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MEMORANDUM TO: Charlie Yunker – City Manager and HRA Executive Director FROM: Stacie Kvilvang - Ehlers DATE: March 23, 2021 SUBJECT: Public Hearing on TIF Lowry Grove TIF District Overview: The City is considering establishing the Lowry Grove Tax Increment Financing District (the “District) to facilitate the redevelopment of the former Lowry Grove Mobile Home Park and Bremer Bank site. The District consists of 2 parcels of land as noted in the table below and adjacent and internal rights-of-way and is approximately 17 acres in size. The City has had several projects come forward over the past several years to redevelop the area with varying forms of rental housing. All projects have requested tax increment financing in order to undertake the projects. Over the last year, the City has given preliminary approval for assistance to two (2) projects in the proposed District, of which only one is moving forward at this time. Based upon the historical interest in redeveloping this area, it was determined to place both parcels into one larger district in order to be flexible to accommodate any future TIF requests the City and HRA may deem to be warranted. The duration of this redevelopment TIF district will be 25 years from the date of receipt of the first increment, which is anticipated in 2023. Thus, it is estimated that the District, would terminate at the earlier of satisfaction of payment on any pay-as-you-go TIF Notes within the District or on December 31, in 2048. We anticipate that the District will be decertified earlier than 2048 since currently the only obligation proposed for the District should be repaid in 9 years. TIF District Criteria: The City hired LHB Architects to complete an inventory for the parcels and concluded that parcels consisting of 70 percent of the area in the District are occupied by buildings, streets, utilities, or other improvements. LHB also conducted an interior and exterior inspection of all the parcels/properties and concluded that more than 50 percent of the buildings in the District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance (meaning the buildings could not be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site). The report can be found in Appendix D of the TIF Plan. 3