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CHAPTER 15 Walser Anto SalWb7c. i,�. 04� o l7jield, 635 .2d 391 , J' Cities should. u.se extreme care in establishing a TIF district and. should. (Minn. Ct. App. 2001), ajf'd, 644 follow all procedural requirements; otherwise a court may find. the district N.W.2d 425 (Minn. 2002). was not properly established.. In one case, a TIF district was not properly established. where minimal effort was made to ensure the thorough inspection of the properties, inaccurate and. unprecedented. methodology was used. to establish the condition of the buildings, and. the buildings found. structurally substandard. were not reasonably distributed. throughout the district. 07ei7owet17 i,�. 04� o , ffe w In another case, a cause of action for inverse condemnation does not arise Bilglaoi7, .W.2d 821 where a city's involvement with an aqjacent property owner's development (Minn. Ct. App. 2003) consists of establishing a TIF district, entering into a contract with a private developer specifying the size and. value of structures to be built, and. providing for substantial city assistance to facilitate development. Given the complexity of the laws governing the u.se of TIF, cities or HRAs should. not undertake this method. of financing community development prqJects without the advice of an attorney and. professional consultants. 7, Property tax abatemeni Minn. Stat. § § 469. 18 12 to A city may u.se this development tool to segregate some or all of the taxes 4 9.181. or the increase in taxes) it imposes on a parcel of property if the city expects the benefits of the proposed. abatement agreement to at least equal the costs of the proposed. development. The term "abatement" is somewhat misleading, as in most cases the tax is not forgiven; it is paid. normally, but the amount of property tax levied. by the city is used. to pay for the bonds. The city must determine that the agreement is in the public interest because it will increase or preserve tax base, provide employment opportunities, provi 'de or help acquire or construct public facilities, help redevelop or renew bli, hted. areas, or help provide access to services for residents of the city. Property taxes in a TIF district cannot be abated. unless the period. of the abatement will not occur until after the district is decertified.. A resolution must be adopted. after notice and. public hearing, specifying the terms of the abatement. A city may issue bonds or other obligations to provide an amount equal to the sum of the abatements granted. for a specific property. The maximum principal amount of these bonds may not exceed. the estimated. sum of the abatements for the property for the years authorized.. The bonds may be general obligations of the city if the city council chooses to pledge the full faith and. credit of the city in the resolution issuing the bonds. The law limits property tax abatements to 15 years. School districts and. counties have similar abatement powers. A city, county, and. school district can agree to abate their taxes on the same property. HANDBOOK FOR MINNESOTA CITIES 15:17 This chapter last revised 12/2010