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<br />SUMMARY OF RESEARCH AND RECOMMENDED STRATEGIES <br />EDA STRATEGIC PLAN 39 <br />10. INCENTIVES FOR REDEVELOPMENT <br />Redevelopment projects will typically require public sector financial support in all but the <br />strongest market locations. This financial support is offset by the benefits that <br />developments bring to local communities. They may provide housing formats that are <br />needed, or add ground floor retail businesses. They may contribute activity and <br />streetlife, remediate a site that was past its prime, and meet other identified public goals. <br />They are generally speaking also beneficial in the long run from a public financial <br />perspective—providing years of additional property tax revenues after the incentive <br />amount has been recouped. <br />The general need for and appropriate use of incentives for redevelopment was <br />reinforced in our peer city interviews. Public financial support was required for most if <br />not all redevelopment in Oakdale, Forest Lake and Chaska. Public financial support <br />was also required for most new multifamily housing development. <br />In Minnesota, the predominant form of financial subsidy for such projects is tax <br />increment financing (TIF) where that is viable. TIF has two important benefits. First, it <br />doesn’t come at the expense of other city budget items. It consists entirely of future <br />property tax revenues, which are returned to the developer or developer’s lender for a <br />certain number of years. Second, the City’s share of foregone property tax revenues <br />are matched by the contribution of county and school district property tax revenues. <br />That is a differentiator in comparison to tax abatement, because City tax abatement <br />actions are only matched by the county and school district if they also explicitly take that <br />action. <br />The concern about over-enriching a developer by awarding TIF financing can be <br />mitigated by having the TIF request analyzed by the City’s financial advisor. <br />Strategies/Actions <br />10a. Update the City's tax increment financing policy statements to support its use for <br />any redevelopment project, housing project, or mixed use project that is consistent <br />with City plans and policies <br />10b. Utilize the City's financial advisor to ensure that tax increment financing is scaled <br />to the genuine needs of the project <br />