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City manager proposes switching pre-1994 CRA to post-1994 model; only distillery retains pre-1994 CRA
Summary
Staff presented a proposal to transition the city's pre-1994 Community Reinvestment Area (CRA) policy to a post-1994 framework to increase local discretion and raise the revenue-sharing threshold; staff noted only one business (a distillery) currently holds a pre-1994 CRA.
City Manager Gunderson raised a proposal to convert the city's pre-1994 Community Reinvestment Area (CRA) structure to a post-1994 CRA. He said the pre-1994 CRA automatically grants a 15-year, 100% abatement and leaves the city with limited discretion, while a post-1994 structure provides more flexibility and raises the revenue-sharing threshold that triggers school revenue sharing.
Gunderson said the change would raise the revenue threshold before school revenue sharing kicks in from $1,000,000 to $2,000,000 in the model discussed, which could reduce the city's future exposure to revenue-sharing obligations. He told council that only one business in the city currently holds a pre-1994 CRA (a distillery that entered a CRA within the past few years); other projects have instead used local tax reimbursement arrangements.
Council asked staff to provide a list of existing CRAs, their type (pre- or post-1994), and who holds them so council can consider ordinance language and next steps. Gunderson said a draft ordinance would be brought back for further council consideration.
