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Planning Commission Regular Meeting Minutes
<br /> • November 15, 1994
<br /> Page 10
<br /> 1 $2,450,000. The net proceeds will be for the following: $250,000 is being set aside for the
<br /> 2 development of the three holding ponds being proposed by the developer, $700,000 is being
<br /> 3 proposed for the assistance of the demolition and land right down for Knox Lumber, $1,200,000
<br /> 4 is being proposed for the demolition and land right down for CUB Foods, and an additional $2-
<br /> 5 300,000 is being set aside for C. G. Rein to use for demolition and other expenses. The
<br /> 6 remaining $600,000 of this tax increment is being used for City costs such as capitalized interest.
<br /> 7 The City will need to make bond payments but there will be no money coming in and there will
<br /> 8 be issuance costs as the City will need to hire someone to help with the financing of this issue.
<br /> 9 He reported that as stated earlier by the Mayor, Tax Increment Financing that the City has set up
<br /> 10 for their other districts, have gone no longer than 10 years. However, because of the impact in
<br /> 11 terms of taxes and jobs, etc., of this project,the City has directed the staff,that they would be
<br /> 12 willing to go 15 years. This Tax Increment Fund was set up in 1993 to avoid changes in
<br /> 13 legislature which would have cost the City $60-200,000. This cost would have been spread out
<br /> 14 over everyone's taxes. Because of interest rates going up and the delay in the project,the City
<br /> 15 will now be borrowing money for 17 years. The valuation of Apache is approximately
<br /> 16 $6,000,000. The valuation the City will be using for tax increment purposes is $7,900,000. The
<br /> 17 money the City will be using for these project costs and the bond issuances will be a new value
<br /> 18 which has to be firmed up by the developers and the Ramsey County Assessors Office. It is
<br /> estimated at$14,000,000.. The difference between these two amounts, $7,000,000 will go into
<br /> the City's tax increment district and it is anticipated this will be $404,000 per year in additional
<br /> 21 tax revenue. Currently, based on figures obtained from the assessors office,the mall is paying
<br /> 22 $365,000. This will double what is coming in for taxes. However, the money is tax payer's
<br /> 23 money and is not a loan. It is money that Knox, CUB, and the rest of the mall will be paying, as
<br /> 24 they would normally be paying; however, it will all go to the City instead of the school, county
<br /> 25 and Metropolitan Council,until the bonds are paid off or the City decertifies their tax increment
<br /> 26 district.
<br /> 27 City Manager Morrison confirmed that Genaw was correct in calculating that the Village would
<br /> 28 be in debt $350,000 to $450,000 per year for the next 17 years with no improvement in the tax
<br /> 29 base. City Manager Morrison also confirmed that the project at 3111 Silver Lake Road was
<br /> 30 indeed a good project and was increasing the tax base, as it is not in a tax increment project.
<br /> 31 Commissioner Faust commented that if we do not back the tax increment we still stay at the
<br /> 32 $7,000,000 evaluation and never go any higher. The money that is being used to pay the City for
<br /> 33 the bonds is paid by the property owners in Apache Plaza.
<br /> 34 Commissioner Franzese commented that if there are no improvements made at Apache, it will
<br /> 35 not stay at the $7,000,000 level but will continue to decrease. It has decreased by 65% in the
<br /> 36 past five years.
<br /> Chair Gondorchin added that there will be further development coming into the area because of
<br /> 38 the addition of CUB Foods and Knox and this will also increase the tax revenues.
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