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1 <br />1 <br />SPECIAL JOINT MEETIN <br />10, 1985 <br />Page Two <br />Tax increment financing is a means of financing to assemble <br />land to prepare it for commercial /industrial activity. <br />Financing can apply to land, roads, soil corrections and <br />utilities, but not to buildings. The City legally would <br />have to be able to honestly state that the business would <br />not locate within its boundaries without the tax increment <br />financing. For tax purposes, the City would freeze the <br />undeveloped assessed valuation, and then sell bonds to help <br />pay for the development. Taxes received for the developed <br />business - less the taxes due on assessed valuation before <br />development - go directly to the City as a means of repaying <br />bond debts. Taxes due on the assessed valuation before <br />development would go to the County and be dispersed in the <br />usual fashion. <br />The benefit to the citizens in the City would be - the busi- <br />ness operating within the City; the jobs the business would <br />provide; and (after repayment of bond debts) higher taxes <br />collected on the developed business. <br />Mr. Karth explained that this discussion was prompted by the <br />Economic Development Committee because several interested parties <br />have asked about opportunities in Lino Lakes. Mr. Karth feels <br />that the surrounding communities' businesses are beginning to <br />spill over into Lino Lakes. The surrounding communities have <br />tax increment financing programs. New businesses looking for <br />opportunities in Lino Lakes find that they must take the high <br />financial risk of developing from the ground up because there <br />are no existing commercial areas from which to rent. <br />Mr. Wilson mentioned that the media occassionally attempts to <br />create a bad image of tax increment financing. Most often citi- <br />zens do not understand the process and Mr. Wilson felt that the <br />City leaders should clearly understand and become involved. A <br />tax increment financing program can be put into place without <br />the City leaders' involvement, which will be less costly and <br />quicker; however, he encourages City leaders' involvement. <br />Mayor Benson reminded the group that the City has not begun a <br />tax increment financing program or made any steps in that direc- <br />tion to this point. The purpose of this meeting was to introduce <br />the idea to those in attendance and get any feedback. <br />Mr. Wilson thanked the group for the opportunity to introduce tax <br />increment financing to the City. <br />PARK AND PUBLIC LAND DEDICATION <br />Since this concern was raised by the Planning and Zoning Board, Mayor <br />Benson gave the floor to Mr. McLean, Chairman of the Planning and <br />Zoning Board. <br />051 <br />