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CITY OF LINO LAKES <br />ECONOMIC DEVELOPMENT AUTHORITY <br />MINUTES <br />DATE: Monday, June 8, 1998 <br />MEMBERS <br />PRESENT: J. Bergeson„ C. Lyden, A. Neal, C. Dahl, K. Sullivan <br />MEMBERS <br />ABSENT: None <br />OTHERS <br />PRESENT: Brian Wessel, Ron Batty, Mary Divine, Fritz Johnson <br />CONSIDERATION OF MINUTES <br />EDA Member Neal moved to approve the minutes from the May 26, 1998 EDA meeting. EDA <br />Member Dahl seconded the motion. Motion passed unanimously. <br />INDUSTRIAL INCENTIVES: TAX INCREMENT FINANCING POLICY <br />Mr. Wessel reviewed with the board the city's past Tax Increment Financing (TIF) policy, and the <br />success the city has had providing land and assessments to qualified companies on a combination <br />of upfront and pay -as- you -go basis. The districts have aged and diminished in capacity, and the <br />city is no longer able to provide a subsidy in the range of 16 %, which usually covers land and <br />assessments based on 10,000 square feet of building per acre. Other factors have produced a slow <br />down in industrial development, including competition and less accessible or desirable land. Mr. <br />Wessel requested that the board consider revitalizing the TIF program by allowing the creation of <br />new TIF districts, when appropriate, within Apollo Business Park, Lakes Business Park and <br />Clearwater Creek Development Center. <br />Mr. Batty explained the 2 -year lag time between a building getting built and starting to pay taxes. <br />He informed the board that within the last two years the legislature had lowered the C/I tax rate, <br />but the city was protected from a possible lack of increment due to lower taxes through its use of <br />pay -as- you -go. This means if there is not enough increment to meet the obligation, the business <br />doesn't get it. The city is not obligated. Also, the city has never bonded for TIF projects. <br />The legislature also loosened the Green Acres clause, and now manufacturing and distribution <br />facilities can be built on former Green Acres parcels without penalty, but 90% of the jobs must be <br />at 160% of minimum wage. He also explained that the city could now create an new district <br />where an old one was without the historic rate of inflation on the land being a detriment, since the <br />city does not have to include the value of new public improvements into determining the inflation <br />on the property. <br />Mr. Lyden asked if TIF was meant to "start the fire" for industrial development, and that has been <br />done in Lino Lakes, why keep using TIF? Mr. Batty said that was the policy question for the city <br />