Agenda - Economic Development Authority - 01/12/2012

Home

leverages jobs: on average, it takes only $10,000 to $13,000 in public investment to produce one job vs. the standard $35,000 per job as estimated by the U.S. Department of Commerce. Indirect benefits of redevelopment include saving land from destructive sprawl development and contribution to air quality objectives. According to the Minnesota Department of Employ- ment & Economic Development's (DEED) records, it takes less than $6,000 in public investment per job. In addition, each DEED dollar attracts an average of $26 in other investments. Public expenditures in environmental assessments and clean- ups related to property transactions and redevelopment are far- sighted investments in future responsible growth - more brownfields sites will be made "development ready," and future growth can be steered to places where infrastructure is in place, existing communities can be revitalized, and the negative exter- nalities associated with sprawl can be avoided. EDAM supports legislative initiatives that restore and strength- en funding levels for economic development and brownfields programs administered by the Minnesota Department of Employment and Economic Development (DEED) and the Metropolitan Council. Key Program Funding Initiatives. DEED funds statewide brownfield cleanup and redevelopment through its Cleanup and Redevelopment Grant Programs. A Demolition Loan Pro- gram has been proposed to assist development authorities with the costs of demolishing blighted buildings. In 2008, a Transit Improvement Area Loan Program was created to fund instal- lation of public improvements. The program has not yet been funded. Each of these programs assists sites that have future redevelopment potential. EDAM supports additional funding for the following DEED Programs: a. Redevelopment Grant Program /Demolition Loan Program in the amount of $25 million per year ($10 million from the state general fund and $15 million from state bond funds). b. Transit Improvement Area Loan Program in the amount of $10 million per year ($5 million from the state general fund and $5 million from state bond funds). c. Greater MN Business Development Public Infrastruc- ture Grant Program in the amount of $10 million per year from state bond funds. d. Transportation Economic Development Grant Pro- gram in the amount of $10 million per year in state bond funds. III. PASSAGE OF STATE NEW MARKET TAX CREDITS New Market Tax Credits loans are intended to provide the financing to allow small business owners in low income census track areas to expand their businesses. EDAM supports passage of a State New Market Tax Credit Investment Program for businesses that either expand or relo- cate in low income census tracks in Minnesota. This program would mirror the Federal New Market Tax Credit Program that was created 10 years ago to address the lack of capital available for businesses and economic development ventures in low income areas. The program could include the following provisions: a. Business loans in low income census tracks within Minnesota could be used to purchase equipment, purchase buildings, build new, or remodel buildings. b. Investors would receive a 39% tax credit for investing in low income areas. c. The 39% state income tax credit would be taken over seven (7) years. The State program could be mod - eled after the successful Missouri Program, zero tax credits for years 1 and 2, then 7% for year three and 8% for the final four (4) years. With this structure, the immediate impact on the State budget would be lessened and could be incrementally increased over time. This will let the legislature give an immediate boost to economic development in the most needed areas, attract and leverage more federal tax credit dol- lars to Minnesota and help create new jobs in the low income census tract areas of the state. d. The Minnesota Department of Revenue will admin- ister this state tax credit program and will ensure that 50% of the tax credits are available in Greater MN and 50% in the Twin Cities Metro Area.