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� , City �' Roseville, Minnesota � J � Introduction The purpose of this study is to develop an educational guide which can be used to assist the City aF Roseville with the redevelopment of Twin Lakes and other development in the City. This study will provide an overview aF specific development and redevelopment tools, concepts, and financing issues, which in all likelihood will be applicable to projects proposed in the near future. � The Springsted study team began the process with a meeting of all appropnate City Staff, and the City's development consultants and bond attorney. The discussion centered on the redevelopment issues in the City, and specifically on � the tools and concepts that are most likely to be utilized. This report contains an instructional summary of these primary development/redevelopment tools and financing concepts. � � A. ECONOMIC DEVELOPMENT AND REDEVELOPMENT TOOLS This section focuses on specific tools and programs that entities are statutorily authorized to use to facilitate redevelopment. 1. Ta�c Increment Financing (Minnesota Statutes Chapter 469.174 — 469.1791) Tax Increment Financing (TIF) uses the increased property taxes generated by '� new real estate development within a defined geographic area to pay for certain �� eligible costs associated with the new development. The value that is "captured" (i.e. the increase in value over the year the TI F district was established) generates � property taxes. These incremental property taxes are collected by the Authority creating the district (City, EDA, HRA, etc.) and then appropriated to the project. The incremental taxes are used to assist eligible project costs such as land acquisition, demolition, public and site improvements, and related consulting and � administrative costs. The value aF the property prior to development (i.e., the "non-captured" portion or "base value") continues to generate property taxes and is distributed to all appropriatetaxing jurisdictions. '� The justification for the use of TI F rests solely with the "But For" test. I n order for the City to create a TIF district it must make a finding that the new development � would not occur "but for" the use of tax increment financing. Counties and school districts may challenge this finding, because creating a TIF districtwill not result in any enhancement to their general tax base until after the TIF district is terminated. The term of a TIF district varies depending upon the type of district created. � Project costs can be financed with general obligation tax increment bonds, straight revenue bonds, or pay-as-you-go notes. Financing options are discussed in a .� later section of this report. Tax increment revenues may be spent outside of the : � TIF district or "pooled" with other districts, but these pooled expenditures carry with them some fairly significant restrictions. � " k. k� SPRiNGSTED F�� 3