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HUTCHINSON ECONOMIC DEVELOPMENT AUTHORITY
The Hutchinson Economic Development Loan Fund is designed to provide
gap financing for businesses & industry starting up or expanding in
the city’s industrial park, although projects at other locations in
the city will also be considered. The primary focus of the program
is manufacturing and technology related businesses.
Eligibility
·
Businesses must be
located, or be willing to relocate, within the city limits of
Hutchinson.
·
Manufacturing,
assembly, warehousing, research & development facilities, call
centers & administrative processing centers are eligible.
Requirements
·
At least one job
created is required for every $25,000 in assistance provided.
·
Wages for jobs created
must be at least $9.30 per hour, exclusive of benefits.
·
Funds can be used for
land & building purchase, building construction, renovation and / or
expansion, machinery & equipment, working capital and inventory.
·
Immediate repayment of
the outstanding balance is required if the business relocates
outside Hutchinson.
Rates / Terms
·
Rates range from a flat
rate of 2% up to Prime + 3%, as determined by the EDA Board.
Typically rates will be similar to those available from a commercial
lender.
·
Loan terms up to 10
years are available.
·
Loan amounts up to
$150,000 are available.
·
Applicants creating a
significant number of jobs or paying higher wages may receive
preferential loan terms.
·
The EDA will typically
subordinate to other financing sources when needed.
Click here to download a copy of the
Economic
Development Loan Fund Application.
Contact
Contact the Hutchinson Economic Development Authority
at (320) 234-4223, or send an
email, for a
loan application and additional information.
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Tax Increment Financing
The Hutchinson Economic Development Authority is
willing to consider the employment of Tax Increment Financing (TIF)
for eligible projects. In a nutshell, the difference between a
property’s original property taxes and the property taxes due on a
property after it has been improved (called the “tax increment”) can
be captured and used to help finance the project.
In all cases the proposed project must pass what is
called the “but-for test,” meaning that unless Tax Increment Financing
is utilized, the project will not be economically feasible. In other
words: if the project can be done without TIF, then it is ineligible
for this assistance.
For economic development purposes, two types of Tax
Increment Financing districts are available: Economic Development
TIF districts for new developments and Redevelopment TIF
districts to help with the costs of renovating or replacing
substandard buildings.
Different rules apply to each type of TIF district (see
below):
Economic Development TIF District –
A 9-year district that can provide funds for land acquisition, infrastructure (street, water &
sewer, parking, etc.), grading & excavating and / or site improvements.
Primarily for industrial-type projects.
Redevelopment TIF District - A district that can go up to 25
years and will provide funds for the removal of blighting conditions
on a lot (sub-standard buildings, site clean-up, etc.).
Eligibility
Economic Development TIF
Redevelopment TIF
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Proposed district must contain existing “blighted”
development
-
At least 70% of the area must be occupied by
buildings or other improvements.
-
At least 50% of the buildings themselves must be
substandard, based upon an internal
inspection.
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A building is considered substandard if it would
cost at least 15% of a new building to bring the existing building
up to current building code requirements.
-
As long as the above requirements are met,
any type of project (commercial, retail, industrial) is
eligible.
Requirements
Economic Development TIF
Redevelopment TIF
Rates / Terms
If the project requires “up-front” financing, a loan
may be secured from a private lender, with the projected tax
increment being pledged to service the loan.
Economic Development TIF
Redevelopment TIF
Contact
For additional information about Tax Increment
Financing, contact the Hutchinson Economic Development Authority at
(320) 234-4223, or send us an
email.
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Job Opportunity Building
Zone
Job Opportunity Building Zones (JOBZ) are designed to
stimulate economic activity within certain geographical areas by
providing a number of state & local tax breaks for qualified
businesses.
Exemptions are provided for:
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corporate franchise tax
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state income tax for operators or investors –
including capital gains tax
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sales tax on goods & services used in the zone,
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property tax on commercial & industrial
improvements (but no exemption on land)
Additionally:
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An employment tax credit is provided for
high paying jobs.
Eligibility
-
Eligible businesses include those starting-up or
expanding within a designated Zone, businesses relocating from
other states and business relocations within Minnesota, provided
certain job creation requirements are met.
-
Businesses must locate within a designated JOBZ
zone.
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Retail businesses are not eligible.
Requirements
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Jobs created must pay at least 110% of the
federal poverty level for a family of four (including benefits
not mandated by law)
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Businesses relocating within Minnesota must
increase their total employment by at least 5 jobs or 20%
of their workforce, whichever is greater. These new jobs must be
maintained for the duration of the JOBZ zone.
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Businesses locating in a JOBZ zone must sign a
Development Agreement with the City.
Contact
For additional information, contact the Hutchinson
Economic Development Authority at (320) 234-4223, or send us an email.
