Agenda Packets - 2024/05/13 - Laserfiche WebLink

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NOTE 13 — TAX ABATEMENT AGREEMENTS (CONTINUED) • The tax increment financing plan conforms to the general plan for the development or redevelopment of the municipality as a whole. The tax increment financing plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the development or redevelopment of the project by private enterprise. The developer (Boulevard Apartments, LP) agreed to a number of restrictive covenants related to income limitations for residents of the rental building and is required to submit a report on compliance annually by January 31. The developer is in compliance. The City rebated $90,765 to retire the revenue note in 2023. The outstanding balance on the note at year-end was approximately $434,000. The developer (Medtronic, Inc.) agreed to the material requirements to construct a minimum of 1.2 million square feet of office and laboratory space and employ a minimum of 1,500 employees at an average of $34 per hour within two years of completion of the corporate campus and cause the continuous operation of the facility for five years after issuance of a certificate of occupancy. The developer has complied with all the requirements. The City rebated $2,498,348 to retire the revenue note in 2023. The outstanding balance on the note at year-end was approximately $16,214,000. The amount outstanding on these abatement notes are not included in long-term debt because the nature of the note in that repayment is required only if sufficient tax increments are received. The City's position is that these are obligations to assign future and uncertain revenue sources and, as such, is not actual debt in substance. NOTE 14 — COMMITMENTS AND CONTINGENCIES A. Federal and State Revenues Amounts received or receivable from federal and state agencies are subject to agency audit and adjustment. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of claims which may be disallowed by the grantor agencies cannot be determined at this time, although the City expects such amounts, if any, to be immaterial. B. Legal Claims The City has the usual and customary type of miscellaneous legal claims pending at year-end. Although the outcome of these lawsuits is not presently determinable, the City's management believes that the City will not incur any material monetary loss resulting from these claims. No loss has been recorded on the City's financial statements relating to these claims. C. Tax Increment Districts The City's tax increment districts are subject to review by the Minnesota Office of the State Auditor. Any disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they are not aware of any instances of noncompliance which would have a material effect on the financial statements. IrM!