02/03/2022 EDAC Packet - Laserfiche WebLink

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Financial Assistance Policy Page 2 I. POLICY PURPOSE The purpose of this policy is to establish the City of Lino Lakes’ position relating to the use of financial assistance programs, for private development above and beyond the requirements and limitations set forth by State Law. This policy shall be used as a guide in the processing and review of applications requesting tax increment financing or tax abatement assistance. The fundamental purpose of financial assistance programs in the City of Lino Lakes is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided. The City of Lino Lakes is granted the power to utilize Tax Increment Financing and Tax Abatement by the Minnesota Statute. It is the intent of the City to provide the minimum amount of financial assistance, as well as other incentives, at the shortest term required for the project to proceed. The City reserves the right to approve or reject projects on a case by case basis, taking into consideration established policies, project criteria, and demand on city services in relation to the potential benefits from the project. Meeting policy criteria does not guarantee the award of financial assistance to the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. II. DIFFERENCE BETWEEN TAX ABATEMENT & TAX INCREMENT FINANCING The primary difference between Tax Abatement and Tax Increment Financing (TIF) is the way in which the dollars are awarded to the project. When TIF is awarded to a project by the city, the other political subdivisions (the school district and the county) are required to contribute their portion of the increased taxes to the project. Conversely, when Tax Abatement is requested, each political subdivision has the option of granting its portion of the increased taxes to the project. Subsequently, the dollars generated for the project with Tax Abatement are generally less than the dollars generated with TIF. III. OBJECTIVES OF FINANCIAL ASSISTANCE As a matter of adopted policy, the City will consider using Tax Increment or Tax Abatement to assist private development projects to achieve one or more of the following objectives: • To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits. • To enhance and diversify the City of Lino Lakes’ economic base. • To facilitate the development process and to achieve development on sites which would not be developed without financial assistance. • To remove blight and/or encourage redevelopment of commercial and industrial areas in the city that result in high-quality redevelopment and private reinvestment. • To offset increased costs of redevelopment (i.e., contaminated site clean up) over and above the costs normally incurred in development.