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~.ti MINUTES REGULAR CITY COUNCIL JIEETING SEPTEf~:'BER 22, 1982 PAGE ~ matter, a tax increment district should not be created until it is known when the improvement will take place so there is an increased tax base. V~'hen a reauest is received for building permits, that is perhaps the time to create the tax increment district. Yunen this is done, it will maximize the amount of tax increments that can be received. Two types of tax increment districts can be created--one type of tax increments can be received from eight to ten years (this is basically what has been discussed) and the second type, which is called a redevelopment district, tax increments can be received for 25 years but because Falcon Heights does not, from all appearances, have any area within this proposed development #1 which would qualify for the redevelopment district and thus 25 years of tax increments. 1 Councilmember Eggert questioned whether the City would be grandfathered if the development district was created now and the state did away with the tax increment financing district? Attorney Swanson replied that the City would not be grandfathered with just the creation of the development district. It would be necessary to go one step further and create a tax increment financing district. During the legislative session, rumbles will be heard about changing the law and if that should happen, the City may want at that time to create the district to be grandfathered in and run the risk that the development will come in and i.f the development does not occur, i.t does not happen. Nothing is lost. More would be lost iyf an attempt was made to create the tax increment district now but try later to capture any increases in value. °UBLIC HEARING (CONT'D) EGGERT~ SP~~ANSON Neal Johnson agreed with Attorney Swanson as far as the creation of the HEAL JOHNSGN~ tax increment district was concerned. Basically, what is established is SV~`ANSON the general plan for what is going to be done. The tax increment financing part is a specific financing plan for the particular parcel or parcels. Councilmember Eggert asked when the development district is authorized now and when subsequently the tax increment district is authorized, does the same area have to be encompassed? N,r. Johnson advised that only a portion could be included. Councilmember Eggert asked why the Tatum Lindig area was included when the area was excluded from the project at previous hearings. Councilmember Larson advised that because there was a potential in the future for doing Tatum~Lindig it was included in the plan so that portion could be finalized and at some future date if it was decided to include it, it could be included with the necessary hearings. Attorney Swanson advised that once a district is set up, it can be enlarged upon. The key to acting now in creating the district is that when bonds are issued shortly to finance improvements within this district and ir, order t o use tax increments, which may eventually be derived from this development district, a development plan is needed pursuant to which the improvements are made. It is a mat+.,er of timing. If the development district is not adopted until after the improvements EGGERT~ JOHNSON CARSON SV',-`ANSON