6.0. HRSR 01-28-2002 - Laserfiche WebLink

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• Court of Appeals overturns Walser district court decision Andrea Hedtke On Tuesday,November 13,the Min- Appeals disagreed and stated that • Methods for determining nesota Court of Appeals overturned a "...several aspects of the TIF-district conditions of buildings district court decision involving the creation were fundamentally flawed." Finally,the laws governing redevel- city of Richfield and the Walser In its rationale, the Court of opment TIF districts require that family.The district court had dis- Appeals highlighted three primary more than 50 percent of the missed a lawsuit filed by the Walser issues: best efforts,distribution of buildings be"structurally substan- family alleging the city acted improp- buildings,and methods for determin- dard."The statutes provide a fairly erly when it established a redevelop- ing conditions of buildings: lengthy definition of structurally ment tax increment financing(TIF) • Best efforts substandard.The Court of Appeals district that included property on In establishing a redevelopment TIF found that the methodology used by which Walser's automobile dealership district and making structurally the city's architectural firm in operations stood. substandard findings, a city must use determining the buildings at issue In the underlying decision,the its best efforts to obtain permission to be structurally substandard was district court found that the TIF from the property owner to gain "rife with inaccuracies."Of the five district created by the city met the access for an interior inspection. points discussed by the Court, it statutory public purpose requirement The Court of Appeals determined appeared particularly concerned since expenditures would be used for that the two letters,sent to property with the fact that the basis for the land acquisition and public improve- owners by the architectural firm structurally substandard determina- ments. In its decision, the Court of hired by the city,requesting access Lion often related to whether the Appeals stated that the key question is for the purpose of an interior building was in compliance with whether the public purpose served by inspection,without subsequent the state energy code.The Court a TIF district is primary as compared phone calls and door knocking, did stated that the city was in error in with any private interest served.The not constitute best efforts. considering energy code compli- . Court of Appeals directed the district • Distribution of buildings ante in the structurally substandard court to revisit the issue of whether The TIF laws also require that determination. the TIF expenditure was primarily for structurally substandard buildings be It is likely the city of Richfield a public purpose and to conduct a "reasonably distributed throughout will appeal the Court of Appeals' comparative analysis. the district."The Court of Appeals decision to the Minnesota Supreme The district court also found that found that the buildings the city Court. In the meantime,in light of the redevelopment TIF district was determined to be structurally this important decision, cities may be lawful in all respects, including the substandard were not reasonably well advised to evaluate how their "structurally substandard" findings distributed because they were all procedures in establishing redevelop- required by statute.The Court of located in the north 60 percent of ment TIF districts compare with those the TIF district. followed by the city in this case.Y Visit the League on the Web: www.lmnc.org 0 for all the latest information about how your city can participate and benefit from LMC and LMCIT services, resources, and training opportunities. November 21, 2001 Lei y we o m N CG,f es ��..el C) Page 7 .. L,if-i es 13 4 1'e-h rl —