Whether you are starting your business or you need to expand, Burnsville wants to help you succeed. Please contact Skip Nienhaus at 952-895-4454 to find out what municipal financing tool may be applicable to your project.

- Tax Increment Financing
- Tax Abatement
- Industrial Development Bonds
- List of Local Banks

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   Web: www.scoremn.org

TAX INCREMENT FINANCING
Tax Increment Financing (TIF) uses the increased property taxes generated by new real estate development within a tax increment financing district to pay for certain eligible costs associated with the development. The value that is “captured” (i.e., the increase in value over the year the TIF district was established) generates property taxes. These “incremental” taxes go to the development authority or the city authority rather than to the city, county, school district, or other taxing jurisdictions that normally share in the total property tax bill. The captured taxes are used to subsidize eligible project costs such as land acquisition, demolition, public and site improvements, and related consulting and administrative costs. The value of the property prior to development (i.e., the “non-captured” portion) continues to generate property taxes which are distributed to all appropriate taxing jurisdictions.

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.

INDUSTRIAL DEVELOPMENT BONDS
Industrial Development Bonds, commonly referred to as IDB’s, are a mechanism to allow private entities to finance costs associated with constructing a new building or expanding an existing structure. The City would be the issuer of the bonds on behalf of a manufacturing company so that they can obtain a financially advantageous tax exempt status on the bonds. The City is basically allowing a qualified manufacturing company to utilize its tax exempt status for the purpose of borrowing money at a lower cost to provide a financial incentive to the company resulting in expansion of the tax base and job growth. The City does not bear any risk or responsibility for making bond payments in this type of issuance. IDB’s are technically municipal bonds but are not general obligations of the City, therefore only the company is required to pay principal and interest on the bonds. The IDB’s are marketed solely upon the creditworthiness of the private entity and the revenues that are projected from the business operations of the entity.