TEDDs, or targeted economic development districts, are areas where tax incentives are available to developers. Often, TEDDs are in an area that’s ripe for development but lacks key infrastructure like roads.
And with one single mile of roadway coming in at two to five million dollars to construct, those costs keep developers from investing in cities like Lockwood, Montana, near Billings. The Lockwood TEDD is well-located for commercial development. Next to an interstate, alongside a rail line, and near an airport, the area could feasibly house a number of businesses.
With Montana’s population increasing, jobs are a top priority. The Lockwood TEDD is primed to pump new jobs into the economy by recruiting high-value industries to the area. But building a network to access key transportation services isn’t a cheap proposition. Extending water, sewer and storm drainage into the Lockwood development park is just one step to encouraging more development.
Those pricey roads we talked about are also needed. Not only will the Lockwood TEDD need improvements to existing roads, it will also need entirely new roads and connections to the Billings Bypass. And finally, rail sidings and spurs were needed to connect to the railroad nearby.
All up, these costs start to mount quickly for a developer. But, with some assistance in the form of tax increment financing, municipalities can sweeten the deal for developers. In turn, the developers bring new industry, jobs and economic vitality to an area. Of course, this is all in theory. TEDDs and TIF funding have their critics – stay tuned for more on TEDDs, TIFs, URDs and economic development.