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Tax Abatement
With Tax Abatement, the city rebates its portion of
property taxes back to the property owner who then uses it to help
offset development and / or redevelopment costs. Tax abatement is
simpler and less restrictive than tax increment financing, but it is
also significantly less powerful.
In addition, the availability of tax abatement is
limited – in any given year, for all economic development projects
taking place, the city can abate an amount equaling no more than 5% of
its current tax levy.
The Hutchinson City Council must approve all tax
abatements.
Eligibility
Requirements
-
The project must provide one or more of the
following public benefits: it must increase or preserve tax base,
result in job creation, redevelop blighted areas, and / or provide
services not currently available to the residents of Hutchinson.
Rates / Terms
Contact
For additional information about Tax Abatement, contact
the Hutchinson Economic Development Authority at (320) 234-4223, or
send us an
email.
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Downtown Commercial Rehabilitation Loan Program
The Downtown Commercial Rehabilitation Loan Program is
intended to provide an additional financial resource and incentive for
downtown property owners to improve their place of business. The goal
of the program is to help keep downtown Hutchinson a thriving and
attractive place for commercial & retail activity.
Eligibility
-
Properties must be located in downtown Hutchinson
within the following boundaries: the Crow River on the north,
Fourth Avenue on the south, properties with frontage on the west
side of Franklin Street and the east side of Hassan Street.
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Total debt (including this loan) secured by the
property cannot surpass 100% of the assessor’s estimated market
value, or the appraised value of the property, whichever is
greater.
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Eligible exterior improvements include windows &
doors, painting & other façade improvements, roofs, foundations,
lighting, accessibility improvements, parking lots and
landscaping.
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Eligible interior improvements include general
remodeling, HVAC, electrical, plumbing and handicap accessibility.
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Funds cannot be used for security systems,
equipment or furniture.
Requirements
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No more than 30% of the loan can be used for
interior improvements other than heating, electrical, plumbing,
insulation, handicap accessibility and asbestos abatement.
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Loans are immediately due if the property is sold
or otherwise transferred.
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All owners are must join in the application.
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All loans must be secured by a mortgage on the
property.
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A personal guarantee is also required.
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There is a $200 application fee.
Rates / Terms
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The minimum loan amount is $3,000
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The maximum amount available is $65,000 per lot for
up to two lots, or 10% of the total project cost, whichever is
greater.
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No more than $130,000 is available for any
particular project.
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Interest rates are fixed.
Two options are
available for interest rates and loan terms:
or
Click here to download a copy of the
Downtown Commercial
Rehabilitation Loan Program Application
Contact
Contact the Hutchinson Economic Development Authority
at (320) 234-5652, or send an
email, for a
loan application and additional information.
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Downtown Storefront Revitalization Matching Grant
The Storefront Revitalization Grant Program is intended
to offer dollar-for-dollar matching funds for property owners in the
downtown area so they can make exterior improvements and generally
improve the “curb appeal” of their property.
Eligibility
-
Properties must be located in downtown Hutchinson
within the following boundaries: the Crow River on the north,
Fourth Avenue on the south, properties with frontage on the west
side of Franklin Street and the east side of Hassan Street.
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Applicants must provide a personal
dollar-for-dollar match for any grant funds awarded, although work
done personally by the property owner can count as the match.
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Only one grant per property will be awarded during
any given 5-year period.
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Additions, new buildings, decks and playground
equipment are not eligible.
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Eligible improvements must be viewable from the
public right-of-way and may include windows & doors, painting &
other façade improvements, exterior lighting and landscaping.
Requirements
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Any improvements must be completed and inspected
prior the disbursement of any grant funds.
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Work cannot commence until the grant is approved
and should be completed within 120 days, weather permitting.
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Invoices must be submitted in order to receive
reimbursement.
Rates / Terms
Click here to download a copy of the
Downtown
Storefront Revitalization Matching Grant Application
Contact
Contact the Hutchinson Economic Development Authority
at (320) 234-5652, or send an
email, for a
grant application and additional information.
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Downtown Sign & Awning Grant
This program is intended to provide property owners
with a resource and incentive to add, improve and / or replace signage
& awnings in the downtown area.
Eligibility
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Properties must be located in downtown Hutchinson
within the following boundaries: the Crow River on the north,
Fourth Avenue on the south, properties with frontage on the west
side of Franklin Street and the east side of Hassan Street.
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Funds can be used only for the repair, improvement
or replacement of signs & awnings.
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Only one grant per business will be awarded.
Requirements
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Businesses who lease space must get written
approval from the owner of the property.
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Work cannot commence until the grant has been
approved, and should be completed within 120 days, weather
permitting.
Rates / Terms
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Grants range in size from $500 to $2,000.
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Improvements must be completed before any grant
funds can be disbursed.
Click here to download a copy of the
HCDC Sign and
Awning Grant Application
Contact
Contact the Hutchinson Economic Development Authority
at (320) 234-5652, or send an
email, for a
grant application and additional information.
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