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! <br /> <br />I <br />I <br />I <br />i <br /> <br />VI. <br /> <br />DISTRICT TYPES <br /> <br />A. The Minnesota Tax Increment Financing Act creates three types of tax <br /> increment districts: ~redevelopment districts," housing districts" and <br /> "economic development districts.~ <br /> <br /> 1. Redevelopment district <br /> <br /> a. 50% physically substandard requiring substantial rehabilitation or <br /> demolition, or <br /> <br /> b. 20% physically substandard and 30% "blighting influences~, or <br /> <br /> e. raw land, but cost to acquire plus cost to make buildable exceeds <br /> fair market value afterwards, or <br /> <br /> d. air rights over public property. <br /> <br /> e. underutilized railroad right-of-way. <br /> <br /> 2. Housing district - subsidized housing. <br /> <br /> 3. Economic development district - discourage businesses from moving, <br /> increased employment increased tax base. <br /> <br /> B.' .The cost of any improvement which could be specially assessed cannot be <br /> considered in applying the raw land test. <br /> <br />LIMITATIONS <br /> <br />A. The <br /> 1. <br /> <br /> Tax Increment Act imposes a series of limitations: <br /> <br /> Durational limitation of 25 years for redevelopment and housing <br /> districts, 8 years for economic development d~strict. <br /> <br />2. Excess tax increment must be returned or used to prepay debt. <br /> <br />3. Only 10% of tax increment can be used for administrative cost~. <br /> <br />4. Redevelopment contracts must be in hand before land acquisition <br /> except in limited cases. <br /> <br />5. If nothing done in a district for 3 y. ears, district dissolves. <br /> <br />6. If nothing done on a parcel in a district for 4 years, the parcel drops <br /> out of district. <br /> <br /> These were adopted in response to alleged abuses of prior laws. <br /> <br /> <br />