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2® D. Payment of Public Redevelopment Costs. 1. In General. A portion of Public Redevelopment Costs will be paid from Tax Increment either directly or indirectly by payment of debt service on Tax Increment Bonds issued to finance such costs or reimbursement for items of Public Redevelopment Costs paid directly to the HRA, City or the owner of the property in the Redevelopment Project Area. 2. Issuance of Bonds. It is presently expected that a portion of the Public Redevelopment Costs will be financed by the issuance of the Tax Increment Bonds. The Tax Increment Bonds will be issued by the HRA or the City under authority of Minnesota Statutes, Chapter 475, and Sections 469.174 to 469.179. The Bonds are expected to be issued on a "pay as you go" basis, and payments on the Bonds will reimburse the owner of the Project for public redevelopment costs paid by such owner. The Bonds are estimated to be issued in an original principal amount of$4,750,000. It is expected that accrued and unpaid interest will be added to the principal amount of the Bonds and will result in an increase in the principal amount of the Bonds up to a principal amount of$6,250,000. The actual principal amount of the Bonds, however, may be less than or exceed this amount, and the right to issue the Bonds in an amount greater than set forth herein to finance such Public Redevelopment Costs is reserved. 3. Security For Bonds. The Bonds are expected to be issued as revenue bonds of the HRA or the City payable only from Tax Increment from the District.. Such revenue bonds are expected • to be issued to the owner of property in the Redevelopment Project Area to reimburse it for Public Redevelopment Costs paid by such owner. 4. Bond Terms. The terms of the Tax Increment Bonds are expected to be as set forth below; however, the right is reserved to adjust any and all terms of the Tax Increment Bonds to secure the best interest rate obtainable and to insure that the entire principal of and interest on the Tax Increment Bonds will be paid when due from the sources specified in paragraph 3. The Tax Increment Bonds will be issued on a"pay as you go" basis in one or more series, in the aggregate principal amount as specified in subsection 2 above, will mature over a period of approximately eighteen (18) years from the date of receipt by the HRA of the first Tax Increment from the District, will be subject to redemption prior to maturity, will bear.a fixed rate or rates of interest from date of issue to maturity, with interest payable semiannually commencing approximately six months after the issuance thereof, and will be sold at public or private sale. Accrued interest not paid on an interest payment date will be added to the principal amount of the Bonds. E. Determination and Use of Tax Increment. 1. District Eligibility as a Redevelopment District. Minnesota Statutes, Section 469.174, subdivision 10 defines a "redevelopment district" as a tax increment financing district consisting of a • -6-