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a. Revision of Plan. First, revenues derived from <br />tax increments may be used only in accordance with a tax <br />increment financing plan. This means, at a minimum, that <br />existing development programs and tax increment financing <br />plans may have to be revised to provide for use of tax <br />increment by an Authority for the purposes contemplated <br />by the Authority. <br />b. Limitation on Use of Tax Increment. Further, <br />revenues derived from such tax increments may only be <br />used by an economic development authority to finance or <br />otherwise pay costs specifically listed in 5469.176, <br />subd. 4, which include: <br />(i) The "capital and administrative costs" <br />for projects undertaken in a "development district" <br />created pursuant to the City Development District <br />law. Tax increments derived from any existing tax <br />increment districts created by the City would be <br />subject to such a limitation. Unless the EDA could <br />reconstitute the development district as a <br />"redevelopment project area" under HRA law, <br />limitation of the use of tax increments to the <br />payment of "capital costs" would permit use of tax <br />increments to acquire a limited partnership <br />( "equity ") interest in a company only if the money <br />paid for the partnership interest were spent on a <br />"capital cost" of the project. Hence, the tax <br />increments could not be used to fund working capital <br />loans, whether or not funded directly or through an <br />"equity" investment. <br />(ii) The "cost of redevelopment" for projects <br />undertaken in an "economic development district" <br />pursuant to the EDA law. The EDA law defines "cost <br />of redevelopment" to mean acquiring property, <br />demolishing or removing structures on acquired <br />property, correcting soil deficiencies on acquired <br />property, construction or installing public <br />improvements, providing relocation benefits to <br />occupants of acquired properties, planning, <br />engineering, legal and other services necessary to <br />carry out the above, and the allocated administra- <br />tive expenses of the authority for the project. <br />Clearly such costs do not include working capital <br />loans, nor, for that matter, the cost of construct- <br />ing or equipping a building. Furthermore, such <br />21 <br />Page 23 <br />