The outcome of the Moline parking ramp settlement was presented at the December 17 City Council Meeting. That presentation is available online here and documents are available here.
To summarize: The City of Hopkins, and the Hopkins HRA, agreed to issue an additional TIF Note for $8 million and extend the duration of the TIF District from 15 to 25 years. The obligation will be paid from TIF generated from the new property value created by the Moline development. The developer, Doran Companies, will retain ownership of the parking ramp.
The Moline parking ramp settlement will not directly affect any budget or tax levy in the near term. The City’s tax levy is divided among all properties based on taxable market value, which does not include value created in tax increment financing (TIF) districts. However, property in TIF Districts do pay taxes on the base value (the value of the property before redevelopment). Because the redevelopment would not have happened but for the use of TIF, the real impact on taxable market value is in the normal increase the base property value would have experienced due to inflation and market value increases of the previous office/warehouse development. The City acknowledges, however, that the settlement results in the City of Hopkins being able to capture the increased property taxes later than originally planned.
Even though the duration of the TIF district was extended from 15 to 25 years, based on projections, with very modest inflation (two percent), the district will have the obligations paid off in 21 years. If we use more of a historical, but yet conservative inflation of four percent, all obligations would be paid off in 18 years.