Economic Development & Redevelopment

Tax Increment Financing

Tax Increment Financing (TIF) and Tax Abatement are powerful tools to help incentivize private investment and assist with expenditures to promote economic development and redevelopment. Navigating the creation and management of a TIF District – as well as the use of Tax Abatement – can be complex! Rely on the Municipal Advisors at Ehlers to help you manage the process to build strong, vibrant and equitable communities.

Economic Development & Redevelopment Services provided by Ehlers & Associates.

TIF District Feasibility & Creation

Ehlers guides clients through the feasibility analysis and district creation processes necessary to facilitate Tax Increment Financing. As part of these engagements, we:

  • Consult with you to develop a full understanding of your community’s Tax Increment Financing (TIF) District creation objectives
  • Review potential District geographic boundaries to establish statutory compliance & achieve optimal outcomes
  • Conduct a thorough analysis to determine feasibility and financing gap
  • Draft the TIF plan, cash flows, but-for analysis
  • Attend public meetings as needed to present plans & analysis for District establishment
  • Submit required documentation to the state and county for certification and to fulfill filing requirements

TIF Implementation & Administration

Establishing the TIF District is only the first step. Ehlers delivers ongoing advisory services once your TIF District is created to help your community achieve its development and redevelopment objectives. When implementing and administering TIF Districts, we help clients:

  • Plan & execute financing required for implementation of the TIF District
  • Provide input on creation of revolving loan funds, TIF incentive policies & procedures
  • Conduct project pro forma analyses to evaluate developer requests for TIF assistance
  • Assist with negotiation of developer agreements
  • Prepare cash flow projections to review economic viability & identify risk mitigation strategies
  • Assist with annual reporting & other requirements
  • Facilitate TIF District amendments to leverage available statutory provisions to adapt to changing circumstances, improve cashflows & seize new opportunities
  • Develop & evaluate strategies to address under performing TIF Districts

Tax Abatement Planning & Implementation

Minnesota Statutes allow political subdivisions such as counties, cities, towns and school districts to abate their share of all or a portion of a parcel’s property taxes to help finance economic development, public service and infrastructure projects deemed to be in the public’s best interest. Relative to TIF districts, tax abatement is a simpler process that has fewer requirements. But that does not mean the process is easy! Ehlers’ Municipal Advisors can help:

  • Determine parameters allowable by state statute
  • Create a thorough cost-benefit analysis of the proposal
  • Negotiate with other taxing jurisdictions, as needed
  • Prepare cashflows and memos
  • Attend public meetings sharing the proposal & analyses

Following the public hearing, according to Minnesota statute, the taxing jurisdiction needs to make two findings:

The abatement expects the benefits to the political subdivision to at least equal the costs to the political subdivision and the project is in the public interest because it will do at least one of the following:

  • Increase or preserve tax base
  • Provide employment opportunities
  • Provide or help acquire or construct public facilities
  • Help redevelop or renew blighted areas
  • Help provide access to services for residents
  • Finance or provide public infrastructure

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