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101 D. Payment of Public Redevelopment Costs. 1. In General. All 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 all or 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 principal amount of the Bonds is estimated to be $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 $6,250,000 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 in one or more series, in,the aggregate principal amount of$6,250,000, will mature over a period of approximately eighteen (18) years from the date of receipt by the City of the first Tax Increment from the Tax Increment 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. E. Deten-nination and Use of Tax Increment. 1. District Eli ig_bility as a Redevelopment District. Minnesota Statutes, Section 469.174; subdivision 10 defines a"redevelopment district" as a tax increment financing district consisting of a project or portion of a project in which there is reasonably distributed throughout the district parcels consisting of 70% of the area in the district which are occupied by buildings, streets, utilities or other improvements and more than 50% of the buildings (not including outbuildings) are structurally substandard to a degree requiring substantial renovation or clearance. • -6-