Funding Rolling in for Still-Uncertain Nicollet Ave Streetcar in Minneapolis
"About one percent of Minneapolis' tax capacity will be redirected next year toward a fund intended to one day pay for a streetcar line," reports Eric Roper. The streetcar line in question is the 3.7-mile Nicollet Avenue streetcar, which, according to Roper, is still far from certain.
According to Roper, the funding mechanism the streetcar "is hitting its stride as several new apartment towers have opened." But Roper raises the concern that the funds generated by the streetcar district won't be used to help "absorb the growing cost of city services."
"Those buildings now have $5.4 million in city tax capacity, which will aid the streetcar "value capture" district next year rather than helping absorb the growing cost of city services," explains Roper.
Minneapolis' value capture differs from traditional tax increment financing districts, writes Roper, because "Unlike tax increment financing, which pays for development with new taxes generated by that development, the streetcar district redirected taxes from a number of anticipated buildings toward a potential future project."
Roper includes more details about the developments that are now enriching the streetcar district. If the streetcar is to become a reality, the district is expected to pay for about $60 million in debt for the $200 million project.