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I. POLICY PURPOSE <br />The purpose of this policy is to establish the Mounds View Economic <br />Development Authority's, hereafter referred to as the EDA, position relating to <br />the use of tax abatement financing for private development above and beyond <br />the requirements and limitations set forth by State Law. This policy shall be <br />used as a guide in the processing and review of applications requesting tax <br />abatement. The fundamental purpose of tax abatement in Mounds View is to <br />encourage desirable development or redevelopment that would not otherwise <br />occur but for the assistance provided. <br />The Mounds View EDA is granted the power to utilize tax abatement financing <br />by the Minnesota Tax Abatement Act, as amended. It is the intent of the EDA to <br />provide the minimum tax abatement, as well as other incentives, at the shortest <br />term required for the project to proceed. The EDA reserves the right to approve <br />or reject projects on a case by case basis, taking into consideration established <br />policies, project criteria, and demand on city services in relation to the potential <br />benefits from the project. Meeting policy criteria does not guarantee the award <br />of tax abatement to the project. Approval or denial of one project is not intended <br />to set precedent for approval or denial of another project. <br />II. DIFFERENCE BETWEEN TAX ABATEMENT & TIF <br />The primary difference between Tax Abatement Financing and Tax Increment <br />Financing (TIF) is the way in which the dollars are awarded to the project. <br />When TIF is awarded to a project by the EDA, the other political subdivisions <br />(the school district and the county) are required to contribute their portion of the <br />increased taxes to the project. Conversely, when tax abatement financing is <br />requested, each political subdivision has the option of granting its portion of the <br />increased taxes to the project. Depending on the position of the respective taxing <br />J urisdictions, the dollars generated by tax abatement have the potential to be <br />less than the dollars generated with TIF. <br />III. OBJECTIVES OF TAX ABATEMENT FINANCING <br />As a matter of adopted policy, the EDA will consider using tax abatement <br />financing to assist private development projects to achieve one or more of the <br />following objectives: <br />• To enhance and diversify the City of Mounds View's economic base. <br />`< 3 <br />