CC RES 03-085 A RESOLUTION RELATING TO THE REDEVELOPMENT OF PROPERTY IN REDEVELOPMENT PROJECT AREA NO. 3 AND AUTHORIZING THE PREPARATION, EXECUTION AND DELIVERY OF A CONTRACT FOR PRIVATE REDEVELOPMENT THEREOF

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• Mike Morrison -Northwest Quadrant Redevelopment September 17,2003 Page 3 entity. The Redeveloper will subdivide the redevelopment area and sell various portions of the property to other entities (in which Pratt Ordway, its principals or affiliates may be participants,with the exception of the rental housing portion). 2. Tax Increment. a. Creation of a Redevelopment TIF District. The City and HRA are required to create a Redevelopment TIF District by September 30, 2003, to assist in offsetting the high costs associated with redevelopment. It is understood that the City and HRA will be holding public hearings on the creation of the District prior to this date, but that the City will not request certification of the District until a Development Agreement is executed. b. Amount of Increment: Based upon the latest Sources and Uses from the Development Team, it is anticipated that the Phase I development will generate approximately $13.3 million in present value tax increment. Of this increment, it is anticipated that the Commercial and For Sale Housing Development Elements will require approximately $7 to $8.5 million to complete the redevelopment and the Rental Housing Developer will require approximately$2.7 million. • The Sources and Uses Statements and the amount of TIF for Phase II development are in the process of being compiled. c. Fiscal Disparities. Fiscal Disparities will be paid inside the district. d. Administration Expense Allocation. Currently all TIF calculations show 5% of available Tax Increment being available for administration. To the extent that the development will require more than 95% of the TIF for actual redevelopment costs or coverage of bonds,the City may elect to subordinate its 5% administration until the entire development comes on line (it is anticipated that this will not be required at this time). In the alternative, if there is excess increment, the City may increase its administration amount to the statutory limit of 10%. e. TIF Notes. It is anticipated that the Development Team will finance their development costs up front and that they will request the City to "take them out' after the development is completed through the issuance of Tax Exempt TIF bonds. This is a tool that is used in many of the metropolitan communities to assist developers with development and is a low risk proposition for the City, since the developments will be constructed and paying taxes when the City is issuing these bonds. 3. Public Improvements. a. Roadway and Sanitary Sewer Improvements. 39`h Avenue will be reconstructed from Silver Lake Road to Stinson Boulevard and upgrades will be made to the sanitary sewer lines as well. It is anticipated that it will cost approximately $2.205 million to complete • these improvements and the cost will be assessed to and paid for by the development and other benefiting properties within the TIF District as follows: