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• AGENDA ITEM 6C • • STAFF ORIGINATOR: Mary Alice Divine DATE: June 27, 2005 TOPIC: Consideration of Resolution No. 05 -87 Calling for a Public Hearing Regarding Tax Abatement in Connection with YMCA Project VOTE REQUIRED: Simple majority BACKGROUND: In 1999 the Lino Lakes City Council endorsed city participation in the construction of a YMCA in Lino Lakes. This agreement included participation by the city of $1.5 million toward construction of the facility. Springsted, Inc., the city's financial consultants, and Kennedy & Graven, the city's bond attorney, have considered different options to meet this commitment, and have concluded the preferred option is through tax abatement. Legacy at Woods Edge, the city's new downtown development now beginning construction, has a portion of the project within a Tax Increment Financing District and a portion of the project outside that District (see map). Springsted and Kennedy & Graven are recommending that $1.5 million of abatement bonds be issued to meet the commitment to the YMCA. City taxes collected on new development within Woods Edge that is outside the TIF District would be used as the source of revenue to repay the bonds. Under the terms of Minnesota Statutes 226J.993 to 116J.995, ( "Business Subsidy Act ", the provision of tax abatement constitutes a business subsidy, which also requires a public hearing. This hearing will also consider the provision of a business subsidy through the use of tax abatement. OPTIONS: 1. Adopt Resolution No. 05 -87 Calling for a Public Hearing to be held on July 25, 2005 at 6:30 p.m. to consider the use of providing a business subsidy through tax abatement in connection with the YMCA project. 2. Do not adopt the resolution. 3. Return to staff for further consideration.