Development Incentives

Lakeville strives to be competitive in attracting and retaining a diverse business economy. Lakeville’s development toolbox includes incentives at the City, County and State level and can assist eligible businesses with the incentives and support they need to thrive in our growing community.

City Incentives for Development 

The Lakeville Business Subsidy Policy (PDF) defines the goals and objectives the City of Lakeville and Economic Development Commission have established in order to provide public assistance for private development or redevelopment activities. These public incentive programs include Tax Increment Financing (TIF) and Tax Abatement.

The City of Lakeville is granted the power to utilize Tax Increment Financing (TIF) by the Minnesota Tax Increment Financing Act. TIF is a public financing tool available to municipalities in Minnesota to encourage desirable development or redevelopment that would not otherwise occur but for public assistance. There are several types of TIF Districts, but the City of Lakeville most often has created Economic Development TIF Districts which collect tax increment for eight years.

How does it work?

When a TIF district is created, the county auditor certifies the current tax capacity of the property as the TIF district's original tax capacity (the base valuation). During the life of the TIF district, all taxing authorities (city, county and school district) will continue to receive the original tax rate applied to the base valuation. 

Then as the property increases in value, the increase above the original tax capacity is "captured" and that tax increment is used to pay debt or other financial obligations necessary to complete the project on a “pay-as-you go” basis. 

A TIF district is closed when all obligations are met, meaning all taxing authorities then benefit from the new, higher property valuation and tax base.

Does my project qualify?

If a development project is interested in pursuing TIF, the project will need to meet the City’s established goals and objectives for economic development, as well as meet state statute requirements and pass the “but-for” test.

The Lakeville Tax Increment Financing Policy (PDF) defines the fundamental purpose of TIF in the City. This policy reserves the right to approve or reject projects on a case-by-case basis, taking into consideration established policies and procedures, project criteria and demand on City services in relation to the potential benefits from the project. Of note, meeting policy criteria does not guarantee the award of business assistance to the project. 

What’s the application process?

Interested parties are encouraged to contact Tina Goodroad, Community Development Director to discuss their project and its merits for TIF assistance. An application and nonrefundable fee of $500 is required for review. If preliminary approval is granted, the applicant submits the final application fee of $5,500 and a Tax Increment Financing Plan, along with all necessary notices, resolutions and certificates are prepared by City staff and/or consultants. 

State Incentives for Development

The Minnesota Department of Employment and Economic Development (DEED) offers business financing programs that may be able to help with your project.

The Minnesota Investment Fund (MIF) provides financing to help add new workers and retain high-quality jobs on a statewide basis. The focus is onMinnesota Investment Fund funding map Opens in new window industrial, manufacturing and technology-related industries to increase the local and state tax base and improve economic vitality statewide. 

Companies must work with the City to apply to DEED to receive a MIF award. To receive a MIF loan, a business must, at minimum, meet the requirements outlined on

The size of an award depends on a variety of factors including (but not limited to) Minnesota’s competitiveness, local economic conditions, job creation and wage levels. All expenditures and hiring related to the MIF assistance may not occur until funding has been formally approved.

Dakota County Incentives for Development

The Dakota County Community Development Agency (CDA) is a local government agency whose mission is to improve the lives of Dakota County residents and enhance the economic vitality of communities through housing and community development.

The Dakota County CDA administers a Redevelopment Incentive Grant (RIG) Program that has awarded, to date, over $13 million to 64 redevelopment projects and 27 planning activities. The City of Lakeville is an eligible applicant for the program.

The maximum grant award for plans is $15,000 and the maximum grant award for projects is $250,000. The RIG Policy and Procedures Guide (PDF) provides comprehensive information on the program’s purpose, eligibility criteria and requirements.