5.3 Resolutions regarding TIF 2-2 and Business Subsidy

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(a) Tax Increment Financing District No. 2 -2 is an economic development district as defined in Minnesota Statutes, Section 469.174, Subd. 12. The TIF District qualifies as an economic development district in that the proposed development described in this TIF Plan meets all of the criteria listed in Sections 12 and 17 of the TIF Plan. (b) The proposed development, in the opinion of the City, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future, and the increased market value of the site that could reasonably be expected to occur without the use of tax increment would be less than the increase in 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 TIF District permitted by the TIF Plan. The above finding is based on a request to the City submitted by the Developer stating the subsidy is needed from the City and without the use of tax increment financing the Project could not proceed. The City also finds that due to the amount of time the site(s) have sat in their current condition, the City finds no reason for additional development to occur without TIF assistance. Therefore, the City reasonably believes that the expected increase in market value at this site without TIF assistance would be minimal. A comparative analysis of estimated market values both with and without establishment of the TIF District and the use of tax increments has been performed. This property has had limited economic activity over the past five years, so we are projecting a small inflationary rate of 1 %. Such analysis indicates that: 1. the increase in estimated market value of the proposed development is $5,000,000; and 2. the present value of expected tax increments collected over the maximum duration of the TIF District is $636,471; and 3. the expected increased estimated market value of the site without the use of tax increment is $1,292; and 4. even if some development other than the proposed development were to occur, the Authority finds that no alternative would occur that would produce a market value increase greater than $4,363,529 (them amount in number 1 less the amount in number 2) without tax increment assistance. (c) The Tax Increment Financing Plan for Tax Increment Financing District No. 2 -2 conforms to the general plan for development or redevelopment of the City of Pequot Lakes as a whole. The reasons and facts supporting this finding are that through the implementation of the TIF Plan, the City will provide an impetus for needed commercial and industrial property within the City, thereby encouraging potential further development by other private developers within the Project Area. (d) The Tax Increment Financing Plan will afford maximum opportunity, consistent with the sound needs of the City of Pequot Lakes as a whole, for the development or redevelopment of Tax Increment Financing District No. 2 -2 by private enterprise. The reasons and facts supporting this finding are that the development activities are necessary so that development and redevelopment by private enterprise can occur within the Development District.