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I I i I Real estate development nc~ is one of ~h~ most significant activities of city 9overr~ent in the ~]in Cities m~tropolitan area.--Sc~ mayors, city cDuncil members, ar~ top city staff spend 50 percent or more of their time on city development. The position of city development officer--formerly associated mainly with blight clearar~e and lc~ inoc~e housir~3--has beccme a key position in city government. City officials ergage in numerous negotiatin9 sessions with cc~nercial-industrial firms and developers. Developers us,rally concentrate on designir~ projects uniquely suited for certain locations. Scmetimes certain firms oontact several city governments, sh~pping around, so to speak, for tbe best d~l. I I I i I I I It is obvious that city governments need to look beyond the day-to-day provision of public services, to the lorg term health of their o~..,unities. Yet growir~ numbers of persc~, particularly in the U.S. (~orgress and in state legislatures worry wbether city governments might end up spendirg too much time on real estate development, thereby draining energies from their other resixx~i~illties: providir~ essential pnblic services such as street maintenar~e, garbage oollection, police and fire protection, and planning for the future. Mir~esota city 9overnments are amorg the most a~tive in the nation in providing real estate ass istance. --Although cities in all th~ 50 states are involved, evidence ir~icates a particularly ~eavy activity in Minnesota. For example, in 1983, Minnesota ranked third in th~ nation in absolute dollars of subsidized-interest bonds issued fGr private business ar~ irm]ustry, according to the Advisory (lm~mi ss ion on Intergovernmental Relations (~2IR). Minnesota also is a leading state in dedioatirg growth in local property taxes to financing de~lolm~ent, ac~ordirg to the ;~2IR. Investment in Mir~eapolis and Saint Paul has been particularly high--Urban Development Action Grants awarded since the program began in 1977 totalled $54 million in Minneapolis and $50 million in Saint pa,,1 through 1984. Taxes captured for tax-ir~re~ent purposes in that year totalled $22 million in Minr~apolis and $6.8 million in Saint Paul. Ir~ustria] revenue bonds authorized in Minneapolis in 1984 totalled $165 million and in Saint Paul, $185 million, aocording to a report from the research staff of the Minnesota House of R~presentatives. Results are cl~rly visible. Both cities have major develol~ents downto~q ar~ elsewhere that in~l%~d public financing of scme kind, including City Genter, Riverplace ~ Calhoun S~re in Mirnueapolis and Tc~n Square, Galtier Plaza and Bandana Square in Saint Paul. These cities are extremely proud of these in~stments. Msanwhile, other cities haw not been idle.--[~ta sb extensi~ use of financin9 tools in Twin Cities area suburbs ar~, to a lesser extent, in other parts of Minnesota. Suburban use is particularly large ar~ growing. Activity occurs intensi~ly in th~ most affluent suburbs as well as the less-fortunate c(mmunities. In 1984 the total ~alue of industrial revenue bor~s authorized by suburbs, ~25 million, exceeded the amGunt authorized by central cities, ~350 million. The ~ined central city-suburban total represented 87 peroent of ail such bor~s authorized thrcughout the state. Suburban use of tax-increment financirg is growing, tco. In 1984, of a total of $516 million of tax base then captured statewide for tax-inerrant purposes, about 51 peroent was in the central cities of Minneapolis and Saint Paul o~mbined; 32 percent in the rest of the seven-county metropolitan area, arm 16 percent in cities elsewhere in Minnesota. Ironically, most lm~blic assi~tar~e is being provided in metropolitan area, where t~e economy is the healthiest, and tl~ least is bein~