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Businesses can finance new or expansion of land, buildings, and equipment through the use of Industrial Revenue Bonds which are issued by municipalities, cities, counties, towns or villages.
Under IRBs, companies pass the title of the real or personal property to the city, county or municipality as outlined in the lease-purchase agreement. In turn, it will issue the revenue bonds needed to finance the qualified project, retain ownership of the property and lease it back to the company for the duration of the agreement.
Since the property title is held during the lease, the property acquired with the bond proceeds is tax exempt, which results in tax abatement for the company.
This incentive encourages redevelopment of blighted areas by offering 25 years of incremental real property tax abatement for “Urban Redevelopment Corporations.”
During the first ten years, Chapter 353 allows for 100% of new property tax increases to be abated, and only 50% in the remaining 15 years.
This incentive is designed to assist developers, business, and individuals with renovation and new construction projects. The tax abatement freezes the tax assessment in improvements to property at the pre-development level for 5 to 10 years.