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Economic Development


Love the Opportunities.  Love the Progress.  Love the Possibilities.

There's a reason why our community is always bustling.  The people of Luverne support local businesses - old and new - and our city offers a variety of benefits and incentives to commercial interests.

We make the success of your business our business. 

Helping businesses in Luverne grow and flourish is a major focus of the Luverne Economic Development Authority.  The LEDA is dedicated to helping foster the city's economic base to improve the quality of life for its citizens and business community.  Through many continuing programs and projects, the LEDA creates opportunities for businesses to succeed.  Encouraging community revitalization and promoting economic opportunity for all segments of the population is a key component in ensuring a high quality life.

Professional Business Consulting

The Small Business Development Center provides one-on-one relevant, realistic and sound advice you can trust, in areas such as:

•  Access to capital and loan packaging
•  Financial Analysis and assessment
•  Bookkeeping
•  General Marketing and reserach
•  Business feasibility analysis
•  Start-up assistance
•  Business Plan development
•  eCommerce / Website review and analysis
•  Succession and strategic planning

 Are you ready to get started?  CLICK HERE to sign up for one-on-one professional business consulting.

Financial Resources and Incentive Programs



Click on the links to go to:  


Revolving Loan Fund / Gap FinancingTax Increment FinancingTax Abatement
 Historic Facade Improvement Program

Energy Incentive Loan & Rebate Program

Economic Development Utility RateDemolition ProgramEmployee Relocation Assistance / Discounted Residential


The Luverne Economic Development Authority has a number of financial resources available to assist business and industry.  In this section you will find some general information on how economic development projects are funded along with a summary of the financial resources available.

A Note on How Economic Development Projects are Financed:

The first rule of economic development finance is that “There is no free money.”

The days of grants for economic development projects, if they ever did exist, are few and far between. Today economic development projects are funded primarily through owner equity and private bank financing, with economic development funds available for “gap financing.”

Many times, particularly with economic development projects, owner equity and conventional bank financing do not provide all the funding that is required. Typically, this occurs because the bank has lending limits they must adhere to, there is inadequate equity, there is insufficient collateral or the business cannot afford market interest rates and/or term requirements.

Generally speaking, economic development financial tools exist to fill this funding “gap.”

Typically, an economic development financing deal looks like this:



Owner Equity                    Must be present in the package – should be at least 10% of the entire financial package. More may be required, and more is better.
Bank LoanAnother required element in any financial package – could be anywhere from 40% to 90% of the project’s funding.
Gap FinancingOnly comes into play when needed, and only in the amount necessary to make the deal work. Could potentially come from multiple sources and represent up to 50% of a project’s funding.


We do not compete with banks and in no instance will economic development financing replace bank financing. Public financing exists solely to supplement private financing in order to move worthwhile economic development projects forward.

A number of resources are available to help finance economic development projects.  In this section you can access details on program requirements, eligibility, criteria, and other helpful information.

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The Luverne Economic Development Authority Revolving Loan Fund is designed to provide gap financing for businesses.  The purpose of the RLF is to promote job creation and job retention, stimulate private investment, and to support, diversify, and strengthen community vitality by providing financial assistance to new and existing businesses in Luverne.




  • Businesses must be located, or be willing to relocate, within the city limits of Luverne.
  • Luverne Area Chamber must be in support of the LEDA's assistance.
  • RLF shall act as gap financing not to exceed 20% of the total project cost.
  • Applicant's equity participation must be atleast 10% of the total project cost.
  • Loan amounts shall range from $5,000 to $25,000 or an amount at the discretion of the LEDA with funding level dependent on funds available.




  • At least two livable wage jobs shall be created or maintained.
  • Wages for jobs created must be at least $10.19 per hour, exclusive of benefits.
  • Funds may be used for, but not limited to: land & building acquisition, building construction and/or expansion, machinery & equipment, and facade improvements.
  • Funds may NOT be used for, but not limited to: inventory and working capital, general remodeling, refinancing debt, and delinquent taxes.
  • Immediate repayment of the outstanding balance is required if the business relocates outside Luverne.




  • Rates are 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 $25,000 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.


If you are interested in a Gap Financing loan, please contact Holly at 507-449-5033 or email

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The Luverne 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.


TIF is used for two basic purposes:


  • To induce or cause a development or redevelopment that otherwise would not occur - for example, to convince a developer to build an office building, retail, industrial, or housing development that otherwise would not be constructed.  To do so, the increased property taxes are used to pay for costs (ex. land, acquisition, or site preparation) that the developer would normally pay.

  • To finance public infrastructure (streets, sewer, water, or parking facilities) that are 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.


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 and redeveloping blighted areas.


Different rules apply to each type of TIF district (see below):


  • Economic Development TIF District – An 8-year district that can provide funds for land acquisition, infrastructure (street, water & sewer, parking, etc.), grading & excavating and / or site improvements. Primarily for manufacturing and other industrial-type projects.

