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RELEVANT LINKS: <br />League of Minnesota Cities Handbook for Minnesota Cities 8/1/2023 <br />Community Development and Redevelopment Chapter 14 | Page 16 <br />For more information, <br />contact DEED 651.259.7114, <br />800.657.3858. Main Office: <br />1st National Bank Building <br />332 Minnesota Street, Suite <br />E200 Saint Paul, MN 55101- <br />1351. <br />If a city decides to investigate the use of industrial bond financing, it <br />should contact the Department of Employment and Economic <br />Development. The department provides the city with information, advice, <br />and technical assistance. This assistance is important, due to the adoption <br />of federal and state laws allocating issuance authority among the states <br />and their political subdivisions. The commissioner of Securities must <br />approve the project. <br /> D. Commercial rehabilitation loan program <br />Minn. Stat. § 469.184. Cities have authority to carry out programs for the rehabilitation of small <br />and medium-sized commercial buildings. The city must adopt a program <br />ordinance that provides for the adoption of program regulations, including <br />a definition of small and medium-sized commercial buildings. Loans <br />under the program may be for amounts up to $200,000. The city may <br />finance the program through the sale of revenue bonds. <br /> E. Tax increment financing (TIF) <br />Minn. Stat. § 469.174 subd. <br />9. <br />Minnesota House Research <br />Department, How TIF <br />Works: Basic Mechanics. <br />Tax increment financing is a method of stimulating economic <br />development in a targeted geographic area. TIF uses the additional <br />property taxes that are paid due to the new development to pay for the <br />development costs. Tax increment financing authority is available to most <br />cities. <br />Minn. Stat. § 469.175 subd. <br />1. For a city to make use of TIF, the city must find that the development <br />would not happen through solely private investment and that the new <br />development will result in a net increase in market value for the site, <br />compared to the likely development that would occur without TIF. <br />Minnesota House Research <br />Department, How TIF <br />Works: Basic Mechanics. <br />When a TIF district is created, the county auditor certifies the current tax <br />capacity of the properties in the district as the district’s “original tax <br />capacity.” As the property in the district increases because of the new <br />development, the increases above the original tax capacity are captured, <br />referred to as “captured value.” The taxes paid on the captured value are <br />called “increments.” Unlike property taxes, increments are not used to pay <br />for general costs. Instead, the money is used to repay costs the city <br />incurred in acquiring the property, removing existing structures, or <br />creating infrastructure. <br />Minnesota House Research <br />Department, How TIF <br />Works: Basic Mechanics. <br />The property owner in a TIF district continues to pay the full amount of <br />property taxes. TIF involves only the increased property taxes generated <br />within the district. It does not change the amount of property taxes <br />currently derived from the redevelopment area, nor does it directly affect <br />the amount or rate of general ad valorem taxes the city levies.