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district is made up through additional state aid. By contrast, . Require potential abatement recipients to pay for the costs abatement payments are recovered by levying additional of your legal counsel, financial analysis and other expenses. ptoperty taxes spread across the entire school district. As a These expenses should not be absorbed within your result, abatements of school taxes will almost always cause organizations general budget. school district taxes to increase, while TIF has very little impact on school district tax rates. For assistance with any aspects of an abatement, contact Ehlers. Benefits Although abatement lacks the total economic capacity of TIF, it offers some distinct advantages: • Simplicity. The process for the approval and use of abatement is far Tess complex than TIF. • Collaboration. With separate approval authority, the use if abatements encourages collaboration. It requires cities, ivieet Rebecca Kurtz counties and school districts to jointly consider implications of the development project. ebecca Kurtz has joined Ehlers as an Associate Financial • Uses. Abatement fits with projects not well suited to TIF. dvisor specializing in tax increment financing and development projects. She brings a wide range of experience Suggestions with community and economic development projects in a The interest in abatements is growing as more business owners variety of different contexts. and developers become aware of abatements. 'What should you do if you are approached with a request for an abatement? Here Before joining Ehlers, Rebecca worked on business are some basic suggestions: development projects at the Minnesota Department of Trade and Economic Development (DTED). In this position she • Develop a general business subsidy policy, establishing assisted communities with their d._' e!o n,•ent effort and purposes for which your organization may and may not worked with businesses that were expanding or relocating in consider granting financial incentives to businesses the state. • Develop specific criteria and policies for approval of Prior to her position at DTED, Rebecca worked with rural . It is important to consider if and how you will provide this Economic Development (COED). While at GOED she assistance. Does the project meet a "but for" test? Can the assisted small businesses with developing business plans, abatement be targeted to achieve specific types of benefits to identifying sources for financial assistance, and creating the community? Should the use be designed to meet other marketing opportunities. standards? Setting policies and criteria allows you to make best use of this tool, avoid setting unwanted precedents for Rebecca's educational background includes a Bachelor's of future requests and provide consistent criteria against which Science from South Dakota State University. She has been to evaluate requests. certified as an Economic Development Finance Professional by the National Development Council. • Fully analyze the impact of the proposed abatement on property taxes. The impact on school property taxes is Rebecca will serve on Ehlers' TIF Team. She learns the especially complex. School abatements are likely to increase secrets of "the T1F" from the TIF \taster, Sid Inman. When taxes for other taxpayers. Your board or council should asked about the first advice he gave his new apprentice receive complete information before taking an action which Inman replied, "Feel the TIF. It is around you in all will affect property taxes. development." Inman expressed some concern that as a former State employee Rebecca may be susceptible to the • Insist on a development agreement which clearly defines dark side of the TIF. Rebecca dismisses such concerns and the responsibilities of the property owners receiving says "1t is a thrill to learn from a living legend!" abatements. • Hire your own legal counsel to draft and /or review abatement agreements, development agreements and other required legal documents. 3