In order to encourage development and economic growth in specific areas, many jurisdictions offer generous incentives for particular sites. Site Specific Incentives may be very lucrative to companies willing to invest in areas in need of redevelopment. Incentives may include such programs as Tax Increment Financing, Property Abatements, and Enterprise Zone benefits.
TIFs are a local financing tool that can be used to revitalize declining areas or redevelop blighted areas while improving the tax base of the areas. Depending on the jurisdiction, TIF dollars may be used for infrastructure, direct subsidies of commercial or industrial development, redevelopment and renovation projects, or job training. TIF fund grants are typically negotiated and are contingent upon the approval from the municipality/county and will often require an extensive application process, economic impact analysis, and meetings with the appropriate officials; sometimes public hearings may be required to finalize the incentive.
A taxing district may abate any portion of its taxes on commercial and industrial property. Tax abatements are negotiated, often requiring application, economic impact analysis, and meetings with the appropriate officials in each taxing district. Public hearings may be required to finalize this incentive. Property tax abatements can be available for the new improvements on a property, or for the entire assessed value of the property.
States may designate larger areas as zones with a suite of special incentives to encourage development. Often times, these areas may be called Enterprise Zones. Benefits may include sales tax exemptions on machinery and equipment or building supplies, utility tax exemptions, investment tax credits, job creation tax credits, and property tax incentives. These benefits and requirements will vary by jurisdiction.