7A, Tax Increment Financing for District #3

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Sue Iverson TIF District 1-3 Modification December 14, 2009 Page 2 2. What is the new term of the District? The District received its first increment in 1994. Therefore, by extending the term to the maximum duration of 26 years, it is anticipated that the District will expire after December 31, 2019. 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? Yes. In order to utilize TIF, cities are required to create a Development District(s) which outline, among other things, the area in which tax increments may be spent and where increment may be created. Once cities establish a development district, they can then create individual TIF districts that are located within the boundaries of the development district. In the case of housing TIF districts, you can utilize funds generated from the TIF district anywhere within the development district, without regards to pooling limitations. The boundaries of the City's development district are shown on page 14 of the TIF Plan and TIF generated from TIF 1-3 can be utilized anywhere within those boundaries to develop affordable housing. 4. How much TIF will be available for future affordable housing developments by extending the District? The increment available to use on projects, after the additional ten years of increment, is estimated to be $6801000. The present value, or amount of principal available,at a 6% interest rate, is around $ 5 5 0, 000 . 5. How will TIF assistance be provided to future affordable housing developments? Any future TIF request will be brought before the City Council for review and consideration. If the City determines it would like to provide assistance to a development, the terms and conditions will be outlined in a Development Agreement that will be approved the City Council. Please contact me at 651-697-8506 with any questions.