7.4. EDSR 12-21-2020 - Laserfiche WebLink

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SUMMARY OF RESEARCH AND RECOMMENDED STRATEGIES EDA STRATEGIC PLAN 24 10. INCENTIVES FOR REDEVELOPMENT Redevelopment projects will typically require public sector financial support in all but the strongest market locations. This financial support is offset by the benefits that developments bring to local communities. They may provide housing formats that are needed, or add ground floor retail businesses. They may contribute activity and streetlife, remediate a site that was past its prime, and meet other identified public goals. They are generally speaking also beneficial in the long run from a public financial perspective— providing years of additional property tax revenues after the incentive amount has been recouped. The general need for and appropriate use of incentives for redevelopment was reinforced in our peer city interviews. Public financial support was required for most if not all redevelopment in Oakdale, Forest Lake and Chaska. Public financial support was also required for most new multifamily housing development. In Minnesota, the predominant form of financial subsidy for such projects is tax increment financing (TIF) where that is viable. TIF has two important benefits. First, it doesn’t come at the expense of other city budget items. It consists entirely of future property tax revenues, which are returned to the developer or developer’s lender for a certain number of years. Second, the City’s share of foregone property tax revenues are matched by the contribution of county and school district property tax revenues. That is a differentiator in comparison to tax abatement, because City tax abatement actions are only matched by the county and school district if they also explicitly take that action. The concern about over-enriching a developer by awarding TIF financing can be mitigated by having the TIF request analyzed by the City’s financial advisor. Strategies/Actions 10a. Update the City's tax increment financing policy statements to support its use for any redevelopment project, housing project, or mixed use project that is consistent with City plans and policies 10b. Utilize the City's financial advisor to ensure that tax increment financing is scaled to the genuine needs of the project