BUSINESS DEVELOPMENT INCENTIVES IN AVON

Are you an entrepreneur or a business owner looking to expand or start a business in Avon? Check out the incentives available in Avon such as TIF Financing and low-interest loans for businesses.

LOW INTEREST LOANS

CITY OF AVON REVOLVING LOAN FUND (RLF)

REVOLVING LOAN FUND GUIDELINES
APPLICATION FOR LARGE LOAN

REVOLVING LOAN APPLICATION

The City’s Revolving Loan Fund (RLF) is a revolving loan fund that provides funding for the following purposes:

1.) To assist in financing development costs related to expanding, maintaining or starting a business within the City of Avon.

2.) To assist in the creation of new permanent jobs or retention of endangered jobs within the City of Avon.

3.) To encourage private investment within the City.

4.) To assist in financing commercial building improvements that address rehabilitation and renovation issues that are contributing to slum/blight and/or urgent community needs.

For more information on the City’s Revolving Loan Fund contact Jodi Austing-Traut at 320-356-7922 or jodi.a@cityofavonmn.com

TAX INCREMENT FINANCING (TIF) BASICS

What is the primary purpose of TIF?

Tax increment financing (TIF) is a method of financing real estate development costs--i.e.:

1. to encourage developers to construct buildings or other private improvements, or
2. to pay for public improvements, such as streets, sidewalks, sewer and water, and similar improvements.

What is the source of the financing?

TIF uses the additional property taxes paid as a result of development in the district to pay for part of the development costs. When a new building is constructed, the market value of the property and its property taxes typically rise. Classic examples would be building a new store on an undeveloped parcel or replacing one or more old buildings with a new, larger building. In both of these instances, the market value of the property will rise because the improvements add value to the parcel.

How do the mechanics of TIF work?

When a TIF district is created, the county auditor certifies the current tax capacity of the properties in the district as the TIF district's "original tax capacity." As the property in the district increases in value, these increases above the original tax capacity are "captured." The law refers to this amount as the district's "captured tax capacity."

When a TIF district is created, the county auditor also certifies an "original tax rate." The original tax rate is total property tax rate that applies in the district, i.e., the tax rates imposed by all of the local governments that levy taxes (the city/town, county, school district, and special taxing districts).

The "tax increment or increment" for the district is determined by multiplying the original tax rate by the captured tax capacity. This roughly equals the taxes paid by the captured tax capacity or the increase in taxes that occur as a result of the development.

What are the typical uses of TIF?

TIF traditionally was used as a means of redeveloping urban areas that had old or worn-out buildings in need of replacement or rehabilitation. It was initiated as a tool to help with urban renewal (redeveloping "slums" and "blighted" areas). Its use has spread to other purposes. TIF in Minnesota is generally used to:

• Redevelop areas occupied with substandard buildings
• Build housing for low-income and moderate-income families
• Clean up pollution
• Provide general economic development incentives
• Finance public infrastructure, such as streets, sewer, water, sidewalks, and similar improvements. (This is not an explicit purpose of TIF, but Minnesota cities frequently use it for this purpose.)

To find out if TIF would work for you, please contact the City Clerk/Administrator at 320-356-7922 or jodi.a@cityofavonmn.com