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City Administrator Ulrich said the value of the TIF at 85% is based on the building value of the entire project and will be part of the entire incentive package to project. Development Manager Lazan said 85% was made to make the deal and now we'd like to get the actual numbers and apply the final figure. Commissioner McGlone said this is a subsidy and not a loan, which is a big difference. Chairperson Elvig said the TIF portion is a subsidy after the financing is paid back. Development Manager Lazan stated that but/for the project TIF money the project wouldn't be there, so this is in fact a note paid to the developer for cash they receive over a period of the TIF note. Commissioner Tossey said this is clearly a banking function and noted Ramsey is a city. He said the City was asked to hold off on a $2.8 million subsidy. Commissioner Backous asked about the downside to encumbering those TIF dollars and what's the risk if we use the TIF dollars. HRA Executive Director Nelson said the legislature allowed a funding stream to give incentives for development, but/for would the development have occurred naturally is unsure. She said they created the district as a tool to create development, which benefits the City because we capture the base value. She said that being set up as 85% while we keep the 15% for other uses but/for the rail station and interchange. Commissioner Ramsey said that when the City went to the legislature for the TIF District we submitted a plan of $8 million for incentives to give away to developers. He said we have to meet this criteria, although it does not have to be in one project. He said to date there is still $6 million available. Commissioner McGlone said when testifying at the legislature for TIF they discussed the purpose, which was to create construction jobs. He said whether we agree or not that is the main point and this is a proper use of the money. Commissioner Backous said he wants construction jobs too but added project that dismisses the ability to use TIF in other places. He said this is a pay-as-you-go option and we don't pay until we receive. Commissioner Tossey said he is concerned about placing $8 million into one project, as he would like to develop other items in The COR such as an overpass. He said our ability to bond out different infrastructure is in TIF District 14. Commissioner Tossey added that even if that's what was intended for the district it doesn't make it right because private development should pay. Housing and Redevelopment Authority / June 28, 2011 Page 5 of 7