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<br /> Page 18 Minnesota Rea state Journal April 29, 2002
<br /> ABATEMENT from previous page ,
<br /> Before property tax reform, the aver- However, some school districts have
<br /> age breakdown of the tax bill was as fol- participated in abatement projects in the
<br /> lows: One important thing to note is that abatement cannot be past.Typically,they have had short peri-
<br /> . ods of assistance or have assisted devel-
<br /> School District: 50 percent opments that increase enrollment in a
<br /> County: 30 percent used at the same time as a TIF district. However, some mature school district. Counties also
<br /> City: 20 percent. have,in the past,been reluctant to favor
<br /> •urisdictions have tacked abatement on to the end of a TIF one business or housing development
<br /> Under this breakdown, abatement I over another. However, counties seem
<br /> was a less powerful tool because it wasmuch more interested in utilizing abate-
<br /> difficult for a school board to agree to district , after it has been decertified, to provide additional ment today for job creation efforts now
<br /> help a private development when it is that the economy is in a recession.
<br /> increasing class sizes or cutting bus assistance to a development.ment. Because of these issues, cities tended
<br /> routes, even though the funding for the to be the main source of abatement
<br /> abatement is a different source than funds, with the lowest share of the tax
<br /> general fund money. dollar. Since property tax reform, the
<br /> roles have reversed and cities have more
<br /> funds available for abatement, as do
<br /> lcounties.
<br /> ESOTA'` While great variation exists in the
<br /> M split of a tax bill, the average break-
<br /> down is now:
<br /> Twin Cities Real Estate Professionals f� 1 School District: 25 percent
<br /> County: 38 percent
<br /> CornerHouse Fundraiser City: 37 percent.
<br /> Hosted Based upon this breakdown in taxes,
<br /> Hosted by Dave Mona and Roy Smalley the mechanics of abatement are fairly
<br /> easy to grasp. Let's assume that an
<br /> existing private medical clinic is going
<br /> When:
<br /> Picnic: 4:00 p.m. Game: 7:05 p.m Where: Picnic area to add 20,000 square feet to its facility,
<br /> but the site requires major soil correc-
<br /> Tuesday,June 25, 2002 Music provided by Twins vs. on the SE side of the tion. The existing annual property taxes
<br /> the NAIOP's Chicago White Sox Metrodome byGate D ond the clinic are increase$20, , and the new
<br /> $ addition will taxes by $40,000
<br /> for a new total tax bill of$60,000.
<br /> • — Each major taxing jurisdiction is able
<br /> Registration Form h to decide whether its share of the prop
<br /> ,, , . �. . ., 1 erty tax bill for a development should
<br /> Name be returned to the project for a period of
<br /> up to 15 years.The facility will still pay
<br /> ��� �a taxes (unlike the traditional view of an
<br /> Ln - , abatement) and will receive a benefit
<br /> P y through an annual rebate or through a
<br /> general obligation (G.O.) abatement
<br /> bond issued by one of the local govern-
<br /> Addressments (see chart).
<br /> Based upon our example, the city
<br /> City,State,Zip could now rebate up to$22,200 per year
<br /> of the new total tax bill of$60,000 for
<br /> our clinic project, which is 46 percent
<br /> Phone higher than before tax reform. If the
<br /> county can be persuaded to participate,
<br /> Packages: Individual Tickets: the annual assistance could be increased
<br /> up to $45,000 (city plus county por-
<br /> tions). he
<br /> The Red and White packages include 10 tickets Includes tickets to thegame and thepicnic. project,
<br /> Total assistancehhecityayaand otty
<br /> project, if both the and county
<br /> to the game,picnic and 4 free parking passes. agreed to participate and abate 100 per-
<br /> cent of the taxes, could be as high as
<br /> $675,000.
<br /> t R dr Package (Infield tickets) 3 Individual Infield Tickets Other innovative uses exist for abate-
<br /> ment as well.If new development is tax-
<br /> pkgs @ $600.00 = @ $60.00 = ing the limits of a roadway intersection,
<br /> abatement can be used to finance road
<br /> White Package (Lower level tickets) improvements where no specific benefit
<br /> Individual Lower Level Tickets can be assessed to one or more proper-
<br /> ties. A new single-family housing sub-
<br /> pkgs @ $450.00 = @ $45.00 = division with high assessments could be
<br /> assisted with abatements to assure
<br /> Blue Package (no game tickets) affordability in the new homes.A rental
<br /> housing development badly in need of
<br /> pkgs @ $300.00 = renovation could have its taxes abated
<br /> for five years to allow for major
<br /> improvements, or a redevelopment area
<br /> could be assisted with abatements from
<br /> Package Total $ Individual Total $ within and from surrounding properties,
<br /> outside the boundaries its area.
<br /> One important thing to note is that
<br /> GRAND TOTAL AMOUNT ENCLOSED $ abatement cannot be used at the same
<br /> time as a TIF district. However, some
<br /> Please mail this registration form with your payment jurisdictions have tacked abatement on
<br /> ts
<br /> by MAY 31,2002,to reserve your CornerHouse Send to: CornerHouse been te end tioa TIF district,ovdafter it nhal
<br /> decertified, to provide additional
<br /> Fundraiser Picnic and Twins game tickets. 2502 - 10th Avenue South assistance to a development.
<br /> Minneapolis,MN 55404 For example, a western Minnesota
<br /> Game tickets will be mailed in advance. city and county extended a nine-year tax
<br /> Questions? increment district to more than 20 years
<br /> Make checks payable to CornerHouse - Call Karen Larson 952-885-0815 ofassistance for the development of a
<br /> P Y pork processing plant—thus providing
<br /> a 501 (c) (3) charity or email to klarson@rejournals.com needed assistance to secure financing
<br /> for its construction.
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