Agenda - Planning Commission - 09/10/2015

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Minn. Stat. § 469.177, subd. 1 State v. Wicklund, 589 N.W.2d 793 (Minn. 1999). Minn. Stat. § 469.174. Minn. Stat. § 469.175 subd. 2a. Minn. Stat. § 469.176, subd. lb. Minn. Stat. § 469.176, subd. li. Minn. Stat. § 469.176, subd. 4c. Minn. Stat § 273.13, subd. 24. Minn. Stat. § 469.176, subd. 7. CHAPTER 15 Tax increment financing is a funding technique that takes advantage of the increases in tax capacity and property taxes from development or redevelopment to pay upfront public development or redevelopment costs. The difference in the tax capacity and the tax revenues the property generates after new construction has occurred, compared with the tax capacity and tax revenues it generated before the construction, is the captured value. The taxes paid on the captured value are called "increments." Unlike property taxes, increments are not used to pay for the general costs of cities, counties, and schools. Instead, increments go to the development authority and are used to repay public indebtedness or current costs the city incurred in acquiring the property, removing existing structures or installing public services. Thus, the property owner in a TIF district continues to pay the full amount of property taxes. TIF involves only the increased property taxes generated within the district. It does not change the amount of property taxes currently derived from the redevelopment area, nor does it directly affect the amount or rate of general ad valorem taxes the city levies. The result of a TIF project is an increased tax base that will benefit all local taxing jurisdictions. Additionally, TIF districts usually spur economic development and redevelopment through creating job, removing blight, and providing more affordable housing. Amendments to TIF law in 2012, address changes caused by the market value exclusion program. If the market value of a homestead property within a TIF district reduces of the homestead market value in the district, the original tax capacity of the TIF district will be reduced by the same amount. Thus, the tax increment collected by the city will remain the same. If your city has a TIF district with townhouses or condominiums, you may want to verify that valuations are properly adjusted by the county auditor. TIF is used to encourage four general types of private development: redevelopment, renovation and renewal, growth in low- to moderate -income housing, and economic development. Public financing using TIF funding for a privately owned facility does not make public space in the facility a public forum for free speech purposes. A TIF district may involve compact development. Two major conditions must be satisfied: • Parcels consisting of 70 percent of the area of the district are occupied by buildings or similar structures that are classified as class 3a property under state law. and • The planned redevelopment or development of the district, when completed, will increase the total square footage of buildings, classified as class 3a under state law, occupying the district by three times or more relative to the square footage of similar buildings occupying the district when the resolution is approved. In some specific situations, a TIF authority may request inclusion in a tax increment financing district and the county auditor may certify the original tax capacity of a parcel or a part of the following property types: 15:14 LEAGUE OF MINNESOTA CITIES This chapter last revised 12/1/2012