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of assistance is appropriate for a project of this type and size. The reduction of the duration of the district also <br />allows the City to receive tax revenue from the project sooner. The TIF assistance request would be the largest <br />provided for a single project in Ramsey. Based on the proposed level of assistance, both Staff and Ehlers are <br />recommending a look -back provision that would allow the City to reduce the TIF provided if the rate of return <br />exceeds the projected rate of return if assistance is provided. <br />Based on review of the Developer's pro forma and under current market conditions, the proposed development <br />may not reasonably be expected to occur solely through private investment within the near future. Due to the <br />costs associated with developing the property and constructing housing with affordable rents, this project is only <br />feasible, in part, through public assistance. As such, this project does meet the "But -For" test needed for the <br />provision of TIF and is not unduly enriching the developer. <br />TIF assistance should be provided on a "pay-as-you-go" (PAYGO) basis. With PAYGO TIF assistance, the City <br />does not provide any funding up -front. Instead, the City enters into an agreement to provide tax increment <br />payments that are generated solely from the project's actual increased property taxes. The Developer uses those <br />tax increment payments to obtain additional debt and/or support returns on investment. If the tax increment is <br />insufficient to pay the $2.7 million in total TIF notes, the City does not make up the shortfall. <br />Alternatives: <br />1) Recommendation to the City Council supporting the project and the attached term sheet and assistance levels <br />2) Recommendation to the City Council supporting the project with revisions to the term sheet and assistance <br />levels <br />3) Recommendation to the City Council supporting the project but not supporting city assistance for the project <br />4) Request for more information <br />5) Something else <br />Funding Source: <br />Pay -Go Tax Increment Financing <br />Recommendation: <br />Based on discussion <br />Outcome/Action: <br />Many alternatives have been presented to the EDA. Based on discussion an alternative from below could be <br />selected: <br />1) Recommendation to the City Council supporting the project and the attached term sheet and <br />assistance levels <br />2) Recommendation to the City Council supporting the project with revisions to the term sheet and <br />assistance levels <br />3) Recommendation to the City Council supporting the project but not supporting city assistance for the <br />project <br />4) Request for more information <br />5) Something else <br />Attachments <br />Site Location Map <br />Development Concept Map <br />ACTION - Prelim Term Sheet <br />Ehlers TIF Analysis <br />