6.0. EDSR 03-13-2006 - Laserfiche WebLink

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ITEM / 6. MEMORANDUM TO: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Development~~ DATE: March 13, 2006 SUBJECT: Discuss Draft Amendments to the City's Tax Abatement Policy and Application Attachments • Tax Abatement Policy and Application, 1" Draft Amended March 2006 Background Staff has been working on a review of the city's various economic development financing programs and policies fox amendments. The City of Elk River adopted its original Tax Rebate Financing Policy in Apri12000, shortly after the state legislature authorized the use of tax abatement as an economic development fmancing tool. The policy was amended in August of 2002 to include clarifications on the use of tax abatement fox speculative office developments. Issue Since the many of the amendments were minor (but significantly affected the document reformatting) staff has provided the attached clean copy of the revised policy and application fox the EDA's review. Please contact staff if you wish to receive a copy of the word-by- woxd tracking of revised policy amendments. Below is a summary of the significant staff amendments: • Changed the program name from Tax Rebate Financing to the statutory name "Tax Abatement" in order to eliminate the confusion among developers and applicants. • Added "significant increase of the City's tax base" as one of the objectives (Section ITI) • Reduced the owner cash equity requirement from 20% to 10% (Section I~ • Added a provision fox the use of tax abatement as a "location incentive" fox certain desired conditions (Section ~ • Deleted the summary of the City's Business Subsidy Policy and state statute. Rather the City's Business Subsidy Policy will be attached to all financing policies and applications. Staff is currently reviewing the City's Business Subsidy Policy fox suggested revisions to be reported at next month's EDA meeting.