  • Redevelopment TIF District – A district that can go up to 25 years and will provide funds for the removal of blighted conditions on a lot (sub-standard buildings, site clean-up, etc.).



  • The Luverne City Council, following a public hearing on the proposed project, must approve all TIF Districts.
  • Economic Development TIFIndustrial, warehousing, research & development and call centers are eligible.
  • Redevelopment TIF • 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. 
  • 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.




  • Economic Development TIF • The TIF district must promote new employment, tax base or retain business in the state.
  • Redevelopment TIF • At least 90% of the tax increment generated must be used to correct the blighted conditions.




  • All TIF districts in the City of Luverne will be set up on a “pay-as-you-go” basis – meaning that tax increment will flow back to the developer in semi-annual payments.  The developer will pay the up-front costs with their own funds.  The increments, then, are used to reimburse the developer for these costs. 
  • If the project requires financing for the up-front, a loan may be secured from a private lender, with the projected tax increment being pledged to service the loan.
  • Economic Development TIF • Districts can provide tax increment for up to 8 years.
  • Redevelopment TIF • Redevelopment TIF district can provide tax increment for up to 25 years.


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Tax abatement is a tool  used for development purposes.  It is a tax rebate rather than an exemption from paying taxes.  The City of Luverne and LEDA use this as an additional tool to lower initial start-up, relocation, or retention costs over a certain time period.  Abatement levels are determined by participating jurisdictions (City, County, and School District).

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, and is quite useful for smaller projects.

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 10% of its current tax levy.

The Luverne City Council must approve all tax abatements.


  • Tax abatements can be provided for any type of property.                                                                 



  • 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 Luverne.


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To support the revitalization of Main Street and downtown Luverne, the city has created a program to encourage businesses to make history again, restoring buildings as closely as possible to their historic appearance from 1878-1948.

The Historic Facade Improvement Program offers FREE technical assistance for architectural design services as well as financial assistance in the form of loans and grants. As a part of this program, owners can drastically reduce the cost restoring a building to its historic appearance with funding assistance as follows:

35% low interest loan

• 35% grant

• 30% owner contribution




  • Eligible properties must be located within the eight-block downtown area of which the boundaries are Estey on the west, Spring on the east, and include frontage on Main Street (to the alley) 




Funds may be used for, but not limited to:
  • Façade materials and construction
  • Windows and Doors
  • Awnings
  • Signage
  • Lighting
  • Landscaping




  • The interest rate will be at a rate determined by the LEDA.
  • Loan terms up to 7 years are available.
  • Loan amounts up to $21,000


Click HERE to download the Historic Facade  improvement Program Application.

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Loans up to $5000 offered at 0% interest for 5 years are available to businesses for qualified Bright Energy Solutions projects. 



Eligible projects include lighting for new construction, lighting retrofits, heating and cooling, motors, pumps, VFDs and custom incentives.




As long as your project qualifies for Bright Energy Solutions rebates, it will be eligible for the loan program.  We can send a specialist directly to your business - at no cost to you-  to find the best energy efficient upgrades for you!




All loans are 0% interest

$1000 loan    1 Year                      

$2000 loan    2 Years       

$3000 loan    3 Years              

$4000 loan    4 years    

Monthly payments can be added to the customer's utility bill for added convenience.




Missouri River Energy Systems (MRES) and Luverne Municipal Utilities


Clean Energy Resource Teams

  • CERTified Campaigns
  • Rebates for Residents and Businesses: e.g.- Programmable Thermostats, VendingMisers, Solar Thermal, etc 


Center Point Energy       

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The City of Luverne benefits from a municipally owned electric utility which provides low electric rates. The Economic Development Utility Rate is an additional tool used by the LEDA to reduce costs for a business locating in Luverne beyond the existing low rates.

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The purpose of Demolition Program is to beautify the City of Luverne through demolition of irreparable and substandard structures, both commercial and residential.  Grants of $5000 (Commercial) and $3000 (Residential) are available to assist in the cost of removal of substandard or irreparable structures. 



Applicant must make the case that the removal of the substandard structure will improve the overall value of the property.




The following items must be submitted with an application: 

•  Review of Building Demolition Code and pre-approval from the Building Official

•  Plot plan of property which must include legal description, street address, and lot dimensions

•  Copy of property's most current estimated market value, including a breakdown of land value and structure value 

•  Copy of Purchase Agreement or Deed showing total acquisition cost and proof of ownership

•  Bid/Estimate for demolition and disposal costs from contractor

 Click HERE to download an application for a demolition grant.

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Employee Relocation Assistance may be provided to key personnel to assist in moving costs.  Discounted Residential Lots are also available for key and regular employees in our new residential developments.  We will strive to create a custom program and assistance package that specifically meets the needs of your start-up or expanding business!  Click here  to see the available lots. 

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(507) 449-2388, 305 E. Luverne St, PO Box 659, Luverne, MN 56156