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• <br /> 410 EHLERS <br /> & ASSOCIATES INC <br /> To: Aaron Backman <br /> From: Shelly Eldridge <br /> UNI Subject: Building N Issues <br /> Date: November 19, 2003 <br /> Aaron: <br /> Per your request I have reviewed the correspondence of November 2, 2003 regarding the <br /> TIF Revenue Note for the Building N Project. Following are my observations: <br /> 1.) Class Rate Compression: <br /> a. There have been two rounds of significant class rate compression. In <br /> 1997, the legislature gradually reduced the class rates applied to <br /> commercial and industrial properties over a period of years. In 2001 they <br /> made a more radical reduction all at once. The 1997 class rate <br /> compression should not be an issue for this project, as the assumption for <br /> 1999 Developer Agreement should have considered the class rates that <br /> were in effect as of 1999. If fact, the class rates in effect for 1999 were <br /> lower than those in 1998 and were subsequently lowered again in 2000. In <br /> other words, class rate compression had been happening for years and <br /> were in place at the time the developer agreement was executed and <br /> should not be not a new issue. <br /> b. The other developers in Mounds View that have pay as you go <br /> arrangements have also been impacted by the class rate compression. All <br /> of the increment payments that are based on total increment generated <br /> from the project have seen reduced payments on the TIF Notes. <br /> 2.) Developer Agreement Assumptions: <br /> a. The risk is the Developers. The developer agreement defines the <br /> increment revenue to be limited to the revenues generated by the <br /> Development Property. The developer agreement does not allow for the <br /> payment of any other revenues except those received from Ramsey <br /> County associated with the specific property. The TIF Note also is <br /> 3060 Centre Pointe Drive (651)-697-8504 Fax:(651)697-8555 <br /> Roseville,MN 55113-1105 Shelly@ehlers-inc.com <br /> http://www.ehlers-inc.com <br />