07-20-10 EDC Meeting - Laserfiche WebLink

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III. THE ASSISTANCE TOOLBOX The general theory behind government involvement in land development, redevelopment, or business expansion is to provide additional resources to a development that will result in unique amenities or meet a stated public policy or goal. The end result is a public benefit that would not be obtained without government involvement. When considering development,redevelopment, or business expansion proposals that request some level of government participation in the form of assistance or facilitation,the City of Eagan will evaluate to what extent the proposal meets the Economic Development Goals discussed in Section II. Due to limited dollars,the City will have to choose projects and the level of investment wisely, based on an economic development strategy specific to the community's situation,priorities and resources. The strategy is to be a dynamic guide that responds to changing community, economic,business and physical needs. Should the proposal meet the aforementioned goals and priorities,the City will actively work with the requesting business/developer to evaluate the development assistance tools available for their applicability and eligibility. Economic development tools change and evolve as new regulations or programs are enacted, regulations are revised, funds become available and agencies and businesses explore new creative ways to make development happen. Following are some of the more common economic development tools currently used by local and State government to assist businesses. 1. Tax Increment Financing (TIF)—This is a method to fund public investments in a specific area with the increased tax revenue ("tax increment")that results from the new development in that area. The "tax increment"is the property tax revenue increase generated from the district after new development as compared to the before development tax generation. Creation of a tax increment district allows cities to capture all or a portion of the "tax increment"and to use those funds toward development within the district. Tax increment districts are established for a specific area and specific duration. There are two basic types of TIF districts; Economic Development TIF districts are intended to foster development that results in significant job creation, and Redevelopment TIF districts which are intended to eliminate blighted conditions and result in better utilization of land. Tax increment financing has been a controversial tool for local governments since its popularization in the 1970's. Since that time, TIF has come under increasing scrutiny and regulation. The City of Eagan has used TIF infrequently. Strict requirements to meet a"but- for"test have limited its applicability in Eagan. The Eagan Economic Development Commission has identified four types of development that will be given priority for the purpose of endorsing the use of Tax Increment Financing. These projects, in no particular order, are: IkA \