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Economic Development Districts. The creation of economic development districts has caused controversy. Under the current law, there are three separate justifications for creating economic development districts: to discourage employers from leaving the state, to add jobs to municipalities, and to preserve and enhance the tax base. All of these purposes are crucial to central cities in several ways: they provide jobs and real estate development in depressed areas where they are needed most; they allow cities to respond to legitimate business expansion; and they enhance the property tax base. Unfortunately, suburban communities have used economic development districts to assist in the development of vacant land, which is prime development real estate that might have been developed without assistance. Developers expect that they can get tax increment subsidies from many suburban communities. They frequently induce bidding wars between cities that ultimately increase the public costs of development. An example of how developers shop around for the best deal can be illustrated with the Excelsior-Henderson motorcycle plant in Belle Plaine. The company owners, who had never built a motorcycle, purchased the rights to the Excelsior-Henderson Motorcycle name with the intent to produce the motorcycle again (Feyder, 1996). The company owners contacted various communities, looking for a site on which to build their factory. In July 1996 there were four Minnesota cities and three Ohio cities on the list of possible locations (Phelps, 1996). Belle Plaine, the hometown of the company owners, won. The owners raised equity for development of the plant by issuing stock, loans from the State Department of Trade and Economic Development (DTED), and tax increment assistance from the city of Belle Plaine (DePass, 1996). The company was supposed to start production in December of 1998 but didn't start until early in 1999 (Tevlin, 1999). In September of 1999, the company cut 97 jobs from its workforce, and in October of that year it defaulted on the DTED loan (Kennedy, 1999, September and October). High manufacturing costs and slow sales were reasons given for its financial 21