Payment-In-Leu-of-Taxes (PILOT)

WHAT IS A PILOT?

Payment-In-Lieu-of-Taxes (PILOT) is an economic development incentive tool designed to assist with attracting, expanding and developing business enterprises targeted to contribute to Minden’s economic growth. The PILOT can enable a company to substantially reduce its tax burden for a period of years. Eligible companies can benefit from the PILOT by entering into an agreement with Industrial Development Board of the City of Minden (IDBM).

HOW DOES THE PROGRAM WORK?

In order to benefit from the PILOT program, the subject property (which may consist of land and/or improvements) must be titled to the Industrial Development Board of the City of Minden (IDBM). Because the IDBM is a quasi-governmental entity, its properties are exempt from local ad valorem taxes and/or sales taxes. This frees up the Industrial Development Board to negotiate a contractual tax payment schedule with the affected company for a period years to ensure that public bodies that are entitled to receive ad valorem taxes or sales taxes generated from the project receive SOME financial benefit.


The project is then leased back to the private company by the IDBM. The payments made by the private company under the PILOT agreement are used to satisfy the company’s newly negotiated and reduced tax obligations. The PILOT agreement benefits both the private company and the tax recipient entities receiving payments under the PILOT agreement.


ELIGIBILITY

Eligible projects generally include those involving the acquisition, construction and/or

substantial renovation of facilities suitable for manufacturing, research and development,

and other industrial purposes. Certain commercial projects, office facilities, tourist destination businesses, hotels, restaurants and multi-family or housing developments shall be included.


Any development project that is under construction, other than preliminary site preparation, or utility work, is not eligible to apply for or to receive a PILOT.


To be eligible for a PILOT, an applicant must own the property or have an option or other right to the purchase property under consideration.


FEES

A non-refundable $1,000 application fee must accompany all PILOT applications submitted to the IDBM.

The PILOT beneficiary must pay the fees of all professionals, including special counsel to the IDBM and the City in connection with the negotiation and implementation of the PILOT. The cost of these items can be recouped by including them in the project’s cost.


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