12-02-97 Council Special Minutes (2)

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MINUTES CITY COUNCIL DECEMBER 2, 1997 Fahey summarized the process the City undertook in creating its redevelopment guide. This process included nei~hborhood meetings and public input. The citizens of Little Canada decided that they did not want gas stations/convenience stores up and down Rice Street, and that this kind of use was not good for lon~-term development. Fahey agreed there is some risk involved in redevelopment. Fahey pointed out that the City is using Tax Increment Financing to write down the cost of land to make redevelopment attractive to developers. However, the City is not willing to pay more for land than it is worth. If the City has a willing seller, the purchase price is based on the appraised value of the property. Fahey pointed out that the redevelopment of the Rice Street area has not happened in the market place. The City has not had quality development occur along Rice Street in the past 20 years. Therefore, the City has taken some bold steps with some risk on a short-term basis for a long-term benefit. Fahey indicated that he has been frustrated, however, because redevelopment has not moved fast enou~h. The City Administrator pointed out that a voluntary sale to the City results in cost savings given that the City is not required to pay relocation costs or the costs of eminent domain proceedings. With regard to Mr. Gagne's comments about the additional $80 in costs bein~ paid by a family of four, the Administrator felt that figure was overstated. The City's share of the tax bill is 14% with the majority of the balance paid by the School District and Ramsey County. Taking property offthe tax rolls does reduce the amount of tax base over which the tax bill is spread, but not to the extent mentioned by Mr. Gagne. The other jurisdictions share in that reduction based on their proportionate share of taxes. Therefore, Little Canada residents do not bear the entire burden. Fahey indicated that the Council is sensitive to the concerns raised this evening. The City has been careful how it spends tax dollars. Fahey also indicated that as far as redevelopment goes, there are some projects that may not receive City approval. Another factor is that the City will not pay an inflated price for property that is needed for the redevelopment project. Fahey indicated that there are property owners who may think the City is willing to pay anything for a piece of property in order to get a redevelopment project. Fahey indicated that he would not support anything more than the appraised value of a property unless there is a good reason to do otherwise. Gagne pointed out that the City paid $250,000 for one acre of land. 7