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I I I I I I I I -3- Public assistar~e for private real estate development in Minnesota needs to be reformat, not rejected. City go~-nments should be cc~..er~ed for their active roles in fightin~ deterioration and in promotin9 quality real estate devel_.~i~e_ nts. But today's syst~ of providin9 ass istar~e has shortccmings: * ~o muah em~is is 9iven to real estate assistar~e as an econ~nic development to~l. Its influence is felt mainly (m the location of jobs and tax base, not their creation. * Instead of being targeted to areas of real need, financial assistance is avai!ahle ~lm~st anywhere, f~ any type of real estate project. * Taxpayers often have no knowledge of how ~uch public _mc_my is bein9 spent c~ a real estate project, where it is cumin9 fran and who is receiving the benefit. * Dollars of real estate assistance do~'.t show up in the regular operating tudgets of city cour~ils. G~r~equently, city oouncils don'.t have to weigh the importance of real estate subsidies against competing needs for dollars. I I I * More help probably is given than is necessax~ to make a real estate project 9o beca,_~e city offici~l~ have little ir~entive to be tough negotiators. To c~rrect these and other problems we reo>~.,~-d a syst~ of real estate assistar~e that emphasizes direct, not indirect, sources of re~nue; appropriations, not entitl~ents; on-budget decisior£, not off-budget, ar~ assistar~e that is targeted, not general. $1~_~ifically the Legislature should: * Give each city governmen~ access to a new redevelopment fur~ that would be financed from direct state ar~ local revenue sources. * Allow expenditures from the fund only f~r renewal of properties, eonsistent with a Previously-adopted plan. * Instruct the Metropolitan G~uncil and other regional plannirg bodies in the state to develop guidelines to prevent ur~ecessary spendin9 in inter-city cc~pe~tion. * Give cities ir~entives to be tough negotiates with developers, includin9 ir~-~entives: (a) to negotiate fc~ recovery of financial assistance provided to developers, (b) to establish before negotiations begin a point beyond whid~ no further city assistance will be offered, ar~ (c) to use only experier~ed negotiat(xs. * Phase out tax-incr~nt finar~in9 as the redevelc~ment fur~ is established. In the m~ntime, tighten up tax-increment finsr~ing b~: (a) repealin~ its use where no redevelol~ent is occurring, (b) requiring a city government to reimburse the state l:~rtially for its loss of revenue, (c) disa]~win9 a~__ ~,~ation of surpluses in tax-incr~ent districts, beyo~ allowing the plac~ent of up to three years', surplus