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ARLIN B. WAELTI <br />(Bl~) 3,43 - 1::'8 g <br /> <br />O'CONNOR & HANNAN <br /> ATTORNEYS AT LAW <br /> <br /> 3800 I D S TOWER <br /> <br /> 80 SOUTH EIGHTH STREET <br /> <br />MINNEAPOLIS, MINNESOTA 55402-2254 <br /> <br /> (6i2) 34i-3800 <br /> <br /> TELEX 29 -0584 <br /> <br /> TELECOPIER 612 341-3800 (256) <br /> <br />COUNCIL <br />APRIL 30, 1985 <br />ATTACHMENT I <br /> <br /> SUITE 800 <br /> <br />WASHINGTON, D. C. ~000S-34E~3 <br />(202) S87-14OO <br /> <br />SUITE '/,700 ONE UNITED SARK CENTER <br /> <br /> I?00 LINCOLN STREET <br /> <br />USE OF TAX INCREMENT FINANCING <br /> <br />Advantages <br /> <br />Creates tax base and employment <br />that would not otherwise occur. <br /> <br />Allows financing of public <br />improvements without an election. <br /> <br />Bonding not included in bonded <br />indebtedness. <br /> <br />Provides city with locally <br />controlled development financing. <br /> <br />Provides administrative funds <br />for operating city economic <br />development program. <br /> <br />Commitments of city and developers <br />spelled out in development/assess- <br />ment agreement. <br /> <br />Limitation in the law protects <br />cities. <br /> <br />City has complete control over <br />use of tax increment financing. <br /> <br />Disadvantages <br /> <br />"But for" test is subjective. <br /> <br />Used to circumvent referendum <br />or special assessment requirements. <br /> <br />Amount of tax increment debt may <br />affect credit rating. <br /> <br />Developers may pressure city into <br />inappropriate uses. <br /> <br />Developers may see tax increment <br />as "their" money. <br /> <br />Failure of development to occur <br />creates general tax levy. <br /> <br />County and school district denied <br />tax base until bonds are paid off. <br /> <br /> <br />