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Larch 17, 1987 TO: Jim .Andre FROM: Craig Waldron SUBJECT: C. G. REIN TAX INC ?IMENTDISTRICT Based on the fact that C. G. Rein's proposed "but for"* relating to its tax increment project was called into the question at the last Council meeting, and Mr. Cavanaugh, representing the Company, stated that the development would go ahead without tax increment, Briggs and Morgan has informed me that it would be appropriate to drop the proposed tax increment district for C. G. Rein. The last few districts that have been approved by the City were basically developed to enhance the City's bond pool if any of the proposed developments ran into difficulty, thus precluding the need to levy a tax. Two "but fors" have been used to justify the recent districts. One relates to the actual development itself, which states that the development on the site would not take place but for tax increment assistance. The second "but for" was based on the fact that the City has a substantial amount of outstanding bond payments required, thus the proposed development was enhancing the City's existing bond pool. Briggs and Morgan has stated that as a result of the fact that the first "but for" was publicly negated at the Council meeting, it is not prudent to proceed with the C. G. Rein district. It should be pointed out that the strategy the staff was using with respect to the last district was to build "insurance" to protect the City from having to levy a tax to pay the bonds in the event of an increment shortfall. Once the other projects were built out as expected, these new districts could be decertified. * The City has to show "but for" tax increment, the development would not proceed.