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B R I G G S AND M O R G A N <br /> 3. Short Tax Increment District. The tax increment financing district established for <br /> the United Properties project is an Economic Development District with a <br /> maximum term of nine years of tax increment. Traditionally, look -back <br /> provisions are more appropriate when a developer has the potential of receiving <br /> increment over a longer period of time, such as a housing district and a <br /> redevelopment district, both that have maximum terms of 26 years of tax <br /> increment. <br /> 4. Rate of Return is Not Excessive. The rate of return that the Developer is <br /> expected to receive on Phase I of the project is less than its customary rate of <br /> return of 14 It appears that factoring in tax increments derived from Phase 2 <br /> and Phase 3 (if they are constructed) will still not give the Developer a rate of <br /> return in excess of what is customary in the market place. <br /> 5. Expensive to Negotiate, Draft and Implement. The incorporation of a look -back <br /> provision in a Development Agreement is very complex and costly to negotiate, <br /> draft (lots of lawyer, fiscal consultant and accountant time) and difficult for City <br /> staff to implement. It is even more so in this instance where part of the project <br /> consists of for sale cooperative units and part of the project consists of developer <br /> owned assisted living units. It becomes very time consuming and a battle of <br /> numbers and accounting analysis when the City attempts to effectuate the look <br /> back. Since it is remote with this project that the look -back would result in a <br /> reduction of the amount of public subsidy for the reasons outlined above it was <br /> advised by our office and Springsted not to include it. <br /> 2950792v1 <br />