Tax increment financing uses the increase in property taxes generated by new development to finance qualified public improvement costs related to that development. The difference between the current property tax on a parcel of land and the estimated property tax after development is the “tax increment.” Permitted uses of the tax increment vary according to the type of tax increment financing.
Three Types of TIF Districts
Economic Development Districts
What types of TIP districts may be created?
Use of Increment
Redevelop blighted areas
Renewal and renovation
Redevelop areas with obsolete uses, not meeting the blight text
Encourage manufacturing and other footloose industries
Assist low- and moderate-income housing
Clean up contaminate sites
Redevelop commercial areas with more dense developments
For economic development purposes, the City of Windom will consider using tax increment financing to write down the cost of land, utilities, roads, site preparation, rail access and other eligible economic development uses. To be eligible for TIF, a project should:
Create new commercial/industrial tax base
Effectively use community infrastructure and industrial park land
Redevelop underutilized industrial land or properties with rail access, or
Encourage private investment in properties which the City has targeted for development or redevelopment
Varied Subsidy Levels
It is not necessary for a single project to achieve all of these goals. The degree to which it meets these goals influences the level of subsidy it can expect to attract.
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