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RELEVANT LINKS: League of Minnesota Cities Handbook for Minnesota Cities 8/1/2023 Community Development and Redevelopment Chapter 14 | Page 15 An industrial park’s purpose is to attract industrial development. Minn. Stat. § 272.02 subd. 39. Property a city holds for later sale for economic development purposes remains tax-exempt for a period not to exceed nine years, or until buildings or other improvements that are constructed after acquisition reach one-half occupancy. For cities located outside of the metropolitan area with populations less than 20,000, the period must not exceed 15 years. Currently, private enterprise creates most new industrial park development by establishing a for-profit community development corporation. A city can cooperate with that corporation through its land use controls and methods of financing public improvements. Many cities have also established industrial parks complete with streets, water, and sewer, despite the possible tax ramifications. The city then sells or leases a portion of the park to a business needing a location for its building. Minn. Stat. § 469.185. Any city that owns property that is not restricted by deed may convey the lands for nominal consideration, to encourage and promote industry, and to provide employment for citizens. A.G. Op. 476-B-2 (Mar. 2, 1961). City of Pipestone v. Madsen, 287 Minn. 357, 178 N.W.2d 594 (1970). This statute has been read narrowly by the Office of the Attorney General. The conveyance must encourage and promote industry and provide employment for citizens. For example, a conveyance of land for an indoor arena was not within the statute; a more direct promotion of industry was necessary, beyond the fact that more potential customers might be in town because of athletic contests. However, the courts have upheld the municipal industrial development revenue bond law, discussed below, against the same objection. The city’s attorney can best advise the city concerning the legality of a purchase of land for resale. C. Industrial revenue bonds Minn. Stat. §§ 469.152 - 469.1655. Municipal industrial development laws help cities attract new commercial and industrial development and keep existing businesses in the city. The law authorizes the council to issue revenue bonds and use the proceeds to acquire and construct industrial sites and facilities. The city then leases these facilities to private industry and uses the rental fee proceeds to retire the bonds. Minn. Stat. § 469.156. Minn. Stat. § 469.162. A city may issue industrial revenue bonds, also known as municipal revenue bonds, without public referendum. It cannot pledge the full faith and credit of a community as security for these bonds. Thus, the city may not tax property owners to pay principal and interest on the bonds.