City Council Decertifies Two Tax Increment Financing Districts (TIFs)
On August 8th the City Council decertified Downtown TIF #1 and Food Service Specialties TIF #5-1. The TIFs were decertified, or ended, as they have successfully completed their projects, retired their respective debt obligations and reached their statutorily defined duration limits.
Downtown TIF #1 was certified on December 8, 1975 and helped finance substantial improvements in Red Wing's historic downtown. Food Service Specialties TIF #5-1 was certified on August 11, 1998 and assisted in financing the development costs related to locating Food Service Specialties in our community. It is important to note that all TIF districts must pass what is referred to as a "but for" test. But not for TIF, these jobs and improvements would not have occurred in our community.
The TIFs have resulted in a substantial increase to the City's tax capacity. The increase in taxable net tax capacity equates to approximately $14,490,800 in taxable residential market value. Decertifying the TIFs will place this tax capacity back on the general property tax rolls for pay 2011. In 2010 this increase in tax capacity would have generated $173,010 for all local taxing jurisdictions and $79,891 specifically for the City of Red Wing. Decertifying the TIFs assists in reducing the tax burden on all taxpayers as the property tax burden is spread over a larger tax capacity - one which includes the decertified TIF tax capacity.