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DORSEY BC WHITNEY <br /> Page-2- • <br /> Mr. Thomas D. Burt <br /> June 12, 1990 <br /> The state aid reduction is effective immediately for economic <br /> development and soils conditions tax increment districts and is phased in beginning <br /> five years after the date of certification of the original tax capacity for all other types <br /> of tax increment districts. For redevelopment districts it is phased in over the 6th <br /> through 21st year of the district at 6.25% per year (which results in the full reduction <br /> being in effect after 21 years). <br /> Additional restrictions enacted by the Legislature at its 1990 session <br /> include further limitations on the creation of economic development districts and <br /> redevelopment districts, and the reclassification of the "obsolence" test for the <br /> creation of redevelopment districts to a new type of district called "Renewal and <br /> Renovation Districts" which have a 15 year durational life (as opposed to 25 years <br /> for redevelopment districts) and a faster phase in of the state aid reduction (12.5% <br /> per year from the 6th through 13th year of the district). <br /> With respect to the Clark gas station site it will be possible to qualify • <br /> such site as a redevelopment tax increment district (which is the most favorable type <br /> of tax increment district) if it can be found that the gas station is "structurally <br /> substandard" to a degree requiring substantial renovation or clearance. It might also <br /> be able to qualify the district as another type of district depending on the proposed <br /> reuse of the site. Under the tax increment financing act "structurally substandard" is <br /> defined as follows: <br /> "containing defects in structural elements or a <br /> combination of deficiencies in essential utilities and <br /> facilities, light and ventilation, fire protection including <br /> adequate egress, layout and condition of interior partitions <br /> or similar factors, which defects or deficiencies are of <br /> sufficient total significance to justify substantial <br /> renovation or clearance." <br /> In addition, the 1990 tax increment legislation provides that a building <br /> is not structurally substandard if it is in compliance with the building code <br /> applicable to new buildings or could be modified to satisfy the building code at a cost <br /> of less than 15% of the cost of constructing a new structure of the same square <br /> • <br />