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City of Minneapolis Policy for the Use of Tax Abatement for Historic Properties

I. Purpose of Policy

This tax Abatement Policy identifies the circumstances in which the City of Minneapolis will use Tax Abatement to support the substantial rehabilitation of historic properties.

II. Background and General Requirements

Pursuant to Minnesota Statutes Sections 469.1812 to 469.1815, the City of Minneapolis is authorized to grant abatement of all or a portion of the City property tax amount on specified tax parcels. The City of Minneapolis may abate taxes only after holding a public hearing and adopting an abatement resolution that stipulates the specific terms of the abatement agreement and the nature and extent of the public benefits that the City expects to result from the abatement.

The City Council must find that the expected benefits to the City of the proposed abatement agreement at least equal the costs to the City of the proposed agreement. The City Council must also find that the abatement is in the public interest because it will facilitate at least one of the following objectives:

1. Increase or preserve tax base;

2. Provide employment opportunities in the City of Minneapolis;

3. Provide or help acquire or construct public facilities;

4. Help redevelop or renew blighted areas;

5. Help provide access to services for residents of the City of Minneapolis;

6. Finance or improve public infrastructure; or

7. Phase in a property tax increase on the parcel resulting from an increase of 50 percent or more in one year on the estimated market value of the parcel, other than increase attributable to the improvement of the parcel.

III. Restrictive Use of the Abatement Tool for Historic Properties by the City of Minneapolis

The City of Minneapolis will limit the use of Tax Abatement under this policy to a more restrictive range of uses than authorized by the State Legislature.

1. Taxes may be abated only for properties with Historic Preservation designation.

2. Taxes may be abated only to support the substantial rehabilitation of the property.

IV. Evaluation Criteria

The following criteria will be considered in the evaluation of any proposal to use tax abatement for historic properties:

1. The extent to which the proposed use of tax abatement is consistent with the City goals, development priorities, Comprehensive Plan and zoning codes.

2. The extent of the direct and indirect public benefits and costs generated by the tax abatement and redevelopment shall be determined and quantified to the degree possible.

3. The extent to which other government jurisdictions support the project, including but not limited to participation in the public abatement agreement.

4. The extent to which other public assistance is being provided to the project.

Approved by City Council August 11, 2000

April 27, 2004

Last updated Sep 27, 2011