The Ramsey City Council approved extending the deadline on projects in The COR funded by Tax Increment Finance District 14 March 10. The move still needs approval by the Legislature.
The extension only pushes back the deadline, called the five-year rule, by which new contracts or projects can be approved and still be eligible for 100% financing or reimbursement, according to council documents. The district is still scheduled to be decertified by 2040.
The five-year rule, which was extended to 10 years for this district, requires that all qualified expenditures be spent within the alloted time frame following the certification of the district, according to council documents. Any spending after the date can only be reimbursed through pooling dollars, which is limited to 25% of money generated within the district, according to council documents.
“We’re concerned that we’re not going to have time to fully approve that project and lose out on the opportunity to use TIF 14 as that funding source for that expansion of Bunker Lake Boulevard,” Deputy City Administrator Tim Gladhill said.
A TIF district is a tool often used by cities to encourage development in specific regions. The tax capacity of a district is determined when it’s certified and any additional property taxes collected as the property value increases (called the increment) are used to fund improvements within the district.
The big project staff is interested in ensuring will be funded through the TIF district is the expansion of Bunker Lake Boulevard between Ramsey and Armstrong boulevards, Gladhill said.
Another project the city could use TIF 14 funding for is improving the northwest corner of The COR. As it stands, that area is difficult to develop because it is low lying, Gladhill said. The city could use TIF 14 money to bring the area up to grade.
Other projects TIF District 14 could fund include the reconstruction of Zeolite Street and the extension of Ramsey Parkway to Sunwood Drive.
TIF District 14 is in The COR and was established 2011, but growth in the district was slow due to the recession, and it wasn’t until around 2015 when the city began seeing increments come in, Gladhill said.
“TIF is a very powerful tool and especially in Ramsey’s case with our development here,” Council Member Chris Riley said. “Timing of just the way the economy and our market has been working hasn’t allowed us to take advantage of this.”
There are currently three developments with pay-as-you-go TIF obligations including the Residence at The COR Apartments, PSD apartments and Affinity Apartments, according to council documents.
If approved by the Legislature, this would be the second time Ramsey was allowed to extend the deadline on TIF District 14.
With the council’s approval, the next step is to request the legislation is introduced in the State House and Senate, according to Gladhill. That is on hold now as the Legislature is in recess until mid-April.
If the extension passes both legislative bodies, it will likely be included in the overall tax bill to become law, according to council documents.