Tax Increment Financing and Tax Abatement
The City of Woodbury has an active Economic Development Authority (EDA) that promotes and facilitates economic development within the city. The EDA considers proposals on a case-by-case basis and uses a broad range of competitive financing programs designed to save companies substantial interest expense over the life of a project, while simultaneously improving their return on equity. Below is a sampling of incentive programs that the city has to offer. The State of Minnesota also offers a wide variety of economic development financing tools.
Tax Increment Financing (TIF) can be used to entice new development as well as to finance public infrastructure related to the project. Woodbury typically uses the pay-as-you-go method whereby a developer would front the cost of certain development activities and then be reimbursed over time by the difference in property tax values between the original value of the property and the value after the project is completed.
Minnesota law allows cities to use Tax Abatement to abate property taxes for economic development projects that create new jobs or add to the tax base. Abatement allows Woodbury to refund a portion of a company's property taxes for a defined period of time. It is used when a company makes improvements on vacant land or a building that will result in higher property taxes being paid. The practice in Woodbury is to abate the difference between the land/building's original value and its value after the improvements are completed.
State of Minnesota Funds
The Minnesota Department of Employment and Economic Development (DEED) offers a variety of business financing programs including the Minnesota Investment Fund and the Minnesota Job Creation Fund. These programs are designed to help add new jobs with a focus on industrial, manufacturing, and technology-related industries to increase the local and state tax base and improve economic vitality statewide.