Financial assistance 

TAX INCREMENT FINANCING

Tax Increment Financing (TIF) is a funding tool commonly used by Minnesota cities to help spur and finance redevelopment. When a TIF district is created, the City can “capture” any increase in property taxes generated from a redevelopment. Those dollars, above and beyond the base taxes paid by the property, can be used to reimburse eligible developer costs or to pay for public infrastructure (such as parking, streets, sewer, etc.) within the district.

A successful example of TIF is with the Burnsville Center Village Vision. The City of Burnsville was granted special authority by the Legislature to create a Tax Increment Financing District in and around Burnsville Center. As a result, the City now has an important financial tool in its pocket to have meaningful discussions with property owners, businesses, developers and stakeholders about potential future redevelopment in the area.

The City’s vision for the Burnsville Center Village includes up to $31 million in public projects (including an extension of Aldrich Avenue, a pedestrian bridge and underpass across County Road 42, and a new I-35W off-ramp). This doesn’t even include the private investment needed to make the vision a reality. Using TIF to fund these improvements and redevelopment costs will take some of the financial burden of development off of existing taxpayers, and instead utilize tax funds that wouldn’t be available without redevelopment.

TAX ABATEMENT

Tax abatement refers to the capture or deferral of property taxes. Under Minnesota law, taxes due on real property subject to tax abatement must still be paid as due. If tax abatement is in place, the appropriate portion of the taxes can be captured for development purposes. Just what the appropriate portion is depends on which governmental entities hold public hearings and adopt abatement resolutions. A participating city, county, or school district is required to act separately to determine the use of its share of property taxes.

Any political subdivision, including statutory cities, home rule charter cities, towns, counties, and school districts, is authorized to abate property taxes on selected parcels if:

• The benefits gained equal or exceed the cost to the political subdivision, and
• The abatement is in the public interest because it does one of the following:
  • Increases or preserves the tax base;
  • Provides employment opportunities;
  • Provides or helps acquire or construct public facilities;
  • Helps redevelop or renew blighted areas;
  • Helps provide access to services, or finances or provides for public infrastructure; finance or provide for public infrastructure; phase in a property tax increase on the parcel resulting from an increase of 50% or more in one year on the estimated value of the parcel, other than an increase due to improvement of the parcel.

Cities, counties, and school districts as combined jurisdictions may grant an abatement for no longer than 15 years (8 year maximum if no initial duration is specified), or for no longer than 20 years if two or fewer jurisdictions participate.

PACE

Property Assessed Clean Energy (PACE) is an innovative finance solution for building owners interested in energy efficiency and renewable energy upgrades. The PACE structure overcomes financial challenges that hinder projects by eliminating upfront costs, and providing low-cost, long-term financing.

For more information visit St. Paul Port Authority website.

SCORE®

SCORE® is a nationwide organization of active and retired business men and women who volunteer their services to assist small businesses and entrepreneurs. SCORE® provides free business counseling and offers low-cost workshops on a variety of business topics. Perhaps most importantly, experienced SCORE® counselors offer free, one-on-one, personal confidential counseling on all aspects of small business management from financing to manufacturing to marketing.
Phone: 952-890-7019 SCORE website

SITE CLEAN-UP HELP

Attention developers! Do you have a piece of land that is vacant or underutilized? Do you think it might be contaminated? The Dakota County Community Development Agency (CDA) has a Brownfield Assessment Program that could help! In 2019, the CDA received $600,000 in U.S. Environmental Protection Agency Brownfield Assessment Grant funding. It can be used for environmental site assessments (Phase I or Phase II) at no cost to the property owner. A site assessment can help property owners and developers know how much contamination is on site so a clearer plan for development can occur. You can apply for the grant by submitting this application or contacting:

Lisa Alfson with the CDA at 651-675-4467 or via email at lalfson@dakotacda.state.mn.us.