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• 3. The interfund loan (and any grant monies) will be disbursed from the escrow <br />when these conditions are met: <br />• <br />• City has issued the first building permit in the townhome <br />development <br />• EDA and Developer have entered into Assessment Agreements <br />setting minimum market value sufficient to create enough increment <br />to pay the interfund loan (and TIF Bonds, if they have been issued at <br />the time). <br />If these conditions are not met within two years after funding the escrow, the monies <br />are released back to the EDA. <br />4. The EDA will approve an interfund loan resolution that specifies a payment <br />schedule, with interest set at the maximum rate permitted by statute (currently, 4 %; the rate <br />changes annually). <br />C. TIF Note. <br />1. The TIF Note will be issued at closing on acquisition of the TIF Parcel. The <br />initial principal amount will be $1 million, with interest at 6 %. <br />2. The 111- Note will be paid solely from 90% of the tax increment generated <br />by the property in the "1T1+' District. This note is always subordinate to the TIF Bonds <br />(described in part IV below), and is subordinate to the interfund loan as well until <br />Assessment Agreements have been signed that produce enough increment to pay the TIF <br />Bonds, the interfund loan, and the TIF Note. From then on, the interfund loan and the <br />Note are on "parity" (which means increment is applied based on the relative outstanding <br />amounts of those obligations). <br />3. If the total special assessments on the Development Property are less than <br />$5,382,565, the Note will be reduced on a dollar for dollar basis. <br />D. Met Council Grant. The City will disburse grant funds for site work on the TIF <br />Parcel, subject to all the terms and conditions of the grant agreement between the City and <br />the Met Council. <br />E. The Developer must pay the City and EDA's out of pocket costs in connection with <br />this project. <br />F. The financial assistance is exempt from statutory business subsidy law requirements, <br />because the Developers investment in land and site improvements will exceed 70% of the <br />current market value of the TIF Parcel. <br />SJB- 250856v7 <br />CL205 -23 <br />-81- <br />