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ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY <br /> MEMORANDUM <br /> TO: EDA Commissioners <br /> FROM: William Rubin, Executive Direct/4K, <br /> DATE: January 30, 1995 <br /> SUBJECT: Agenda Memo for EDA Workshop <br /> 1. OVERVIEW,OF TIF <br /> A. History - As a way to attract reinvestment into central business <br /> districts (CBD's), a locally-administered "grant" program <br /> became part of Minnesota state law. The program became <br /> known as Tax Increment Financing (TIF) and it operates under <br /> the premise that,a business or a developer receives grant funds <br /> from a city as reimbursement for extraordinary development <br /> 0, costs. These costs may include land acquisition values, <br /> demolition expenses, infrastructure upgrades or expansions, <br /> and pollution abatements, etc. The City recovers its grant <br /> expenses by creating a TIF District around the boundary of the <br /> TIF project. As a result, the city "captures" the new property <br /> taxes (known ,as the tax increments) to recover its expenses <br /> associated with the project. Once the city is repaid, the TIF <br /> District is dissolved and the local taxing jurisdictions (county, <br /> school district, city, etc.) derive the benefit in accordance with <br /> their respective levies. <br /> Over time, TIF gained greater popularity as the availability of <br /> Federal Block Grant Funds grew more scarce. TIF programs <br /> have also changed to include senior housing projects, low- and <br /> moderate-income housing projects, and industrial projects. <br /> B. Elk River Projects - The City of Elk River has established eleven <br /> TIF Districts: <br /> • TIF No. 1 Elk River Plaza Mall (terminates 12/95) <br /> • TIF No. 2 Guardian Angels' Project <br /> • TIF No. 3 - Elk River Plaza Mall Addition <br /> (terminates 12/96) <br /> P.O. Box 490 • 13065 Orono Parkway • Elk River, MN 55330-1743 • (612) 441-7420 • Fax: (612) 441-7425 <br /> Equal Opportunity Housing and Equal Opportunity Employment <br />