What a TIF is and why it matters

Posted 10/6/21

Following last week’s Plan Commission article that was long on word count with a somewhat less than ideal explanation section regarding the TIF expansion, it was deemed important from the …

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What a TIF is and why it matters


Following last week’s Plan Commission article that was long on word count with a somewhat less than ideal explanation section regarding the TIF expansion, it was deemed important from the standpoint of proper notice and due reflection that a better explanation be given of this potentially important milestone for citizens of Cottage Grove, not yet finalized but in the works after a recommendation as such was passed at the September 27 Plan Commission meeting, sent to the Council.

Knowing what a TIF is and the powers associated with it is vital to making an informed decision, both for the public and the Council.

Tax Incremental Finance or ‘TIF’ Districts are a tool generally used by cities and other municipalities for one specific purpose: incentivizing development. The principle behind them is to create a special tax zone within the municipal boundaries (but generally not encompassing them) to then raise funds which are spent for development that might not otherwise happen is the TIF district, didn’t exist. This can include housing and businesses, but are also usable for public improvement projects like roads and sidewalks.

Within most communities a TIF district is limited and highly specialized in its area, as was effectively pointed out by one Plan Commission member at the September 27 Plan Commission meeting. In ordinary circumstances one city might have several different TIF districts within its boundaries to spur development in areas that it wants to prioritize from a development standpoint. Each individual district will have a start date for its creation along with a sunset or ‘decertification’ date, at which point it has served its purpose and ceases to exist.

Encompassing the entirety of the city limits in a TIF district only makes sense if it is in fact the city’s intention that developers hear loud and clear that Cottage Grove is open for business (i.e. ‘business friendly’), while cutting out much of the red tape that might otherwise mean objections from city residents and a longer drawn out process for outside developers wishing to make a quick buck within the city limits.

If development is proceeding apace now, a TIF that would encompass the entirety of the city limits, has the potential to put this same development on steroids, with little effectual oversight as such-and this is where resident impact and input becomes important for the TIF, having been recommended as such by the Plan Commission and awaiting a public hearing with a Council vote. Such a city encompassing TIF, if approved, would do too primary things of note: 1) Give the City of Cottage Grove special powers under Chapter 469.126 of the Minnesota state statutes with regard to eminent domain within the city limits.

2) Dramatically curtail the ability and legal options for those affected residents who might wish to counter specific city decisions which are deemed be in the interest ‘of the greater good,’ or eminent domain worthy as such.

As a matter of policy, such an expanded TIF boundary for Cottage Grove only makes sense if the city’s intention is to send an otherwise clear signal to developers that the entirety of the city limits is open to potential business and development, barring in general cemeteries (now protected by law) and burial mounds, though it should be stated that ways are still found to destroy these mounds in our own 21st century. Lower Grey Cloud Island is within the corporate city limits and has many such burial mounds, once having more before these were destroyed by settlers.

As a more immediate example of what an expanded TIF would imply for city residents, take the arterial to be built on 100th Avenue and turned over at some point by the city to the county. Said arterial as a a multi-lane road to a planned future park would/will need space to be built – in other words, land.

Imagine that your property happens to be affected—as many no doubt are/will be in the future—but because the expansion of the city’s TIF boundary to include the city’s corporate limits also gives its powers of eminent domain under state law for the same you could/would be all but forced to sell your property for what is considered or deemed to be a fair market value even if you disagree, because the road arterial would be an example of providing ‘for the greater good.’ It needs be said in all this that the city and others have shown great deference to private developer’s property rights and that those who give their “candid input” as did one low-profile landowner per County presentation records from the May 5 Council meeting, or those whose town board representatives seek “minimum impact” on their behalf as took place in Grey Cloud Township, would be far less likely to shoulder the burden of any such road decision per eminent domain law.

But lest you think it’s just a matter affecting the nearby Mississippi River corridor, think again! Council representatives voting for such a proposed TIF boundary expansion could even see their own properties affected in years to come, once they leave the Council for private life as ordinary citizens. Law, after all, is meant to show no favoritism in these matters. As such, current Council members choosing to vote in approval of such an expanded TIF district when it comes before them would then be giving their successors at the head of Cottage Grove city government far-reaching powers they may not like all that much if applied to home.

Should the expanded TIF boundary be ultimately approved— and it isn’t yet, pending a public hearing and a vote—the city will have all but publicly declared itself for development above both retaining green space and/or resident wishes. That’s something that any justice-minded citizen or Council member, should think long and hard about.