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Minneapolis drawing up plans to pay for tornado damage without assessments

  • Article by: STEVE BRANDT
  • Star Tribune
  • June 7, 2011 - 8:31 PM

They'll be paying plenty to fix damaged property on the North Side, but at least homeowners battered by the May 22 tornado won't get nicked for sidewalk assessments, if the Minneapolis City Council follows a 2009 example.

Homeowners also may get a property tax break on their damaged homes, based on the council's response to the 2009 south Minneapolis tornado.

A council committee on Tuesday directed city staff to estimate the damage to the city's sidewalks, curbs and alleys, mainly from fallen trees. Those costs usually are assessed to homeowners. The staff was also told to develop a proposal to finance the repairs without assessments. That cost might qualify for federal disaster reimbursement, said Mike Kennedy, who directs city street maintenance.

General fund reserves financed the 2009 sidewalk assessment break for homeowners. The city's budget has tightened considerably since then, and the North Side tornado inflicted far more damage. The city's current assessment rate for a typical residential sidewalk is $3.66 per square foot.

State law also provides for property tax relief for owners of property damaged by a tornado if the city declares an emergency, as Minneapolis has done, and makes a request to the state. The assessor reassesses the value of a damaged home, and the following year's property tax goes down proportionately. The state then reimburses local government for the lost revenue. Property that the assessor finds to be more than 50 percent destroyed can qualify for a same-year tax abatement.

No such proposal has reached the council since this year's tornado, and it couldn't be determined Tuesday whether administrators are working to develop one.

Meanwhile, a different council committee approved a proposal to modify for tornado-repair purposes a city loan program that helps homeowners repair homes that don't qualify for conventional loans because of a lack of equity from falling property values.

The state-funded $750,000 program operates in selected foreclosure-hit neighborhoods and offers no-interest loans for people under 115 percent of the area's median income.

The program changes would drop a requirement that homeowners match the loan amount, increase the loan limit to $30,000, require that tornado repairs and hazards be addressed before other work, and allow qualifying buildings to have up to four units.

Steve Brandt • 612-673-4438

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