Tax break makes sense for apartment [UPDATED]Published 5:05am Monday, June 17, 2013 Updated 7:06am Monday, June 17, 2013
A proposal by a Baxter apartment developer to use a state program known as tax increment financing for a 105-unit apartment in Fergus Falls makes a lot of sense.
Tax increment financing has been around for a couple of decades now as an economic development tool. In the case of the proposed apartment behind Target, the idea is to use the extra taxes collected due to the increase in value of the property to pay for needed public improvements such as the handling of storm water.
While the city, county and school district would miss out on property taxes for a few years, the community benefits from the public improvements, along with the added housing and jobs the project will provide. If not for the tax increment financing, the project may not be feasible.
Tax increment financing isn’t the kind of program politicians can tout in sound bites. But cases such as the proposed apartment show it can be a valuable, if not glamorous, economic development tool.