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<br />145 University Ave. West www.lmc.org 8/1/2023 <br />Saint Paul, MN 55103-2044 (651) 281-1200 or (800) 925-1122 © 2023 All Rights Reserved <br />This material is provided as general information and is not a substitute for legal advice. Consult your attorney for advice concerning specific situations. <br /> <br /> <br />HANDBOOK FOR MINNESOTA CITIES <br />Chapter 14 <br />Community Development and <br />Redevelopment <br /> <br />Learn about the requirements for a city to establish criteria for awarding business subsidies and <br />various development agencies cities may create. Find an overview of state and federally sponsored <br />programs for encouraging development and redevelopment. Most economic development tools can <br />be applied to any size city. These tools are interrelated, and a city may use several for one project. <br />RELEVANT LINKS: I. Business subsidies or financial assistance <br /> A. Business subsidies <br />Minn. Stat. § 116J.993, subd. <br />3. State law defines “business subsidy” or “subsidy.” It is a state or local <br />government agency grant, contribution of personal property, real property, <br />infrastructure, or the principal amount of a loan at rates below those <br />commercially available to the recipient. In addition, a business subsidy is <br />any reduction or deferral of any tax or any fee; any guarantee of any <br />payment under any loan, lease, or other obligation; or any preferential use <br />of government facilities given to a business in an amount greater than <br />$150,000. <br />Minn. Stat. § 116J.994, subd. <br />5. <br /> <br />Prior to awarding a business subsidy (financial assistance of more than <br />$150,000 or as required by law) to any business, a city and any housing <br />and redevelopment authority (HRA), economic development authority <br />(EDA), port authority, or nonprofit created by a local government, must <br />hold a public hearing, and adopt criteria for awarding business subsidies. <br />Minnesota Department of <br />Employment and Economic <br />Development (DEED). <br />Minn. Stat. § 116J.994, subd. <br />11. <br />The criteria must not be adopted on a case-by-case basis and must set the <br />minimum requirements that recipients must meet to be eligible. It must <br />include a policy regarding the wages to be paid for any jobs created. <br />Copies of the criteria adopted by cities are found on the Minnesota <br />Department of Employment and Economic Development (DEED) <br />website. The public hearing notice must include a statement that either a <br />resident or a city property owner may file a written complaint with the city <br />if the city does not follow the business subsidy law. Written complaints <br />must be filed within specified timelines. <br />Minn. Stat. § 116J.994, subd. <br />3. Once the criteria are established, the grantor and the recipient must enter <br />into a subsidy agreement that meets the statutory requirements. The <br />agreement must include an obligation to repay at least part, if not all, of <br />the subsidy if the recipient does not meet its obligations.