Agenda - Council Work Session - 10/26/2010

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Q Springsted MEMORANDUM Springsted Incorporated 380 Jackson Street, Suite 300 Saint Paul, MN 55101 -2887 Tel: 651 - 223 -3000 Fax: 651 - 223 -3002 www.springsted.com TO: Heidi Nelson, Deputy City Administrator /Director of Community Development FROM: Tom Denaway, Analyst Tony Schertler, Senior Vice President Mikaela Huot, Assistant Vice - President DATE: October 20, 2010 SUBJECT: TIF Plan Overview At the request of the City we have prepared a draft TIF Plan for the COR Development at Ramsey project. Included with preparation of the TIF Plan is the development of a projected TIF revenue stream that assists with creation of the TIF Plan budget. The purpose of this memo is to outline the assumptions Springsted used to create the draft TIF Plan, as well as identify potential outstanding policy decisions related to the creation of the TIF District. The memo will address the following topics: 1. Purpose of the TIF Plan 2. Build -out and value projections, including underlying assumptions 3. The impact of Fiscal Disparities election on the TIF Plan Budget 4. Proposed TIF Plan Budget for revenues and expenses Purpose of the TIF Plan: The TIF plan outlines the future development assumptions, notes the statutory authority under which the District is created and must adhere to, and sets the budget for the future revenues and expenses of the TIF District. The TIF Plan does not provide and /or require the direct financing of the projects.. It,does, however, provide the authority for the future financing of certain anticipated development activities, which is important for large TIF Districts such as the proposed HRA TIF District one in which future development activities may be unknown. The TIF Plan provides the HRA and City with the authority to enter into future financial obligations based on actual development activities. The build -out and value assumptions used in preparing the draft TIF Plan were used to set the overall budget authority for the District. These assumptions are based on the speculative nature of the project at this initial phase, and are used to set the budget of the District while providing the HRA and City with maximum flexibility with future administration. The financing of specific public improvements, and /or the providing of development subsidies, should be evaluated on a case by case basis to determine feasibility, need for assistance, and the appropriate amount of financing issued. This financing analysis will be performed on more concrete development assumptions, and based on specific projects and development outcomes. It is assumed this secondary analysis will create the actual TIF obligations of the District for which the TIF Plan provides the authority, and will be based on specific development plans. Public Sector Advisors