10-02-2000 WS - Laserfiche WebLink

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3 I. POLICY PURPOSE The purpose of this policy is to establish the Mounds View Economic Development Authority’s, hereafter referred to as the EDA, position relating to the use of tax abatement financing 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 abatement. The fundamental purpose of tax abatement in Mounds View is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided. The Mounds View EDA is granted the power to utilize tax abatement financing by the Minnesota Tax Abatement Act, as amended. It is the intent of the EDA to provide the minimum tax abatement, as well as other incentives, at the shortest term required for the project to proceed. The EDA 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 tax abatement 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 & TIF The primary difference between Tax Abatement Financing 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 EDA, 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 financing is requested, each political subdivision has the option of granting its portion of the increased taxes to the project. Depending on the position of the respective taxing jurisdictions, the dollars generated by tax abatement have the potential to be less than the dollars generated with TIF. III. OBJECTIVES OF TAX ABATEMENT FINANCING As a matter of adopted policy, the EDA will consider using tax abatement financing to assist private development projects to achieve one or more of the following objectives: • To enhance and diversify the City of Mounds View’s economic base. • To encourage the revitalization and redevelopment of the Highway 10 Corridor. • To encourage additional unsubsidized private development in the area, either directly or indirectly through “spin off” development.