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CITY OF PEQUOT LAKES —TIF DISTRICT NO. 2 -2
<br />limitations unless the Authority elects under certain circumstances to extend the duration of TIF District in order
<br />to recover eligible pollution cleanup costs incurred by the City (see M.S. Section 469.176, Subd.1 g for details).
<br />Section 17 Use of Tax Increments — Economic Development Districts
<br />Revenue derived from tax increment from an economic development district must be used to provide
<br />improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form to developments
<br />consisting of buildings and ancillary facilities, in which at least 85 percent of the buildings and facilities (determined
<br />on the basis of square footage) are used for any of the following purposes:
<br />1. the manufacturing or production of tangible personal property, including processing resulting in the
<br />change in condition of the property;
<br />2. warehousing, storage, and distribution of tangible personal property, excluding retail sales;
<br />3. research and development related to the activities listed in clause (1) or (2);
<br />4. telemarketing if that activity is the exclusive use of the property;
<br />5. tourism facilities;
<br />6. qualified border retail facilities; or
<br />7. space necessary for and related to the activities listed in clauses (1) to (6).
<br />If the City has a population of 5,000 or less and is located ten miles or more from a City having a population of
<br />10,000 or more (a "Small City), revenues derived from tax increment from an economic development district may
<br />be used to provide improvements, loans, subsidies, grants, interest rate subsidies, or assistance in any form for
<br />up to 15,000 square feet of any separately owned commercial facility. These revenues may also be used If the
<br />revenues derived from increments are spent only to assist the facility directly or for administrative expenses, the
<br />assistance is necessary to develop the facility, and all of the increments, except those for administrative expenses,
<br />are spent only for activities within the district.
<br />With the square footage of the hotel exceeding the threshold for the Small City definition, the City will use
<br />Minnesota Statute 469.174, Subd 22, designating this hotel as a 'Tourism Facility". For the hotel project to be
<br />designated as an economic development TIF district, by statute, 'Tourism facility" means property that:
<br />1. Is located in a county where the median income is no more than 85 percent of the state median income.
<br />In 2021, the median household income of Crow Wing County households was $60,810. According to
<br />the Census data, state median income for the State of MN is 77,706. Based on this information, the
<br />County is 78% of the state's median income. (County information htt s: / /ww_ w_.minnesota-
<br />demograpn ics.com /crow - wing - county- aemographics)
<br />2. Is located in a county in development region 1, 2, 3, 4, 5, or 7E, as defined in section 462.385;
<br />City of Pequot Lakes is located in Region 5.
<br />3. Is not located in a city with a population in excess of 20,000.
<br />Census information for the City's population notes 2,440 (City information link https://www.minnesota-
<br />demographics.com/peguot- lakes- demographics)
<br />4. Is acquired, constructed, or rehabilitated for use as a convention and meeting facility that is privately
<br />owned, marina, hotel, motel, lodging facility, or non - homestead dwelling unit that in each case is intended
<br />to serve primarily individuals from outside the county.
<br />TIF is being used to support the construction of a three -story, 69 room hotel.
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