Key Terms - Eagle River Station

Following are Key Terms used in the discussion of the proposed Eagle River Station project.
Note that, these are intended to be in common language rather than exhaustive precise legal
definitions.

1. Adequate Public Facilities (APF) - Standard of the Town’s Land Use and Development
Code to ensure that the public facilities (such as water, sewer, streets etc.) needed to
support new development will be available concurrent with the impacts of the
development and will function at acceptable levels of service.

2. Agreements:
a. Development Agreement -establishes the development standards and requirements
for the project and associated public improvements.
b. Reimbursement Agreement -defines the requirements and pledge of urban renewal
revenues to the District as part of the funding for the Eligible Public Improvements.

3. Conditions Precedent - The requirements that must be satisfied in order to activate the
Urban Renewal Authority’s obligations under the Reimbursement Agreement.

4. Cooperation Agreements -Agreements establishing certain conditions such as that the
property taxes will be forwarded to the Ambulance, Recreation and Fire Districts.

5. District Cost Certification Process - The specific requirements for the Eligible Public
Improvements costs to be submitted to the District for payment or reimbursement. This
process includes the certification that the costs are for the improvements that are eligible
under the District’s Service Plan (which itself was certified as being in compliance with
State statutes) and supporting documentation to verify the actual costs.

6. District Financing Plan - a detailed report to be submitted by the District to the Urban
Renewal Authority to document the cost projections for the Eligible Public
Improvements and that there is adequate funding to complete those improvements.

7. District Mill Levy - The district will impose its own mill levies / property taxes within
the District project to contribute to the debt service for the Eligible Public Improvements
(i.e. District debt mill levy) and a separate maintenance mill levy to fund the servicing of
the District’s public improvements that are not maintained by the Town.

8. Eagle River Station Metropolitan District (District) - A separate government entity
established and operating in compliance with State statutes in order to finance, construct
and maintain the Eligible Public Improvements. The District has the power to issue debt
obligations (i.e. bonds) to pay for those improvements using its District debt mill levy
and the reimbursement revenues for debt service.

9. Eagle River Station PUD Guide and Control Document - Set of specific land use and
design standards and principles that would apply to the development within Eagle River
Station. This document addresses permitted land use, building floor area and height
standards, architectural and landscape standards and principles, parking, signage and
lighting among other elements.

10. Eligible Public Improvements and Eligible Costs:
a. Minimum Eligible Public Improvements - Those public improvements (primarily
the I-70 interchange, other public roads, offsite water and offsite sanitary sewer) that
must be completed as a prerequisite to the Town / Urban Renewal’s reimbursement
obligations.
b. Additional Eligible Public Improvements - The additional public improvements
(including such items as on-site water and sewer systems, additional street
construction, trails, bus stops, landscape, etc.) that are eligible for funding by the
District. Note that the term “additional” does not mean that the developer has the
option as to whether or not to build these. The developer’s obligations for all the
public improvements are defined in the PUD Guide, Development Agreement, etc.
c. Eligible Costs - Includes the above, plus the District’s costs for financing and the
interest on the debt to fund the above improvements.

11. Incremental Town Servicing Costs - The additional costs to the Town as a result of the
project at various levels of development, including such items as general administration,
police, street and parks maintenance, etc.

12. Minimum Private Improvements, Phase 1 and Phase 2 / Buildout - The minimum
private improvements, defined as at least 210,000 square feet of gross floor area that
produce municipal sales tax, which are a prerequisite to the Town / Urban Renewal
reimbursement obligations under the Reimbursement Agreement. The Phase 1
development of 560,967 square feet of retail space and Phase 2 of an additional 153,787
square feet resulting in a buildout total of 714,754 square feet of retail space are the
Developer’s projections of development based on its plans.

13. PIF - Credit PIF and Add-On PIF - PIF stands for Public Improvement Fee that while
appearing to be similar to a sales tax is actually a fee (i.e. not a tax) used to contribute to
the District’s funding of the Eligible Public Improvements. This fee is established by
means of a covenant on the property (PIF Covenant) and is collected at the point of sale
at the same time as the sales tax. Note that a PIF Notice must be posted at all retail
businesses and all retail receipts must itemize the PIF separately from the sales tax.

The PIF for Eagle River Station will be 4.0%, made up of the following 2 components:
a. Credit PIF -the PIF that will be credited as a replacement for 2.55% of the Town
sales tax (i.e. the original 4.0% at 1.45% because of the 2.55% that is replaced by the
credit PIF).
b. Add-On PIF - the 1.45% PIF in addition to the sales tax and credit PIF (i.e. resulting
in a total sales tax plus PIF of: 1.45% sales tax + 2.55% credit PIF + 1.45% add-on
PIF = 5.45%).

14. Sales Tax Credit -The Town’s credit of the 2.55% of the Credit PIF to its sales tax for
properties within the Eagle River Station project during the term of the agreement
(through 2038 or sooner if District’s debt obligations are satisfied). That sales tax credit
will result in net sates tax collections to the Town of 1.45% from the project during the
term.

Example of Fees and Taxes Paid on a $100 Purchase at Eagle River Station
$100 x 4.0% PIF (2.55% credit PIF + 1.45% add-on PIF)
x 5.85% Sales Tax (2.9% State + 1.5% County + 1.45% Town)
Equals
$100 x 1.04 = $104 x 1.0585 = $110.84

15. Term (of the Agreements) - The conditions or dates under which the conditions of the
agreement(s) are satisfied and any obligations expire. In the case of the Reimbursement
Agreement, the Town / Urban Renewal Authority’s reimbursement obligations expire the
sooner of the full repayment of the District’s debt or 2033 in the case of property taxes or
2038 for the sales tax reduction.

16. TIF - Tax Increment Financing - The use of the “incremental” property and/or sales
taxes (i.e. the revenues that are a result of the project improvements over and above the
pre-existing base revenues) to fund public improvements associated with the project. The
consideration is that the project and associated improvements are desirable and that the
project could not proceed without the benefit of the TIF contribution (commonly called
the “but for” test).

17. Urban Renewal Authority - Town of Eagle vs. Town of Eagle Urban Renewal
Authority - The Urban Renewal Authority is a separate governmental entity established
in compliance with State statutes for specific purposes under the statutes and as defined
by the Authority’s Urban Renewal Plan. Urban renewal authorities have specific unique
powers, such as the use of property tax increment to fund public improvements associated
with a project. The Authority operates under the oversight of the Town and in Eagle’s
case the Town Trustees also sit as the Authority’s board. Note that commitments by the
authority do not rely on nor do they implicate the credit of the Town.

18. Water/Wastewater Plant Investment Fees - Plant Investment Fees (often referred to as
tap fees) are 1-time fees collected by the Town for the purpose of capital construction
projects related to providing water and wastewater service. The primary intent of the fee
program is to ensure that the Town has the financial resources to expand utility facilities
as necessary in order to serve new growth within the Town’s utility service area. The fees
are calculated based upon the type and size of the proposed development. Water Plant
Investment Fees are paid to the Town at the time of vesting (at the time that developer is
granted the right to develop a project). Wastewater Plant Investment Fees are paid to the
Town at the time of building permit. The Town Board has some discretion to negotiate
payment or securitization of the fees at different points in time and in differing amounts
when doing so is deemed to be in the best interest of the utility operations. Often the use
of these fees is discussed in conjunction with the expansion of treatment facilities, but
these fees may be used to fund any construction associated with the water and wastewater
systems. Payment of the fees by developers/builders helps to ensure that growth “pays its
own way” rather than having expansion costs divided up amongst all existing utility
customers.