Local Level Funding Sources

Municipal Incentive Programs

Municipalities have the option of using their resources to provide incentives for historic preservation maintenance and development projects.  Incentives such as tax valuation exclusions, facade improvement loans or grants, and tax increment financing have been used in Minnesota to facilitate preservation projects.  The investment results in stronger property values, property improvements that can generate retail foot traffic, and preserved cultural assets the retail a community’s unique character and connection with its historic development.

Economic Development Tax Abatement or Property Valuation Exclusions

A political subdivision may “abate” or “exclude” all or a portion of its property tax on one or more parcels of real or personal property, including machinery, for economic development purposes. Abatements and exclusions are defined by a specific time period and dollar value being abated or excluded.  Abatements can be, but are not limited to: (1) an exclusion of a certain portion of property taxes; (2) a rebate of property taxes to the property owner; (3) a reallocation of taxes to pay bondholders; (4) a reallocation of taxes to pay for public infrastructure costs; OR (5) a deferment of property taxes.

Tax Increment Financing (TIF) Districts

Tax increment financing (TIF) uses the increased property tax that a new development creates to finance the initial cost of development.  It is used to bridge the gap to help a development occur and to finance public infrastructure.  Two types of TIF districts exist: (1) Redevelopment; and, (2) Renewal and Renovation.  Each type of TIF District has to meet a different standard regarding the buildings within the proposed district that would be classified as “structurally substandard,” or, “blighted.”  Renewal and Renovation TIF Districts have a 15-year duration limit, rather than the 25-year limit for Redevelopment districts.

Contact: For more information about these districts, please read the Minnesota House of Representative’s website.

Improvement Loan and Grant Programs

A political subdivision can sponsor loan and/or grant programs to assist its citizens in preserving commercial, industrial, or residential properties. Commercial loans and grants can be used to sponsor façade improvements, assist with meeting building code requirements, and improve fire suppression systems to allow for second-story mixed use. Residential loans and grants can provide assistance for maintenance or larger improvements. Contact your local municipality to inquire about available loan and grant programs and their requirements.

 

Nonprofit Incentive Programs

Local Initiatives Support Corporation (LISC)

The Local Initiatives Support Corporation (LISC) helps struggling neighborhoods convert into healthy and sustainable communities. They offer loans and grants, along with policy support, and technical and managerial assistance to facilitate development projects, including historic preservation.  Currently, there are two LISC offices in Minnesota: (1) Twin Cities LISC; and, (2) Duluth LISC.

 

(!) TIP—Interested in starting one of these programs in your community?? When designing any of these programs in your community, make sure to include provisions for adherence to local historic and infill design guidelines.  If local design guidelines are not in place, use those developed by neighboring communities or obtain model design guidelines from the Minnesota State Historic Preservation Office.  Design guidelines will ensure that your community receives a quality project, and a rehabilitated historic building, for the investment.