Minneapolis policymakers have backed a legislation that would allow the city use the tax increment financing to fund the reconstruction of downtown streetcar line. The legislation is as for now doing well, but another more expensive proposal that would let other cities divert property taxes for transportation is yet being pressed down by policymakers.
The tax bill has been recently approved by the House; it allows establishing a TIF district in Minneapolis. The TIF district will be adjacent to the planned streetcar line along the Nicollet Mall and Nicollet Avenue. If the tax bill gets approved by the Senate, Minneapolis will be able to use property tax revenue to pay bonds and cover all the issues related to the streetcar line: planning, acquisition, engineering, and construction. Before the 2013 transportation bill, the TIF district would face expiry within 25 years, and property tax revenue could not be used to cover all the operating costs for the construction.
According to estimates by Minneapolis officials, the construction will need $35 million to $50 million to build the streetcar line 3.5 miles long, connecting Southeast University Avenue and Lake Street. The initial phase of the construction will begin in 2015.
With some additional funding the proposed project of Nicollet-Central streetcar line could extend 9 miles further to the south. The funding tool is critical to the city, as it will help Minneapolis to solve the transportation problems. Transit advocates had hoped for some more funding to allow creating TIF districts all across Minnesota.