03-27-2002 Council Agenda - Laserfiche WebLink

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Functional Analysis March 21, 2002 Page 10 Crossings: • Tax abatement can be used throughout the planning area. None of the improved property or substandard building tests that govern TIP apply to abatement. • Abatement has far simpler requirements to use and manage. • Abatement can he applied to both new and existing values. Abatement will not suffer a loss of revenue from base value as in a TIP district. Special Districts State Law authorizes cities to create two types of special taxing districts to finance improvements: a special service district and a housing improvement area. Both tools levy "taxes" across specified parcels to pay for defined improvements. The application of special districts to Rice Street Crossing includes: • The mixed use nature of the project requires the use of both tools. A special service district applies only to commercial and industrial property. A housing improvement area covers only owner - occupied housing. • The districts do not bring new money to the project. The districts create a vehicle to borrow funds and spread the private costs over time at a lower interest rate. • The district "tax" can resemble a property tax or can be modified to fit other factors. • The district approach fits area -wide improvements, such as parking and storm water management, better than traditional special assessments. • The creation of special districts are subject to a unique process. Cities cannot initiate the process without a qualifying petition from affected property owners. This requirement makes the use of special districts a matter to coordinate with land acquisition and development projects. Timing A clear understanding of the timing of events is essential to redevelopment of Rice Street Crossings. The timing implications of redevelopment include the following: • The County road improvement projects are scheduled for 2004. Decisions about intersections need to be made quickly to allow for the acquisition of right -of -way and the creation of funding plans.