Agenda - Council - 04/14/1981 - Laserfiche WebLink

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NAIOP LEGISLATIVE REPORT NAIOP HOLDS FIRST INFORMATIONAL SESSION By the time this column is printed, NAIOP Upper Midwest Chapter will have had its first Legislative Seminar with key Minnesota legislators at the Capitol Holiday Inn on April 3rd. A panel discussion is to be followed by lunch where, it is hoped, a useful and informal exchange of ideas will be made between key legislators and NAlOP members. A full report of this first for NAIOP will be made in your May newsletter. YOUR NAIOP LEGISLATIVE COMMITTEE AT WORK Our legislative counsel, Jim Erlckson and Bob Hoffman, are on top of the discussion of the IRB issue in the legislature on a daily basis. We have complete, detailed minutes of each committee hearing where the issue has been discussed. We have responded to certain testimony which we feel is er- roneous in fact. We are ready to testify at the appropriate time. You will be asked to call your legislator on this issue at the appropriate time. Your chairman met with Bill Schreiber at his offices to ex- -- James C. Stuebner, Chairman NAIOP Legislative Committee plain NAIOP's position and the importance of the avail- ability of tax-exempt t'mancing for commercial projects - particularly at this time when virtually no other form of long term debt money is available. OTHER ISSUES We are closely following other issues, including tax increment financing for development districts, property tax legislation, income tax legislation, land use legislation and environmen- tal legislation. We will keep you posted. WE NEED YOUR INPUT QUESTION: Do you believe continuing education require- ments should be maintained for real estate licenses? Let us know!! Keep us advised of any issues that are of con- cern to you in your development activities. Let us know there is an issue at the legislature where we need NAIOP input. Contact any member of the Legislative Committee: Robert L. Hoffman, Bob Worthington, Al Beisner, Boyd Stofer, Jeff Coult, Tom Davies, Greg Bradbury or Stuebner. LEGISLATIVE ACTIVITY BUILDS Proposed Changes in IRB Laws Bills have been introduced in the legislature to restrict the use of IRB's for commercial use. NAIOP Position: Minnesota cannot afford to change the state IRB statutes to make them more restrictive than federal statutes because it would put the state at a severe competitive disadvantage with neighboring and other states which are constantly seeking to lure prime Minnesota busl- nesses out of Minnesota. We also support the continuation of the existing Minnesota statutes for the use of IRB's for commercial purposes for the following reasons: 1. Commercial projects produce jobs, in some cases more jobs per square foot than industrial projects. 2. We are becoming a service-oriented economy and com- mercial projects (office buildings, research laboratories, retail facilities, sen'ice centers, etc.) are becoming a more and more significant portion of the non-residential buildings constructed. 3. Commercial buildings now produce more real estate taxes and usually higher income per employee per square foot than industrial buildings -- thus more state income The following analysis illustrates the economic impact on $1 million of value of commercial building space: ECONOMIC IMPACT $1,000,000 COMMERCIAL OFFICE DEVELOPMENT $1,000~)00 COMMERCIAL OFFICE BUILDING 16,000 ~quera foot building @ $62.60/sq. ft. 200 sq. ftdperson - 80 JOBS $20~00/person average payroll & benefits X 80 ' $1,600~00 annual peyroll {invested or spentl I nc~eas~ in Minnesota income tax O 7% = $112,000/year $1,000,000 CONSTRUCTION VALUE Assume 30% direct labor - $300,000 Minnesota income tax - $21,000 Value of materials purchased - $300,0G0 Value of Services Purchased: - Ar=hitacts engineers, lawyers -- $. 1 .50, .0~0 . 0 00 -- Int~est pa~d to banks end finnncm inst~tut~ons -- $15 ,0 Profit available for savings or spent = $100~)00 Property Taxes Paid: $1,000,000 X 43% Assessed Marked Value $ 430~00 Property taxes paid to state, county and local governmeflt. assuming 100 mil rate - $43,000/year Total FIRST YEAR ECONOMIC IMPACT per $I million ' office space added to economy: $ 2r776r000 ANNUAL ECONOMIC IMPACT: ' - Payroll $1 ,GOO,DOG Taxes 176,000. $1,776,000 TOTAL TEN YEAR IMPACT MINNESOTA ECONOMY PER $1 MILLION OFFICE SPACE: S18,760~00