Is TCAAP a Revenue Maker?
Property taxes on TCAAP will be used to pay for city infrastructure, police, fire and operation of city services and departments. Estimated tax receipts are $2.1M annually at full buildout and city costs are about $2.1M annually. TCAAP is not a money maker. We should proceed with caution.
Traffic Impacts?
TCAAP has an analysis for intersections leading into/out of the development. TCAAP is estimated to produce 40,000+ car trips per day. There has been no traffic impact done on 96, Hamline, Lexington, or Snelling Ave N. traffic. Statistics show that 80% of traffic heads south towards Minneapolis and St. Paul. There will be impact to existing residents and neighborhoods.
Taxes?
Taxes will increase for residents if density and affordability increase per the Ramsey County tax subsidized housing plan. Such a plan would require TIF[1] and/or property tax abatements[2], meaning less taxes coming in. Arden Hills residents will make up our tax loss difference for the county plan.
The city has staff and equipment to deal with current Arden Hills. Property taxes from TCAAP must pay for additional staff, equipment and facilities. The current council negotiated with the developer to commit to $2.4M in the existing plan to cover any short falls during the first five years.
[1] Tax increment financing (TIF) is a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects in many countries, including the United States. The original intent of a TIF program is to stimulate private investment in a blighted area that has been designated to be in need of economic revitalization. Similar or related value capture strategies are used around the world.
Through the use of TIF, municipalities typically divert future property tax revenue increases from a defined area or district toward an economic development project or public improvement project in the community. TIF subsidies are not appropriated directly from a city’s budget, but the city incurs loss through forgone tax revenue. The first TIF was used in California in 1952. By 2004, all U.S. states excepting Arizona had authorized the use of TIF. The first TIF in Canada was used in 2007. This model has been heavily criticized by Libertarian-Conservative groups and left wing progressive group.
[2]Abatements are often utilized in real estate. Some cities have property tax abatement programs that eliminate or significantly reduce property tax payments on a home for years or even decades. The purpose of these programs is to attract buyers to locations with lower demand, such as areas of the inner city that are in the midst of revitalization efforts.