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Planning Commission Regular Meeting Minutes • January 16, 1996 Page 7 1 Chair Bergstrom inquired what the Planning Commission can do to decrease the residential 2 category of tax. Mr. Larson responded to be very critical of a residential project proposed in a 3 commercial area. 4 5 Chair Bergstrom inquired what would be the optimal split between residential and commercial. 6 Mr. Larson replied it would be half residential and half commercial, but the key with commercial 7 was Apache Plaza being a major contributor. 8 Commissioner Thompson indicated it was important to be kind to business to keep them in St. 9 Anthony. 10 Mr. Larson continued his presentation with an overview of Tax Increment Financing (TIF). Mr. 11 Larson reviewed that when a property is identified at a certain value, that value is frozen at the 12 beginning of the project. He continued that tax money still goes to the City, school and County, 13 but when the project is complete, the increase in valuation is captured by the developer, not the 14 City. He continued that TIF monies pay off the debt and further explained that taxes,are not less, 15 they are merely split. 16 Commissioner Franzese indicated an example of TIF would be Kensington Apartments. Mr. Larson agreed, and continued that the City protects its interests by using the added valuation to 8 pay off the bonds. 19 Chair Bergstrom inquired what the developer's incentive is to do TIF. Mr. Larson responded they 20 receive money to complete their project. 21 Mr. Larson indicated there are currently three TIF districts in Ramsey County; Chandler Nursing 22 Homes, Evergreen Townhomes, and Hellickson. 23 Chair Bergstrom inquired if the TIF projects are assessed like other properties. Mr. Larson 24 responded they were, except the original value stays the same, until it is de-certified. 25 Commissioner Gondorchin inquired if the captured value can increase, it is a benefit to the owner. 26 Mr. Larson responded it was, and St. Anthony HRA is a developer in the three TIF district 27 projects. Commissioner Gondorchin inquired if any increase pays the TIF faster so the monies 28 can be used elsewhere. Mr. Larson responded it can, and currently the monies will be used to 29 fund the new City Hall. 30 Mr. Larson cited that the City was given the City Hall building by the school district, and in turn 31 the district rented the space free of charge for 5 years. Commissioner Franzese indicated the 32 district sold the building to the City for $1.00 when the population was declining. it Commissioner Franzese inquired if the commercial appraised value continues to increase, then 34 taxes should decrease when fiscal disparities and housing is down. Mr. Larson agreed, because