Minneapolis — Tax Plan for Streetcar Considered
The Star Tribune reports that the Minneapolis City Council is considering allocating about $5 million annually in property taxes to help fund construction of a streetcar line on Nicollet and Central Avenues. The state legislature earlier this year authorized establishment of Value Capture districts where residences are being built and such districts would be established in Minneapolis, with some of the additional tax revenue going to the streetcar project. High profile residential towers now being built would be in the Value Capture district and will add 1200 units to the housing market. According to the Mayor’s office, the proposed line will cost between $200 and $220 million to build, with about $60 million coming from the Value Capture districts.
On June 18, both the Transportation and Public Works and the Ways and Means/Budget Committees voted overwhelmingly to approve the creation of a Value Capture District comprised of five separate parcels. Development is already underway in all five parcels.
The Value Capture concept differs from the Tax Increment Financing (TIF) approach used in many places in that the generated revenue is to be devoted to a public benefit (the streetcar) rather than being shared with a private developer to entice development.
The proposed route is shown below: