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MEMORANDUM <br />Date: July 23, 2012 <br />To: Mayor and Council <br />From: Mary Alice Divine <br />Re: Economic Development Update <br />Introduction <br />Mayor and Council requested information regarding the amount of taxes that are generated by different <br />types of development and an update on economic development activities to attract additional <br />commercial /industrial development and housing. The following outlines the current tax forfeit status of <br />the Legacy properties, recent staff activity, and revenues generated from a variety of development. The <br />question was raised about the disparity between Blaine and Lino Lakes housing growth, so included is a <br />comparison of housing growth in the two cities dating back to 2000. <br />Tax Forfeit process: <br />After Hartford Group let the Legacy properties go into foreclosure, the bank servicing the loan on the <br />properties closed and taxes and assessments went unpaid. A group of investors who had participated in <br />the development loan had three years to redeem the properties by paying off back taxes, assessments, <br />penalties and interest, but failed to do so. The redemption period ended July 2011 and the properties went <br />tax forfeit. Tax forfeit properties are owned by the state, but their maintenance and sale are administered <br />by the counties. The county assessor sets the value of the parcels. <br />Staff and legal counsel met with Anoka County officials on several occasions to discuss the future of the <br />Legacy parcels. Anoka County has indicated it would not put Legacy properties up for sale in the near <br />future because it is unlikely a sale would occur. Once a property is tax forfeit, City has a right at any time <br />before a sale to request that it be held from public sale for a period of six months and the city can <br />purchase it within that time frame. If the City finds a developer, it could use a turn-key approach to <br />purchase the property and turn it around to sell to a developer. <br />If parcels of forfeited land in Anoka County are sold, the County determines its annual expenditures for <br />administering tax forfeit property and subtracts that amount from the gross receipts from all tax forfeit <br />property for that year. The annual expenditures are prorated to the parcels based on the receipts for that <br />year. These expenses average $100,000 per year. At worst case, if a Legacy parcel was the only parcel to <br />