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<br />kAAR 23' 89 8 ol 4i2
<br />III e525 EDINBROOK RAGE 05
<br />Summary of 'Tax IncreIrntat. Fmancw*& Bill,
<br />Much 31, 1989
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<br />contaminatcd sewage lagoons to qualify. The percentage tests must be meet on the basis olf arcil, rat tier than
<br />SIMple parcel counts. The reqmirernent that 20 percent of the bulldinp be substandard is inericasied io 3,0, picrccnt
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<br />in the secnind blight test.
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<br />Buildings are riot structurally substandard if they are in com,ptiance with the building code for, new il)luildings or
<br />Can bc broulght i I n,to compllianct at less than half the cost of construcill a new building. Parcels arc not
<br />considicrod to be occupied by buildings and structures, unless, 25 percent, of the land arms its accupicd. Euch Orca
<br />of a non-cont iguous district, as well as the entire district, must satisfy one of the redcvc1opment icsts.
<br />Duratloin Limi'LL The bill reduces the maximum, duration of redcvclopmcn1,1 housing,, mined underatround 5plauct
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<br />and, hazardous substance sites from 25 to 20 years. Hazardous, substancc site districts will col ntinuc� to 1 allowed,
<br />longer durationro, to the extent nom y to pay the clean sup costs,
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<br />taro O Plr —%oaftl 7101 bid' requires revenues from redevelopment districts to be used to correct the
<br />Conditions that, qualified the. arlea as a, redevelopment district. Tle principal, use of thrsc funds %"'11 be for
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<br />acquiring and preparing sites that contailln, substandard buildings that must be demolished at public COM in, make
<br />these site compelitive., with blare land sitcs in undicireloW arcas.
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<br />Qualifying CrIlit". The 1988 enactment of special hazardous substance districts for polititad silics makcs ti
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<br />s�pec�ial', redevelopment definitilon, for ploiluted industrial parks obsolete,. There is flatic,, it any, jt1fifiMIC3,6011 tar
<br />redeveJopment designation of air rights over public streets and roads, unless the surrounding ;irwi is blightedo
<br />The use of parcel counts,, rather than area, can lead to distortions in mealturin'g bili�sht, A smal'l pe-ircel contaitning
<br />a d1liapidated b,uU,d,mp is even the same wr-'ight as, vacant lot that is two or thme times the, size. To clims'nill
<br />this distortion, the bill, requires, area, to be used in mean blight. Sunuari I '
<br />ly� present l,aw� treats a large parcel
<br />"th only a, simiall building or structure as being occupied by improvements, even though, it may be moire like a
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<br />vacant site. To eliminate this Potential distortion,,, a requirement that, at least,, 2S Percent of the S*119 MU.St
<br />contain a structure, is added.l
<br />In the Senate, hearlings, e,vi'drnce was prcscnttd that cities have determincid bulldlng3 to bc%Uh%1Rndart1 lxciausc
<br />they are root adaptable to the plans of'& developer for a, site, even though the buildings wc,rc r0ativuly ncw, wcre
<br />in good ciondition, and were biting usca for c5scIritially, the sami; function ('retail or commercial). This is not the
<br />type, of blight that tax increment financ=g was intended to address, Redovc1opmunt districts, werc iniundcd to
<br />permit clearing of buildings that are substandard in, the sense of physiml deteriorlation, inconsistent u�sc patterns,
<br />and other similar conditions,
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<br />The, use of nonacontigullous, dhstricts permits 'inclusion of distant unbli,ghted parcels in a ricdicvIclopment drstrICL
<br />if aniough other blighted Parcels, are also included. Dot'ng so, allows the city to either col,icct incrcmunt, from thme
<br />unblightt4i parcels whc,rc the dcvelopment was not stimulated by the usr, of TIF or 1E) VXpend imiremuni%. %Oicre
<br />there is no need, to correct blight. Requiring each non-contiguous area to mccill a, redevt llopment. district. test
<br />rieduces N5 possibility.
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<br />Duratiac Limit& Most citles already establish only districts With projected livI oif 20 year.% or less. Thig coninion
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<br />practice. refleds, the reality, that if tax base expansion is, the primary motivation for use of T11F, -impirinillunicnis
<br />typically mill depireciate, substantially, over 25 years and 140c� basic cxpeinsion will occur %vhrn ilia, district u. do-
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<br />certified. Furthermore, it is difficult to expect an expanded tax base to play back, on a, pirlesent h4isis, thic
<br />subsidies granted if the tv base only, 1>cimtts available, 25 years later.
<br />Use Of, Pr Ado Under present law, redeveloprimcni districts can be established and aill, or, a sulisiamial part
<br />of the activities financed may relate to portions of the district or pr Ject area) that are not blightcd. A hr,
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<br />increment. revenues may be used for purposes othor than correciNting the conditions, that oisticn.whoely "I'liried
<br />creating a redevoloputc-nt distri-CA, The amicndmcmis to the act require the revenues to be uscid to factually, currect
<br />these wnditions.
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