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05/08/00 MON 14:55 FAX 18123402844 DORSEY WHITNEY 18 — MEMORANDUM TO:. Mike Morrison City Manager City of St. Anthony FROM: Jerry Gilligan DATE: May 8, 2000 RE: Hillcrest Development/Apache Plaza TIF Proposal The St. Anthony HRA has received a proposal from Hillcrest Development that it provide tax increment assistance in connection with its proposed acquisition and rehabilitation of Apache Plaza shopping center. Presently the shopping center is contained within an existing TIF district which includes the CUB Foods Store and it is being proposed that the shopping center and certain adjacent parcels be removed from the existing TIF district and a new TIF district be established by the HRA. 1. Removal of Parcels from Existing Apache Plaza TIF District and Establishment of New TIF Distjet. Under Minnesota Statutes, Section 469.1763, at least 75% of the increment from the existing Apache Plaza TIF district must be expended on activities in the district or to pay bonds issued to finance improvements in the district. This section provides that expenditures made 5 years after the district was originally certified are considered to be expenditures outside the district for purposes of the 75% test, subject to certain exceptions that do not apply to the Hillcrest Development proposal. The existing Apache Plaza TIF-district was certified by the County more than 5 years ago. Consequently, new expenditures for improvements to Apache Plaza may only be made from tax increment from the existing district to the extent that they do not cause the75%requirement to be violated. Administrative expenses do not count as "in-district"expenditures for purposes of the 75% test. Therefore, in order to provide significant tax increment assistance for the rehabilitation of Apache Plaza shopping center anew TIF district needs to be established. To establish a new TIF district it will be necessary to remove the parcels to be included in the new TIF district for the existing TIF district. -Minnesota Statutes, Section 469.175, subdivision 4, permits the HRA to modify a TIF plan to reduce the geographic area of a tax increment financing district. Such reduction must be approved upon the notice and after.the discussion, public hearing and findings required for approval of the original plan. Therefore, a public hearing will need to be held by the City Council to remove the parcels from the existing TIF district. This hearing can be held in conjunction with the hearing on establishing the new TIF district. .r A•� n •.�► r. •r r r • T \T Ttr • f h