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HomeMy WebLinkAboutTax Increment Financing Policy ☒City Council Approved: 4/19/2011 ☐City-Wide Revised: Click here to enter a date. ☐Department City of Edina Policy TAX INCREMENT FINANCING For the purpose of this policy, the “City” shall also mean the Edina Housing and Redevelopment Authority (HRA), which assists in a variety of housing, redevelopment, and economic development activities for the City of Edina. General TIF Definition: • The City of Edina has the authority to use Tax Increment Financing (TIF) pursuant to Minnesota State Statutes. TIF uses the increased property taxes generated by new real estate development within tax increment financing districts to pay for certain cost associated with the development. The complete TIF Act can be found in Minnesota Statutes, Section 469.174 - 469.1799. Policy Purpose: • Establish criteria and guidelines for how Tax Increment Financing (TIF) is utilized in Edina. • Help insure that TIF assistance is used in a consistent and equitable manner. General TIF Policies: • The use of TIF will be considered for projects that qualify and meet the general use of law as defined in Minnesota Statutes, Section 469.174 – 469.1799. • The use of TIF will only be considered on case by case basis for projects that help accomplish the City’s goals for housing, redevelopment, and economic development described in its Comprehensive Plan, Economic Development Strategies, and other related policy documents approved by the City Council. • TIF may be considered to encourage, stimulate, and attract desirable development and/or redevelopment that would not occur without the use of TIF. • TIF will be provided on a pay-as-you-go basis. In certain cases, up-front assistance may be considered by the City, but will be at the sole discretion of the City Council. • The City reserves the right to approve or reject the use of TIF, the amount of TIF, and the total term, on a case by case basis, taking into consideration established policies, project criteria, and demand on services in relation to the potential benefits from the project. • Applicant will pay for all legal and consultant costs associated with the preparation, processing, review and actual use of TIF. Applicant will submit to the City a deposit equal to the total estimated costs for legal and consultant fees. The City will draw upon these funds to pay all related expenses. Page | 2 • Applicant will also pay to the City a separate non-refundable application fee of $2,000 to reimburse staff costs and cover all other City related costs associated with the processing the TIF request. • Projects utilizing TIF are responsible for paying their share of Fiscal Disparities contribution from the project. • The City’s Financial Advisor shall prepare the TIF plan and the applicant will provide to the City and its financial advisor all information necessary to conduct a financial analysis of the proposed project. • Tax increment financing assistance will not be provided to projects that have the financial feasibility to proceed without the benefit of tax increment financing. The business or developer shall provide the City with a project financial pro-forma and a development budget at the time of application. In effect, tax increment financing assistance will not be provided solely to provide an excessive contingency to the project or broaden a developer’s profit margins on a project. • Prior to approval of a tax increment financing plan, the business developer shall provide any required market and financial feasibility studies, appraisals, environmental studies, soil boring information for the project, and other information or data that the City or its financial consultants may require in order to proceed with an independent underwriting. Such information may be public information at the time of submission. • The business developer should provide adequate financial guarantees to ensure completion of the project and the repayment of the tax increment financing subsidy. These may include, but are not limited to, assessment agreements, insurance, letters of credit, etc. • Any business or developer requesting tax increment financing assistance should be able to demonstrate past successful general development capability as well as specific capability in the type and size of development proposed. The developer shall submit a list of qualifications and references. • The TIF agreement will include “look back” provisions to ensure that the TIF was actually needed or will be reimbursed unless otherwise determined by the City Council. • The provision of TIF is contingent upon receiving all other necessary project approvals for the City. • The City will require compliance with the State of Minnesota Business Subsidy Laws in Minnesota Statutes, Section 116J.993 through 116.997, unless the project meets one of the business subsidy exceptions.