City of Melrose

Business Subsidy / Incentives

Business Subsidy:

The City of Melrose adopted its original Business Subsidy Criteria Policy following the proper public hearing on September 2, 1999 and then amended it on July 17, 2003. The Melrose Area Development Authority (MADA), an Economic Development Authority, also adopted the same policy following a public hearing on September 13, 1999 and amended it on June 23, 2003. Since that time, a number of different business assistance tools have been introduced which warrant different criteria be considered for their implementation and utilization. MADA is recommending that updates to the policy also be considered and that the amended Business Subsidy Criteria Policy consolidate all forms of assistance adopted by the City after a public hearing. In addition, MADA will utilize the City's Business Subsidy Criteria Policy for its recommendations to the Council thereby eliminating the need for the MADA Business Subsidy Criteria Policy and hereby rescinding it. The City's Business Subsidy Criteria Policy for Granting Subsidies under the JOBZ Program originally adopted May 19, 2004 is incorporated into this amended Business Subsidy Criteria Policy and the MADA Business Subsidy Criteria Policy for Granting Subsidies under the JOBZ Program adopted May 24, 2004 is rescinded. The following is the Amended City of Melrose Business Subsidy Criteria Policy as adopted on July 21, 2011, following a public hearing held July 21, 2011.


Exhibit A (JOBZ): 

Whenever the City of Melrose invests public funds or agrees to voluntarily forfeit tax or other revenue that benefit private development projects in a Job Opportunity Building Zone (JOBZ), those projects should create the greatest number of jobs possible that pay a living wage for the residents of the City and the surrounding region. City policy makers and economic development agents must keep the critical need for living wage full-time equivalent (FTE) jobs as a priority whenever public dollars are invested in a private business or development project. 


Exhibit B (Tax Abatement):

Since the property tax reform of 2001, local governments have been forced to develop new local financing tools for economic development. Tax abatement is one such financing tool set forth by the Minnesota Statutes, Sections 469.1812 to 469.1815. The City of Melrose (the “City") with the recommendation of the Melrose Area Development Authority (“MADA") will consider tax abatement requests on a case-by-case basis. This Tax Abatement Policy will set forth the basic information for persons involved regarding the eligible use, application process, and annual reporting process for anyone requesting abatement. For the benefit of interested parties, this policy will also outline the general procedure which needs to be followed to create tax abatement. It is the intent of this Policy to serve as both a procedural and informational guide for all interested persons.


Exhibit C (Tax Increment Financing - TIF):

Business Subsidies utilizing Tax Increment Financing (TIF) shall follow the requirements of Minnesota Statutes, Sections 469.174 - 469.1744, collectively the “TIF Act”.


Exhibit D (Revolving Loan Fund - RLF):

It is the purpose of this policy to establish a revised Revolving Loan Fund Program for the City of Melrose to provide gap financing to eligible creditworthy businesses for the expansion or modernization of existing facilities or for the construction of new ones. The Melrose Public Utilities Commission continues to commit Demand Side Management Set-aside Funds to finance this Revolving Loan Fund Program. Interest income earned on Revolving Loan Fund loans to businesses as well as the principal repayments shall revolve in the Program for future use.

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