2004_0315_Packet - Laserfiche WebLink

Home

TIF Can Help the Environment and the Economy: Cleanup of contamination and removal of aging, deteriorating first ring suburban properties enhances community livability, image, tax base and avoids a painful cycle of more serious deterioration, declining property values, crime and urban decay. The benefits of land recycling accrue to the state through higher commercial taxes and income taxes, and all of the local property taxing jurisdictions. Just as there are positive ripple effects created through reinvestment and redevelopment, there are more serious negative ripple effects created if the contamination and deferred maintenance of parcels remain. The Problem: Why DevelopmentDoesn't Pay in Brownfield's - In an effort to reform the property tax system a few sessions ago, the legislature lowered the tax rate on commercial/industrial property. While this was a positive change in general, the ability to generate revenues within Brownfield areas like Twin Lakes was greatly curtailed. Property tax reform had the effect of greatly increasing the financing gap for redevelopment projects such as Twin Lakes. Also, many state programs that might have mitigated this problem are under- funded or in jeopardy. Last session, the Govemor vetoed funding for the Redevelopment Account and the Contamination Cleanup Grant Account (both DTED programs). Another State mandated fiscal policy is the regional tax sharing plan called fiscal disparities. Roseville pays fiscal disparities on all commercial projects developed within the community. Fiscal Disparities requires some communities, like Roseville, to redistribute nearly 40% of their growth in commercial property tax. This helps to fund projects where the commercial growth is not as strong such as the inner cities and bedroom communities. These State policies reduce the potential amount of new revenues generated by redevelopment. All these factors coupled with the already high costs associated with redevelopment increases the risk for developers and increases the financial gap and ability to fund the project. V�(thin Twin Lakes, the contamination costs alone are estimated to be over $5 million. In addition, there are over $14 million in public infrastructure costs associated with new roads, interstate ramp reconfiguration and traffic lights. All added costs that a developer does not have to incur on vacant, clean land. �