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EDC Minutes August 24, 2011 Page 3 of 4 • depends on the type of district and total eligible TIF costs, but there is a maximum duration of around twenty-six years. Community Development Director Hutmacher summarized Staff,s findings that the City currently has 3.73% of its tax capacity captured by TIF districts, which will increase to 5% once Presbyterian Homes moves forward. Arden Hills is unique since 50% of the City's total tax capacity is from Commercial/Industrial (C/1) properties, which is very high compared to most cities in the metro. Only Fridley and Bloomington have similar proportions of tax capacity from C/I properties. Chair von Holtum asked if the proposed stadium could affect these numbers. Councilmember Holden and Community Development Director Hutmacher explained that the stadium would be tax-exempt but the 170-acre section of the property that is proposed to be privately developed would be taxable. If anything, the City's total tax capacity could increase. Community Development Director Hutmacher went over reasons that C/I properties are beneficial to cities. These developments provide jobs and their higher tax capacity relieves the burden on residential property owners. Staff would like direction as to whether to recommend to the City Council that the City's TIF-captured tax capacity benchmark match the state average or comparable cities. The EDC was provided with a spreadsheet listing Twin Cities municipalities with populations between 2,000 and 35,000 and percentages of C/I tax capacity and TIF- captured tax capacity. Among cities with percentages of C/I tax capacity above 35%, the median • TIF-captured tax capacity is approximately 9%. City Administrator Klaers checked the list and verified that Roseville was missing from the list and should be added. Chair von Holtum asked for Councilmember Holden's view on setting the TIF-captured tax capacity benchmark, to which she replied that the EDC should consider the reasons we give TIF, not the amount we give. For example, TIF could be used to encourage development in the B-2 district. The City does not need to use TIF for business attraction, since the City already has low vacancy rates and significant commercial development. Also, although the City seldom uses TIF, that has not hindered commercial development. Commissioner Huninghake agreed with Councilmember Holden that we should not give businesses a tax advantage. In response to a question on the significance of the City having 50% of its tax capacity generated by C/I development, Community Development Director Hutmacher explained that Arden Hills not only has significant commercial development, but the City also has large areas of tax-exempt land such as lakes, colleges, parks, and TCAAP as well as very low-density residential neighborhoods. The City's proportion of commercial tax base is high in comparison to its relatively low residential tax base. Councilmember Holden suggested that the TIF-captured tax capacity benchmark may provide a reason for approving or denying TIF. TIF may not make or break a project, but the City can help make it more affordable and attractive to develop in Arden Hills. Presbyterian Homes received about $1.l million in TIF but the City is getting a lot back in return, such as sewer repairs and the triangle parcel.