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FREERS & ASSOCIATES INC To: Mike Mornson —Executive Director OC From: G Stacie Kvilvang —Ehlers and Associates (,V Date: March 6, 2006 Subject: Modification to Redevelopment Project No. 3, Chandler Place TIF District and TIF District 3-5 . The City and HRA have been working on a Master Financial Plan for future development and redevelopment activities within the City. Tax increment from the two above referenced districts have been identified . as potential funding sources to implement some of the City's and HRA's development/redevelopment objectives. In order to utilize tax increment from these two districts for various projects throughout the City, the HRA is required to approve and the City Council is required to hold a public hearing on the modification to the City's Project Area boundaries and modification to the existing TIF budgets for each district. The Project Area is the area of the City in which tax increment dollars can be expended, whether the area is located within a TIF district or not. Over the years the City has had five different Project Areas that were comprised of different parcels/boundaries within the City (Kenzie Terrace, Chandler, Highway Eight, Project Area No. 2 and Project Area No. 3). In an effort to simplify the defined boundaries of the Project Area, this modification will combine all former Project Areas into one, which will be called Project Area No. 3. The new boundaries will be expanded to include the corporate boundaries of the City, meaning that the City can expend tax increment dollars for development/redevelopment purposes anywhere in the City for a qualified project. It should be noted that no changes to either TIF District boundaries are being made with this modification (TIF Districts are not being enlarged). Again, the project does not need to be located within a TIF ' district, but must meet the qualified cost requirements of the type/age of district that is expending the funds. In addition, the TIF budgets for both TIF District 3-5 (Apache Plaza Redevelopment) and Chandler Tax Increment District are being modified to bring them into compliance with State Auditor budget requirements. Further, the budget for TIF 3-5 is being modified to reflect actual project activity/development to date. Since the City and HRA are modifying the project area boundaries. and the TIF budgets, the modifications are required to go through the entire public hearing process as if the City and HRA were creating new TIF districts. As part of this process, the Planning Commission found that the development plans for these two districts are in conformance with the City's general development/redevelopment plans of the City at it's February, 21, 2006 meeting. Please contact me at 651-697-8506 with any questions. cc: Jerry Gilligan -- Dorsey & Whitney File LEADERS IN PUBLIC FINANCE 3060 Centre Pointe Drive Phone: 651-697-8506 Fax: 651-697-8555 Roseville, MN 55113-1105 skvilvang@ehlers-inc.com 4