Agenda - Council - 04/28/1981 - Laserfiche WebLink

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-3- League Amendment Strike Section 2. Explanation of Amendment The way the bill is currently drafted, the January 2 value is not definite because it is subject to appeal and change. It is essential to have a "real number" at the time the district is certified so that the appropriate cash flow projections may be made. That is why it is necessary to refer to the most recently certified value. Given the major administrative and practical problems with this section of the bill, the best answer to to delete it. The problem it is meant to address, that of "windfall" gains in captured assessed value, is not really that great. Inmost circumstances the value of property in a tax increment district is not increasing very much, if at all. There is no evidence that a significant amount of value is being captured that would otherwise end. up,in base value. — 1 0 3. UP - MUCH MORE DIFFICULT Summary M.S. 273.73, subd. 10, defines the types of projects which may qualify as redevelopment districts. Paragraph 2 of that subdivision contains an objective "blight finding" requirement. 20% of the buildings must be structurally substandard and an additional 30% of the buildings must be "found to require substantial rennovations or clearance" in order,to remove specified problem conditions. Section 3 of S.F. 635 would increase the 20% requirement to 25% and the 30% requirement to 40 %. League Amendment The League opposes this particular change because it will make it much more difficult for a blighted area to qualify as a redevelopment district. . Explanation of Amendment The S.F. 635 approach would tend to encourage a spot renewal approach to redevelopment as opposed to a more comprehensive area approach. Second, it would be necessary to conduct much more thorough. inspection of buildings in order to the district. This would add substantially to planning and - administrative' costs of the project, and would particularly harm smaller cities and smaller TIF projects: The current blight finding requirement is quite strict and there is no need for it to be made stricter. This portion of the bill would make TIF much more unworkable, especially for smaller cities. 4. INCLUDES BOND COUNSEL AND CONSULTANT COSTS INTO ADMINISTRATIVE EXP Summary M.S. 273.73, subd. 3, currently limits administrative expenses to 5% of the total tax increment expenditures. Section 4 of S.F. 635 would include as administrative expenses; and thus subject to the limit, "amounts' paid for services provided by bond counsel, fiscal consultants', and planning or economic development consultants." (OVER)