Minnesota Economic Development

Published April 1, 2000  | April 2000 issue

Number of local economic development organizations:

At least 300. A search of a current online DEED database found 215 cities with a population over 1,000 reported having an active economic development authority (EDA). A sample of the remaining 500-plus cities with a population under 1,000 indicates that another 50 to 70 very small cities likely have a formal EDA. Another two dozen counties with EDAs were identified, along with more than 40 quasi-public and nonprofit organizations representing a variety of city, multicity and regional interests. Chambers of commerce were not counted.

Unique economic development tools or incentives:

The state has designated six cities-Breckenridge, Dilworth, East Grand Forks, Moorhead, Ortonville and Duluth—in its Enterprise Zone Program, which offers a variety of business tax credits for businesses that create investment and job creation or retention in these locations.

Popular assistance tools or incentives:

Tax increment financing (TIF) is widely used, as more than 400 separate local government organizations in the state managed 1,617 revenue-generating TIF districts in 1998. Many communities also use revolving loan funds, with more than 237 in operation as of 1996.

Other assistance tools or incentives:

There are upwards of a dozen state-level assistance programs, including the Minnesota Investment Fund, Minnesota Job Skills Partnership, Rural Challenge Grant Program, Microenterprise Assistance Grants Program, Capital Access Program, Small Business Development Loan Program, Tourism Loan Program, Redevelopment Grant Program, Small Cities Development Program, Minnesota Export Finance Authority-Export Loan and the Enterprise Zone Program.

Cities also have fairly wide latitude in customizing incentive packages, including such things as build-to-suit construction incentives, small business incubators, legal and accounting services, and buy-downs for land, lease, interest and utilities.


In 1984, less than 2 percent of the state's property tax base was in TIF districts. By 1991, it hit more than 6 percent and has floated between 6 percent and 7 percent ever since.

Related articles:

fedgazette, July 2000
Local Economic Development, Part II