Tax Increment Financing
What is tax increment financing (TIF)?
Tax increment financing, often called TIF, is a financial tool cities may use to assist development, which otherwise would not occur but for the use of tax increment assistance. The purpose of TIF is to create jobs, provide affordable housing, redevelop declining areas or clean up environmentally contaminated sites.
TIF may also be used to finance public infrastructure—such as streets, sewer, water or parking facilities—that is related to the development. In some cases, the developer would be required to pay for this infrastructure through special assessments or other charges. In other cases, all taxpayers would pay through general city taxes.
The City's Business Subsidy Policy outlines the criteria that the City Council considers in a request for TIF or assistance for new development.
How does TIF work?
When a city creates a TIF district, the assessed property values in that district are "frozen" at their current level. As development occurs and property values rise, the city captures the increased local property taxes (city, county, school, and special taxing jurisdictions) to pay for any public improvements or to help finance development and redevelopment projects. State property taxes and referendum taxes are not captured within TIF.
Do Victoria residents pay taxes that are used by a TIF project?
No. Taxes paid by a development continue to be directed in the same manner. Residents do not pay taxes that are used by a TIF project. Only new dollars created by the project can be used to assist the project. In some cases, existing taxpayers may be relieved of financial burdens if additional public improvements are financed with the increment created by a project.
What can TIF funds be used for?
TIF funds can only be used for land acquisition and physical improvements, such as infrastructure, buying land or demolishing buildings. TIF funds cannot be used for loans to businesses for working capital, machinery or equipment.
What is a TIF plan?
A TIF plan is a planning document, which describes why the area is eligible to be a TIF district and describes the proposed projects and activities. The TIF plan also includes the estimated tax increments to be generated and the proposed use of the tax increments. Specific terms for assistance to a private developer are not included in the TIF plan; these terms are part of a separate development assistance contract known as a TIF agreement.
- Overview of Tax Increment Financing (PDF)
- Summary of Tax Increment Financing in Minnesota (PDF)
- 2018 Disclosure of Tax Increment Districts-Summary Publication (PDF)
Existing Tax Increment Financing Districts
A Tax Increment Financing Districts PDF Map is available as well as an interactive Tax Increment Financing Districts Layer on a GIS map. Learn more about existing Tax Increment Financing Districts within our community below.
- Established in 1990 to help with land acquisition and public improvements to facilitate the development of the Park Vista townhomes
- Decertified in 2015
- Development District 1 and Tax Increment Financing District 1 (PDF)
- Established in 1997 to help fund the construction of Stieger Lake Lane Bridge and land acquisition and site preparation for the Stieger Lake condominiums
- Decertified in 2016
- Amendment 1 of Development District 1 and Amendment 1 of Tax Increment Financing Districts 1 & 2 (PDF)
- Created in 2002 to fund new streets in the downtown, streetscaping and burying powerlines
- Will decertify in 2028
- Tax Increment Financing Plan, Districts 1-3 (PDF)
- Created in 2008 to develop a grocery store in Victoria
- Will decertify in 2036
- Contract for Private Development-11/13/08 (PDF)
- Created in 2016 to help facilitate the redevelopment of the Mainstreet building and construction of the public parking lot along Rose Street
- Will decertify in 2043
- Tax Increment Financing District 5-Area Coverage Test Map (PDF)
- Tax Increment Financing Plan, Districts 1-5, Rose Street (PDF)
- Created in 2016 to assist in the redevelopment of the Victoria Flats apartment building and the Stieger Lake Lane improvements
- Tax Increment Financing, Victoria Flats, Presentation to City Council on 10/24/2016 (PDF)
- Tax Increment Financing District 6 Map-Victoria Flats (PDF)
- Tax Increment Financing Plan-Victoria Flats (PDF)
- Created in 2019 to assist in the development of Bethesda Cornerstone Village community living for active seniors and independent adults with a developmental disability
- Will decertify in 2046
- Tax Increment Financing Map for District 7-Bethesda Lutheran Communities, Inc. (PDF)
- Tax Increment Financing Plan for District 7-Bethesda Lutheran Communities, Inc (PDF)
- Tax Increment Financing, Bethesda Lutheran Communities, Inc,,: Presentation to City Council July 8, 2019 (PDF)
- Created in the fall of 2022 to help facilitate the development of the first phase of Downtown West
- Will decertify in 2050
- Tax Increment Financing District 8 Map-Downtown West Phase I (PDF)
- Tax Increment Financing Plan-Downtown West Phase I (PDF)