7.1. EDSR 04-17-2023 - Laserfiche WebLink

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c. The developer shall demonstrate that the project is not financially feasible but-for the use of tax abatement. d. The city will consider the use of Tax Abatement assistance for projects that may not meet the but-for and job creation criteria, but rather would be considered as a “location incentive”. These projects may result in other public benefits such as a significant tax base increase, the creation of higher paying jobs (at least twice the minimum hourly rate stated in the city’s Business Subsidy Policy), and is likely to assist in the marketing and attraction of additional desired developments. Section III of the policy outlines the following objectives for the use of tax abatement: • To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and /or attractive wages and benefits as defined in the City’s Business Subsidy policy • To enhance and diversify the City of Elk River’s economic base • To encourage additional unsubsidized private development in the area, either directly or indirectly through “spin off” development • To facilitate the development process and to achieve development on sites which would not be developed without Tax abatement assistance • To remove blight and/or encourage redevelopment of commercial and industrial areas in the City that result in high quality redevelopment and private reinvestment • To offset increased costs of redevelopment (i.e. contaminated site clean-up) over and above the costs normally incurred in development • To create opportunities for affordable housing • To contribute to the implementation of other public policies, as adopted by the city from time to time, such as promotion of quality urban or architectural design, energy conservation, and decreasing capital and/or operating costs of local government • To significantly increase the City of Elk River’s tax base Any political subdivision, including statutory cities, home rule charter cities, towns, counties, and school districts, is authorized to abate property taxes on selected parcels or defer the payments of the taxes and abate the interest and penalty that otherwise would apply, if: • The benefits gained equal or exceed the cost to the political subdivision or the abatement phases in a property tax increase, and • The abatement is in the public interest because it will: − increases or preserves the tax base; − provides employment opportunities; − provides or helps acquire or construct public facilities; − helps redevelop or renew blighted areas; − helps provide access to services; − finances or provides for public infrastructure; − phase in a property tax increase on the parcel resulting from an increase of 50% or more in one year on the estimated market value of the parcel, other than an increase due to improvement of the parcel; or − stabilize the tax base through equalization of property tax revenues for a specified time period with respect to a taxpayer whose real and personal property is subject to valuation under Minnesota Rules, chapter 8100. Cities, counties, and school districts as combined jurisdictions may grant an abatement for no longer than 15 years (8 year maximum if no initial duration is specified), or for no longer than 20 years if two or fewer jurisdictions participate. No back-to-back abatements. Eight years must pass before a new abatement can be applied. In any given year, the total amount of property taxes abated by a political subdivision for all parcels may not exceed the greater of (1) 10% of the net tax capacity of the political subdivision for the taxes payable year to which the abatement applies, or (2) $200,000. Property in a tax increment financing district is not eligible for abatement.