7A, Tax Increment Financing for District #3

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Project Estimated Tax Capacity upon Completion (PTC) 389033 Original Estimated Net Tax Capacity (ONTO) 19352 Estimated Captured Tax Capacity (CTC) 36,681 Original Local Tax Rate 97.654% Pay 2009 Estimated Annual Tax Increment (CTC x Local Tax Rate) 359820 Percent Retained by the EDA 100% Section 2.13. Tax Capacity. The current total tax capacity rate is 130.864. (AS MODIFIED DECEMBER 14, 2009) The actual original local tax rate for the TIF District is 1.30864, which is the rate for taxes payable in 1993. The estimated rate for taxes payable in 2009 is lower, as shown in the chart in Section 2.12 above, so the lower rate is used for purposes of tax increment projections in the Modification. Section 2.14. Tax Increment. Tax increment has been calculated at approximately $63,930 assuming a static tax capacity rate and a valuation increase of zero percent (0%) compounded annually. Section 2.15. Type of Tax Increment Financing District. Tax Increment Financing District No. 3 is, pursuant to Minnesota Statutes, Section 469.174, Subdivision 12, a Housing District. The District consists of a project intended for occupancy, in part, by persons or families of low and moderate income as defined in the federal housing statutes. Minnesota Statutes, Section 469.1761 designates income requirements for such housing projects. (AS MODIFIED ON DECEMBER 14, 2009) Tax Increment Financing District No. 3 is, pursuant to Minnesota Statutes, Section 469.174, Subdivision 11, a Housing District. Such designation means that any housing project must meet the requirements of Section 469.1761 of the TIF Act. Those requirements are summarized as follows: 1. No more than 20 percent of the square footage of buildings that receive assistance from TIF District No. 3 may consist of commercial, retail, or other nonresidential uses. 2. For owner -occupied housing: 95 percent of the housing units must be initially purchased and occupied by individuals whose family income is less than or equal to the income requirements for qualified mortgage bond projects under section 143(f) of the Internal Revenue Code. Generally, the income for one or two person households may not exceed 100% of areawide or statewide median income (whichever is greater); and the income for three -or -more person households may not exceed 115% of areawide or statewide median income (whichever is greater). 3. For rental housing, the property must satisfy the requirements for residential rental project as defined in Section 143(d) of the Internal Revenue Code. This means that at either: at least 20% of the units are occupied by persons with income no greater than 50% of areawide median; or at least 40% of the units are occupied by persons with income no greater than 60% of areawide median. Housing projects that meet one of these income limitations may be located anywhere within Development District No. 1, whether or not such developments are actually established as a housing district. City of Arden Hills Modification of Tax Increment Financing District No. 3