Agenda - Economic Development Authority - 08/09/2004

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CASE # EDA LEVY AUTHORITY By: Sean M. Sullivan, Economic Development / TIF Specialist Background: On November 28, 1998 the City Council approved a resolution creating an Economic Development Authority (EDA) in the city of Ramsey. The resolution gives all the statutory powers of an EDA and Housing and Redevelopment Authority (HRA) to the Ramsey EDA. The EDA budget is funded primarily through two sources: 1) proceeds from the sale of City /EDA owned property and 2) the HRA Levy. It is important for the EDA to have the ability to make purchases of property, sometimes on short notice, so that it able to assemble properties in a timely manner for redevelopment. Additionally, it is also important to have adequate funding in order to utilize consulting tools for development and redevelopment. The EDA is still paying for the acquisition of Alloy Rec. overy through the HRA levy, and a minimum of $60,959.03 will need to be levied for payable 2005. The enabling resolution adopted in 1998 requires that all recommendations by the EDA be sent to the City Council tbr approval before any action is taken. Observations: The City has recently increased its redevelopment activity in TIF District No. 2. A sewer and road project was completed the Summer of 2004 and there has been interest by private parties to facilitate redevelopment in the area. The city needs the flexibility to continue playing a significant role in redevelopment in "Tin Pan Alley", now known as the Critical Blight Redevelopment Area (CBRA). If the City does not continue to proactively approach redevelopment in the area, progress could slow, or stop, and future redevelopment costs will continue to rise. At some point, it will likely become necessary to relocate current businesses in the area to parcels outside TIF District No. 2. TIF Funds cannot be used for this purpose so it becomes necessary to have access to different funding sources to complete redevelopment projects. For instance, the KIH, B & A Cylinder and Debee properties are located outside of TIF Districts, but have similar acreage to parcels located within Tax Increment' District No. 2. These types of parcels would be good relocation destinations for businesses that are willing to sell in the CBRA. Unfortunately, the City General Fund has not been utilized for these types of transactions, mainly due to the unavailability of funds. Other actions such as demolition and clean-up can be accomplished through EDA funding. It is the role of the EDA to promote Economic Development and Redevelopment within the City of Ramsey, and the need for the EDA to seek funding for these possible activities is clear. In order to address future needs for land acquisition and participate in future redevelopment opportunities, it would be prudent for the EDA to seek additional funding. The HRA levy implemented last year is Market Value based and uses a percentage of 0.0144% spread over the tax base of Ramsey (see chart on next page). It is significant to note that the' HRA levy falls outside the State imposed levy limits and will not be subject to restrictions during levy limit years. This increases the amount of money that the City will be able to use for redevelopment and economic development activities.