5 12-01 2024 07-01 2025
Totals 18,074 162,669 18,074
Total Net Present Value 18,074 162,669 18,074
Cashflow analysis prepared by CITY OF ELK RIVER 1/5/98
TIF DISTRICT NO. 17 AMORTIZATION SCHEDULE
PERIOD BEGINNING
Yrs. Mth. Yr.
07-01 1997
12-01 1997
0.0 07-01 1998
0.0 12-01 1998
0.0 07-01 1999
0.0 12-01 1999
0.0 07-01 2000
0.5 12-01 2000
1.0 07-01 2001
1.5 12-01 2001
2.0 07-01 2002
2.5 12-01 2002
3.0 07-01 2003
3.5 12-01 2003
4.0 07-01 2004
4.5 12-01 2004
5.0 07-01 2005
5.5 12-01 2005
6.0 07-01 2006
6.5 12-01 2006
7.0 07-01 2007
7.5 12-01 2007
8.0 07-01 2008
8.5 12-01 2008
9.0 07-01 2009
9.5 12-01 2009
10.0 07-01 2010
10.5 12-01 2010
11.0 07-01 2011
11.5 12-01 2011
12.0 07-01 2012
12~5 12-01 2012
13.0 07-01 2013
13.5 12-01 2013
14.0 07-01 2014
14.5 12-01 2014
15.0 07-01 2015
4~ ~ 12-01 2015
07-01 2016
12-01 2016
17.~ 07-01 2017
17.5 12-01 2017
18.0 07-01 2018
18.5 12-01 2018
19.0 07-01 2019
19.5 12-01 2019
20.0 07-01 2020
20.5 12-01 2020
21.0 07-01 2021
21.5 12-01 2021
22.0 07-01 2022
22.5 12-01 2022
23.0 07-01 2023
23.5 12-01 2023
24.0 07-01 2024
24.5 12-01 2024
Principal
Interest
Semi-Annual Accrued Note
P & I Net Interest Balance
Revenue Outstanding
0 0 0 0 0
0 0 0 0 0
0 0 0 0 160,000
0 0 0 0 0 160,000
0 0 0 0 0 160,000
0 0 0 0 0 160,000
13,145 0 13,145 13,145 0 146,855
13,145 0 13,145 13,145 0 133,710
12,961 0 12,961 12,961 0 120,749
12,961 0 12,961 12,961 0 107,789
12,751 0 12,751 12,751 0 95,038
12,751 0 12,751 12,751 0 82,287
12,513 0 12,513 12,513 0 69,774
12,513 0 12,513 12,513 0 57,262
12,241 0 12,241 12,241 0 45,020
12,241 0 12,241 12,241 0 32,779
11,933 0 11,933 11,933 0 20,846
11,933 0 11,933 11,933 0 8,913
8,913 0 8,913 11,582 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
0 0 0 0 0 0
Costs Qualified
Incurred Costs
PERIOD ENDING
Yrs. Mth. Yr.
0
0
160,000 Site imprvmts
0.0 12-01
0.0 07-01
0.0 12-01
0.0 07-01
0.0 12-01
0.0 07-01
0.5 12-01
1.0 07-01
1.5 12-01
2.0 07-01
2.5 12-01
3.0 07-01
3.5 12-01
4.0 07-01
4.5 12-01
5.0 07-01
5.5 12-01
6.0 07-01
6.5 12-01
7.0 07-01
7.5 12-01
8.0 07-01
8.5 12-01
9.0 07-01
1997
1998
1998
1999
1999
2000
2000
2001
2001
2002
2002
2003
2003
2004
2004
2005
2005
2006
2006
2007
2007
2008
2008
2009
12-01 2009
07-01 2010
12-01 2010
07-01 2011
12-01 2011
07-01 2012
12-01 2012
07-01 2013
12-01 2013
07-01 2014
12-01 2014
07-01 2015
12-01 2015
07-01 2016
12-01 2016
07-01 2017
12-01 2017
07-01 2018
12-01 2018
07-01 2019
12-01 2019
07-01 2020
12-01 2020
07-01 2021
12-01 2021
07-01 2022
12-01 2022
07-01 2023
12-01 2023
07-01 2024
12-01 2024
07-01 2025
Totals 160,000 0 160,000 162,669 0 0
Cashflow analysis prepared by CITY OF ELK RIVER 1/5/98
EXHIBIT C
Minnesota Business Assistance Form
(Minnesota Department Of Trade And Economic Development)
Tax Increment Financing District No. 17 Page C-1
Minnesota Bus ness Assistance Form*
?.o~o,~,.~ Minnesota Department of Trade and Economic Development
1. Funding government agency name
Please type or print in dark ink.
2. Agency street address
3. City
7. Contact name
9. Name of TIF district (ff applicable)
4. Zip Code
5. Phone number (area code) I 6. Fax number (area code)
8, Type of government agency
~ City ~County ~Regional ~Stnte
~ Oth~' (Please indic~_t.e)
10. Name of business receiving assistance
12. Job creation goals for business receiving assistance
14. Actual jobs created since business received assistance
16. Last tlat_e actual wage and job creation levels documented
11. Date business received assistance
13. Hourly wage level goals for business receiving assistance
15. Actual average hourly wage paid to employees hired since
business received assistance
* Please complete one form for each business project your agency assisted with $25,000 or more in public funds.
Please send completed form annually by March 1 to:
Minnesota Business Assistance Form
Minnesota Department of Trade and Economic Development
500 Metro Square
121 East 7th Place
St. Paul, Minnesota 55101
or fax report to:
(612) 296-1290
For information, call:
(612) 297-1291 or 1~800-657-3858