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Page 18 Minnesota Real Estate 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 level-
<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 havetacked abatement to theend of a TIF one business or housing development
<br /> Under this breakdown, abatement ion
<br /> 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 devel0 ment. Because of these issues, cities tended
<br /> routes, even though the funding for the p 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 /> The I I thAnnualWhile great variation exists in the
<br /> MINNESOTA' counties.
<br /> split ofa tax bill, the average break-
<br /> ft Twin Cities Real Estate Professionals '�`: ` ; � � { down is now:
<br /> School District: 25 percent
<br /> e�
<br /> County: 38 percent
<br /> CornerHouse Fundraiser City: 37 percent.
<br /> 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: 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 coffee-
<br /> Tuesday,June 25, 2002 Music provided by Twins vs. on the SE side of the tion. The existing annual property taxes
<br /> onthe NAIOP's Chicago White Sox Metrodome by Gate D addition the clinic are increase$20, , and the new
<br /> will taxes by $40,000
<br /> for a new total tax bill of$60,000.
<br /> u,, ---
<br /> IiIPj1U
<br /> hs l til p • • -, {v ,- : , Each major taxing jurisdiction is able
<br /> � — Registration Form ,, todecidewtherp,0 # Yui ta; ; ,r.._i-',t. s -,+"4t t 5 F r,i
<br /> . 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 /> taxes (unlike the traditional view of an
<br /> .)-hiL Pang abatement) and will receive a benefit
<br /> through an annual rebate or through a
<br /> general obligation (0.0.) abatement
<br /> Address bond issued by one of the local govern-
<br /> ments (see chart).
<br /> Based upon our examplcity
<br /> City,State,Zip. • could now rebate up to$22,2 r 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 teased
<br /> II
<br /> up to $45,000 (city plus c The Red and White packages include 10 tickets por-
<br /> tions). Total assistance avails to the
<br /> P 8Includes tickets to the game and the picnic. project, if both the city 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 /> liEkitallettie( ,tt, RYTri' Y` Individual Infield Tickets Other innovative uses exist for abate-
<br /> ,,' " �� meat 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 /> Bjti i
<br /> �
<br /> Packs e�ell tt kergy - 4 affordability in the new homes. A rental
<br /> tit:..
<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 /> Package Total $ could be assisted with abatements from
<br /> 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 /> by MAY 31, 2002,to reserve your CornerHouse Send to: CornerHouse to the end of a TIP district, after it has
<br /> been 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 of porkaprocessieng
<br /> for the development of a
<br /> P y 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.
<br />
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