Tax Increment Financing

Windom EDA

Economic Development Authority

Three Types of Tax Increment Financing

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
Housing Districts
Redevelopment Districts

What types of TIP districts may be created?

District Type	Use of Increment	Maximum Duration
Redevelopent	Redevelop blighted areas	25 years
Renewal and renovation	Redevelop areas with obsolete uses, not meeting the blight text	15 years
Ecomonic Development	Encourage manufacturing and other footloose industries	8 years
Housing	Assist low- and moderate-income housing	25 years
Soils	Clean up contaminate sites	20 years
Compact Deveopment	Redevelop commercial areas with more dense developments	25 years

Eligibility Requirements

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.

Windom EDA

Three Types of Tax Increment Financing

Eligibility Requirements

Varied Subsidy Levels

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