03-27-2002 Council Agenda - Laserfiche WebLink

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Functional Analysis March 21, 2002 Page 5 1. Price. The cost of acquisition is the key variable in the analysis. The County wishes to receive the best possible price for the property. From an overall project perspective, the more money used to acquire this site, the less money available to pay for other redevelopment costs. 2. Demolition and clearance. It is likely that these costs will be supported by local funding. The City could pay these costs after acquisition or pay an increased price to offset County actions. 3. Environmental remediation. Redevelopment of this type of property must be approached with the expectation of remediation expense. Testing is required to determine the nature of environmental problems (if any) and the estimated correction costs. The approach to remediation must be given careful consideration. The actual extent of the problems and the correction costs cannot be known until work begins. The County cannot sell this property without a plan to manage this risk. Other Property Three factors will influence the strategies for acquiring other parcels: 1. Road design. If the Owasso Boulevard and County Road E intersections are realigned (as discussed earlier), then these projects create the opportunity to acquire development sites in conjunction with right-of-way acquisition. If Owasso Boulevard remains at its current Location, the adjacent Minnesota Building Trades Federal Credit Union should be acquired and added to the County site. 2. Opportunity. Parcels can be acquired and offered for sale. 3. Development project. Land acquisition often waits for an actual development proposal. Finance Tools The previous sections discuss the public actions needed to undertake redevelopment in Rice Street Crossings. Many of these actions require local funding. The focus now turns to the means of financing these actions. Tax Increment Financing Tax increment financing (TIF) is the most powerful finance tool available for redevelopment. In basic terms, TIF captures the property tax revenues from new development and uses the revenues to pay for public actions needed to induce the development. While the concept is simple, the actual use of TIP is governed by complex and changeable State Laws. General Limitations Regardless of the type of TIF district, several general limitations will affect the use of tax increment financing.