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Ron Moorse Special TIF Legislation for TCAAP October 15, 2008 Page 2 - b. More than 50% of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance (determined by interior and exterior inspections and calculations of code issues and replacement costs) 2. Why is there a need to pursue special legislation? The current TIF statutes do not work well for large, multi-phased developments due to the long time frame it generally takes to develop these sites and the multi-year real estate market cycles that they are subject to. Many cities that have undertaken larger, long-term redevelopment projects such as this have often gone to the legislature to request exceptions to the current statute to assist them in making sure that the redevelopment can be implemented and is financially feasible. 3. What are the proposed changes to the TIF Statute and why are they needed? The proposed changes are as follows: a. The City will not be required to have all 160 structures inspected by a third party to determine if the structures are substandard (potential savings of nearly $50,000 to not have the report completed). The legislation would designate the 585-acrea are as a redevelopment district, based upon the fact that due to the age of the structures and the condition, they would qualify as substandard under the inspection process. b. The five-year rule is extended to ten years. Under current law a City only has the ability to reimburse itself or a developer(s) for eligible project costs that are incurred in the first five years of the district. Although we anticipate that most of the qualified expenditures will be made in this timeframe, it provides the City flexibility if there is market issues that come up that impede the redevelopment from happening as anticipated. It should be noted that many cities have requested and been granted this extension over the past several years. C. The City may delay first receipt of increment for up to six years (rather than four years under general law), and the City may designate the year of first receipt at any time during that period by timely notice to the county auditor (rather than being required to state the designated year in the TIF Plan). Again, this request is to provide the City flexibility with the District to determine when it is best to receive the 1st increment and thus, start the clock ticking on the district. If increment is generated in the years prior to the year the City designated to collect it, all tax revenue will he distributed back to the various taxing jurisdictions. It is possible that tax revenue generated by the new development in early years may be more