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EDA approves adding TIF and tax abatement to business-subsidy policy
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Summary
The East Grand Forks Economic Development Authority voted to add tax-increment financing (TIF) and tax abatement to its business-subsidy policy, giving staff additional incentive tools; the director cautioned the tools require careful due diligence and intergovernmental review.
The East Grand Forks Economic Development Authority voted to add tax-increment financing (TIF) and tax abatement provisions to its business-subsidy policy during its April meeting.
The director told the board the change would place both financing tools into the EDA’s toolbox and give staff more flexibility to retain or grow businesses. “They can be used completely at our discretion, judiciously with a lot of cross checking and due diligence to make sure that the developer is not overstating what they can do,” the director said.
Why this matters: TIF and tax abatement are commonly used to finance infrastructure or encourage redevelopment, but they have limits and require coordination. The director explained that tax abatement can run “up to 15 years, but it typically defaults to 8,” and that action usually involves the city, the county and the school district. “If one of them is like, no, we’re out, then it defaults to the 20 year duration,” the director said, noting the statute provides flexibility on duration depending on participating entities.
The director also noted limits on TIF’s applicability, saying TIF cannot be used for market-rate housing, office or retail in this case and that staff need to be conservative to avoid failed districts. “When TIF doesn’t work, there’s the opportunity to then do a tax abatement,” the director said.
Board action: A board member moved to add TIF and tax abatement into the subsidy policy and a second was made; the board approved the motion.
What’s next: The director said staff will use the tools selectively and pursue required reviews and public processes when a developer requests incentives. The board did not approve any individual incentive packages at the meeting.
Authorities cited in the discussion were referenced generally as state statute provisions governing abatement duration and intergovernmental approvals; the director did not name a specific statute on the record.
The EDA also discussed related land parcels and the limits of TIF where existing building conditions do not meet statutory thresholds for redevelopment support; staff said it will continue to analyze parcels and report back.
