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The Mission of
Chisago County HRA-EDA, page 2 |
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Business Enterprise Program,
TIF/TAX Abatement, page 2 |
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Why Manufacturing; Why Business
Incentives?,
page 3
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New Initiatives: 2005 Economic
Development & Workforce Partnership,
page 4 |
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2005 Marketing & Business
Development Initiatives; Community Development Initiatives,
page 5 |
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HRA-EDA Housing Initiatives,
page 6 |
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2006 Economic Development Work
Plan and Housing & Community Development Work Plan,
page 7 |
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Christopher Eng,
Executive Director
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Deborah Johnson,
Office Admin. & Program Manager |
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contact us |
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TIF/Tax
Abatement
Tax Increment Financing (TIF) and Tax Abatement are
financing tools used to promote economic development.
These tools allow
cities or the county to capture and redirect a portion
of the
new
property taxes that are generated by, either a new
business relocating into the area, or an existing
business that is expanding.
As an example, let’s assume a business wants to build a
new manufacturing facility on a city-owned piece of
property. In order for the development to take place,
the city needs to raise some money for infrastructure
improvements.
Let’s also assume that the land was previously tax
exempt since it was owned by the city. But, once the
property is sold to a business, the
business
will pay $60,000 in new taxes every year. The difference
between the old taxes ($0) and the new taxes ($60,000),
is called “tax increment”.
This new increment in taxes ($60,000, in this example),
can be used for a number of things, including but not
limited to, making the necessary infrastructure
improvements. This is what we call
Tax Increment Financing.
Tax Abatement
is basically the same concept, however, the abatement is
essentially a “rebate” of a portion of the newly-created
property taxes, (“the increment”). This allows a
business to write down some of the development costs.
Tax abatement can also be redirected to the city and/or
county for public infrastructure costs. |
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The
Chisago County Housing & Redevelopment Authority
(HRA) was created in 1988. In 2000, the Chisago
County Board authorized the HRA to adopt full
Economic Development Authority
(EDA) powers.
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The Mission of the Chisago County HRA/EDA:
To improve
the commercial and industrial tax base
within the County with an emphasis on
assisting our existing businesses, and
marketing the County for new business
development opportunities.
To promote
and maintain a high quality of life in
Chisago County by encouraging affordable
housing development and private investment,
through a collaborative effort with local
units of government and other interested
organizations in Chisago County. |
Currently, the Chisago County HRA/EDA offers a
wide range of resources to public and private
sector clients including:
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Community Development Resources:
Securing & administering local, state and
federal grants and loans, and other community
development programs.
Economic Development Resources:
Assisting local units of government and City
Economic Development Authorities with business
park development programs, tax increment
financing programs, tax abatement assistance,
and other business finance incentives.
Business Resources:
Assisting new businesses become established in
the county, and existing businesses with
expansions, using financial incentives such as
the
Business Enterprise Program.
Housing Resources:
Developing and implementing programs for housing
rehabilitation, senior housing development,
multi- and single-family housing development and
home purchase assistance.
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BUSINESS ENTERPRISE PROGRAM |
The Business Enterprise Program (BEP) is a means by
which banks, utilities and governmental units can
invest in the economic development in Chisago County
through the purchase of
Certificates of Deposits,
(CD’s). The investment term is five years and pays
an interest rate of 3.5% below New York prime rate.
The Chisago County BEP has provided business lenders
with an excellent source of low cost funds. The
participating lenders offer below-market rate loans
to manufacturing, technology and certain types of
service businesses.
Under the
Business Enterprise Program,
loans are made to businesses wishing to either
expand, or relocate to Chisago County. The requestor
must meet the originating bank’s lending
requirements for the loans, which are set at 1%
below prime.
BEP funds may be used for equipment purchases, real
estate acquisition or building construction.
Businesses are required to retain, improve or create
jobs, therefore increasing the county’s tax base.
The maximum term for a BEP loan is five years and
the maximum loan amount is $300,000. The program is
designed for
loans only
and cannot be used for collateral or guarantees.
Since inception of BEP loans in 1994, twenty four
loans have been approved, totaling over $2 million
dollars and creating and/or retaining over 400 jobs
in Chisago County.
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<see 2007 Economic Development Draft Work Plan> |
