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Tax Increment Financing <br />To receive financial assistance in the form of a business subsidy though tax increment <br />financing, the project must meet at least one of the "public purpose" requirements as <br />defined in the City's Business Subsidy Policy. Under Minnesota law, the public benefits of <br />economic development, including an increase in tax base, tax revenues, employment, or <br />general economic health, do not by themselves constitute a public purpose. A "public <br />purpose" does however exist when a city or economic development authority undertakes a <br />project that involves the mitigation of blighted property, remediates an environmentally <br />contaminated area or pursues the reduction of abandoned property. In my professional <br />opinion, the project as defined will involve the mitigation of blighted property as well as <br />meeting other public purpose objectives established by the City's policy and therefore meets <br />the definition of a "public purpose" as defined by state statute. By meeting the "public <br />purpose" test, the project is eligible to be considered for tax increment financing assistance. <br />I hope this analysis is helpful as the City and the Economic Development Authority evaluate <br />the request from Life Fitness. This is an exciting project and should have a very positive <br />impact on the City of Ramsey. <br />• Page 3 <br />