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Special EDC Minutes <br /> June 1, 2020 <br /> Page 3 of 6 <br /> ----------------------------- <br /> contribution and as a revenue stream over the next potential nine years to help <br /> with that infrastructure. <br /> He explained the TIF projection spreadsheet in the packet to the EDC <br /> Commission. He said looking at the building value multiplying that with a local tax <br /> rate of 97%, not capturing the state's portion in this calculation, you can see that <br /> roughly generates about$5,000 per year with a 1% inflationary calculation <br /> included. He said the state does allow for some admin retention and they charge <br /> a small fee therefore he included the total net revenues in the chart. <br /> Mr. Murray stated from a strategy standpoint he thinks the EDC should think <br /> about the use of TIF and it is a nine potentially of a nine year TIF district. He said <br /> the City would end up putting the entire Business Park in this first TIF district but <br /> it may take 20 years to develop. He stated as it develops you may see a TIF <br /> district in the first and second phases develop in those first nine years and then <br /> towards the back half if there are additional lots that are vacant in 10 years after <br /> the first TIF district the City may consider creating another TIF district for those <br /> later phases. He asked the EDC to look at TIF as an opportunity to help <br /> supplement those increments of the infrastructure. <br /> Commissioner Rieck asked if here any disadvantages to having a TIF district or <br /> starting it now. Mr. Murray stated that it is really not a disadvantage and the City <br /> will not lose on the land value from a taxing standpoint. He explained what you <br /> are doing as a community is foregoing the potential taxes on that building to help <br /> redirect it to help with the payments on the infrastructure. He said it is not a <br /> revenue loss from day one if you establish this because you still have the base <br /> and you are just potentially redirecting the City, County, and School Districts <br /> portion of tax to help with those infrastructure costs. He stated this is a very <br /> common practice in Minnesota to help with Industrial Park or Business Park <br /> expansions. <br /> Mr. Murray stated that the School District is always a concern and their current <br /> rate is 12%. He informed the EDC that there was a law enacted in 2013 that <br /> protected schools and general operation levies from increments. He stated that <br /> the finro prominent providers is going to be the City and County. He confirmed <br /> that what he is doing is essentially earmarking the revenue for a purpose. <br /> Discussion ensued about if the money is better in the general fund or earmarked <br /> for the development of the Heart of the Good Life. <br /> Commissioner Lelwica asked why the City has not considered this funding for the <br /> Heart of the Good Life before. Mr. Murray stated that this is the first private <br /> developer in that area and the City would want to time the TIF with the <br /> development otherwise you do not have the tax base needed. He stated that his <br /> understanding is Xcel is going to potentially look at building next spring therefore <br /> we will probably set the TIF district up the winter in the first part of 2021. He said <br /> that it has to be in play before construction happens. <br />