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Department Approval.- I iii i Manager Approved: Date: 8/11/2003 Item o: Agenda Section: Reports and Recommendations Item Description: Discussion on Use of Proceeds from the Arona Site Background At the August 4, 2003 City Council meetings Staff presented an overview of the Arona site. The overview included the following: 1 ) Review of the City's overall Tax Increment Financing (TIF) structure 2) Historical review of TIF District # 12 which includes the Arona site 3) overview of the eligible uses of tax increment generated from TIF #12. 4) Request from the HRA to utilize future increment from TIF # 1 5) Identification of potential uses of both future tax increment and land sale p roceeds. For the benefit of facilitating the Council's discussion, Staff` prepared a memo detailin g the items noted above. A copy of the memo is included as Attachment A. At the conclusion of Staff "s presentation, the Council held a brief discussion regarding Item 95 - the otential use of both future p tax increment and the proceeds of the City -owned Arona site. The Council directed Staff to bring forth additional information that would help frame the discussion. The remainin g portion of this memo deals with this subject. Although the use of future tax increment and land � t sale proceeds are somewhat related it's perhaps - s P ps best to consider them independently 1n the onset. Potential Use of Future Tax Increment When considering the use of futuue tax increment, it is suggested that the Council consider two factors; I ) the Original purpose of the district, and ) the restrictions on the use of " the monies The District was created In 1990 with the purpose of facilitating the development of the Arona site_ In other words, "but far" the creation of this district, development of the Arona. site w p cold not otherwise occur. In short, the increment from the district was to be used to offset the development costs. The Council should consider whether the original ose remains valid. pip ltd..