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r c+ DORSEY & WHITNEY • A Pws ERSH,P INC-INO Pa "85—"CON—ION- C,50 PARK AVENUE 2200 FIRST BANK PLACE EAST 3.10 FIRST NATIONAL BANK BUILDING NEW TORN,NEW YORK 10022 ROCHESTER,MINNESOTA 53903 (PJ2)415-980-0 MIN\EAPOLIS, MINNESOTA 33402 (507)288-3156 1330 CONNECTICUT AVENUE.N.W. (612) 340-2600 315 FIRST NATIONAL BANK BUILDINo WABHDWOTON,D.C.20036 TELEX 29-0605 WAYZATA,M INNESOTA 55391 (202)857-0700 FAX(612)340-2968 (612)475-0373 3 ORACECRURCH STREET 1200 FIRST INTERSTATE CENTER LONDON EC3V OAT,ENGLAND BILLINGS,MONTANA 59103 01-929-3334 (406)252-3800 36,RUE TRONCHET JEROME P.GIIa IGAN 201 DAVIDSON BUILDING 75009 PARIS,PRANCE (612)340-29= GREAT PALLS,MONTANA 59401 01-42-66-59-49 (406)727-3632 PAR EAST FINANCE CENTER 127 EAST FRONT STREET HOMO EONO MIS60LLA,MONTANA 59802 852-5-8612555 (406)721-6025 _ Pane 12, 1990 Mr. Thomas D. Burt City Manager City of St. Anthony 3301 Silver Lake Road St. Anthony, Minnesota 55418-1699 Re: Redevelopment of Clark Gas Station Site • Dear Mr. Burt: Bill Soth has asked me to respond to your May 9th letter concerning the proposed redevelopment of the old Clark gas station site at the corner of Stinson Boulevard and 33rd Avenue N.E. As you are aware, the Minnesota Legislature at its 1990 session enacted additional restrictions on tax increment financing. The major restrictions apply to districts for which the request for certification of the original tax capacity of the district was filed with the county after April 30, 1990. The most significant restriction enacted by the Legislature is a reduction in state aid for cities that establish new tax increment districts after April 30, 1990. This reduction in state aid imposes a direct cost on a city and its taxpayers for a new tax increment district. Generally, the amount of state aid reduction is equal to the amount by which State paid school aids would be reduced if the tax capacity captured by the tax increment district were available to the school district. The state aid reduction will be subtracted from the city's local government aid, and if the amount of state aid reduction is larger than the amount of local government aid the city is to receive, the remaining amount will be subtracted from the city's homestead and agricultural credit aid. While the amount of aid reduction t will vary city by city, I understand that generally the aid reduction will be equal to 30- 40% of the amount of tax increment generated by the district.