State auditor explains why special taxing district could address housing crunch in Grand Marais
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State auditor explains why special taxing district could address housing crunch in Grand Marais

The Grand Marais City Council will make a number of decisions this year that could play a significant role in bringing much-needed housing to the community.

Among the decisions the council will make involves creating a tax increment financing (TIF) district in Grand Marais. The local Housing Redevelopment Authority (HRA) is likely to request the creation of such a district sometime in early 2023. If created, the district would be a key factor in creating a 51-unit housing complex near the water tower above town near the Gunflint Trail.

During their Jan. 11 meeting, the council members resumed conversations with HRA Director Jason Hale regarding the transfer of city property. The council previously met with Hale during the Dec.14 meeting.

The council unanimously approved a resolution to transfer property to the HRA for a residential development project. The resolution included two quit claim deeds. 

The transferred property is located on the northwest corner of 5th Avenue West and the inside curve of the Gunflint Trail in Grand Marais. The residential development project consists of a 51-unit mixed-income multifamily apartment building. The tentative name of the anticipated housing development is Sawtooth Flats.

In related news, State Auditor Julie Blaha released the annual Tax Increment Financing (TIF) Legislative Report in early January.

“TIF districts are ending early more often – and that’s good news,” Blaha said. “The benefits of TIF for taxpayers are realized when a district ends and the new value becomes part of the tax base. Early decertifications show that once planned costs are paid, authorities are closing districts and reaping those benefits.”

Tax increment financing is a financing tool for redevelopment, housing, and economic development projects that allows authorities to use the incremental property taxes generated by the increased taxable value of a development to help finance the development activities. If that sounds complicated, think of it this way: TIF districts are used to create housing projects. And they come steeped in government oversight.

“Education and oversight activities help ensure good stewardship of tax increment financing, where authorities terminate TIF districts in a timely manner and return any excess tax increment revenues to counties, cities, and school districts,” Blaha said.

WTIP’s Joe Friedrichs spoke with Blaha and the auditor office’s TIF Director Jason Nord about the legislative report and where the financing tool could fit in terms of addressing the housing crunch in Cook County. Audio below.