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BRIGGS AND MORGAN <br />ECONOMIC DEVELOPMENT AUTHORITIES <br />Responding to the requests of many Minnesota cities for <br />broader powers in the area of economic development, in 1986 <br />the Minnesota Legislature passed a law authorizing home rule <br />charter or statutory cities to establish economic development <br />authorities. In 1987, the Legislature recodified the statutes <br />pertaining to economic development into one large chapter, <br />Chapter 469. Economic Development Authorities may draw on the <br />purposes and powers contained in several different sections of <br />Chapter 469. Sections 469.091 to 469.108 constitute the <br />principal body of legislation pertinent to EDAs. <br />This memo . addresses many of the questions cities have <br />raised concerning the formation, uses, and powers of economic <br />development authorities (referred to herein as an "EDA" or an <br />"Authority "). The statutes concerning EDAs are complicated <br />and somewhat ambiguous, and the various "cross- fertilization" <br />provisions used in the EDA sections of Chapter 469, allowing <br />the EDA to exercise powers granted to other entities for a <br />wide variety of purposes, lead to further confusion and <br />uncertainty. Nevertheless, we believe the underlying purpose <br />of the law - the promotion of economic development - is clear <br />and that reasoned conclusions can be drown about the scope and <br />intent of the law. The following is an effort to outline the <br />steps that must be taken to form and operate an EDA, the <br />powers that an EDA may exercise once formed, and the <br />constitutional concerns that may arise in connection with the <br />use of EDA powers. <br />A. FORMATION AND OPERATION OF AN EDA <br />1. Reasons for Forming an EDA. Forming an economic <br />development authority (the "Authority" or "EDA ") will provide <br />a great deal of flexibility to a City to pursue economic <br />development. Economic development authorities may exercise <br />their own powers, the powers of housing and redevelopment <br />authorities, the powers of cities in connection with city <br />development districts and the powers of municipalities or <br />redevelopment agencies in connection with municipal industrial <br />development. The purpose for which these powers may be <br />exercised is expanded to embrace economic development <br />throughout a City and not just in areas which may be deemed to <br />be blighted. The concentration of various economic <br />development powers and purposes in one Authority therefore <br />provides a valuable tool to a City for the promotion and <br />financing of economic development. <br />Page 3 <br />