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LEADERS IN PU3I_.IL FINANCE OTo: Sue Iverson —Finance Director From: Stacie Kvilvang —Ehlers and Associates WDate: December 14, 2009 Subject: TIF 1-3 Modification Overview In 1993, the City created TIF District 1-3, a housing district, to assist in the development of Cottage Villas which is a 60-unit senior apartment complex that is affordable to persons that meet the low -to -moderate income guidelines. A housing district by State Statute can have a maximum duration of 26 years (25 years after the receipt of the first increment). At the time of creation of this District, the City Council limited the term to 15 years, since that was the term needed to satisfy the financial obligation to the development. Since creating this district, the City has had a request for assistance for a new affordable housing development, as well as the City has identified some sites that could be redeveloped for affordable housing. Based upon discussions with the City Council, it was determined that rather than creating a new housing TIF district to assist future affordable housing developments, the City could utilize the TIF generated from the Cottage Villas project by extending the term of the district from 15 years to the statutory maximum of 26 years. Issues to Consider l . Can the City extend the term of the original district? 2. What is the new term of the District? 3. Can the City use the TIF generated from Cottage Villas on other projects even though they are not located within the TIF District boundaries? 4. How much TIF will be available for future affordable housing developments by extending the District? 5. How will TIF assistance be provided to future affordable housing developments? Analysis of Issues 1. Can the City extend the term of the original district? Yes. In order to extend the term to the statutory maximum, the City needs to hold a public hearing since it will be modifying the development program to outline potential, future projects and the budget to reflect increased increment to be collected due to the extension. LEADERS IN PUBLIC FINANCE ................................................................................................... 3o6o Centre Pointe Drive Roseville, MN 55113-1105 �a ........................................................................................................................................................................................................................................: Phone:651-697-85o6 Fax:651-697-8555 skvilvang@ehlers-inc.com