Democracy on the Front Lines
City Administrator’s Blog
Walter Denton
December 18, 2007
At the December 3 City Council meeting, a resolution was approved to expand the City’s existing Tax Financing District to connect to the Rasp Farm property. The action was to pursue an alternative to the Southview Village residential subdivision that has been under consideration for several months.
There has been opposition to the proposed Southview Village and consensus has not been reached on the City Council on how to proceed. Among the concerns were the density of the project, increased traffic, overcrowding Laverna Evans School, and stormwater drainage. (Click here to the Southview Village concept plan.)
In response, staff began looking at options for resolving the issues with the Rasp Farm. One of the biggest problems with the Rasp Farm is that stormwater from I-64 runs through the property into the homes along Dartmouth. We wondered whether there is a way to alleviate the drainage problems without the negative aspects of the residential subdivision.
Which brings us to Tax Increment Financing (TIF). The City established a Tax Increment Financing District eight years ago along the Hwy. 50/Rte. 158 corridor, primarily to build infrastructure for an office complex. TIF is a tool to use future gains in taxes to finance the current improvements that will create those gains. When a public project such as a road or utilities is carried out, there is an increase in the value of surrounding real estate, and often new investment (new or rehabilitated buildings, for example). This increased site value and investment creates more taxable property,
which increases tax revenues. The increased tax revenues are the "tax increment." Tax Increment Financing dedicates that increased revenue to finance debt issued to pay for the project. TIF is designed to channel funding toward improvements in distressed or underdeveloped areas where development would not otherwise occur. TIF creates funding for public projects that may otherwise be unaffordable to localities.
The City is considering the expansion of the existing TIF area to include connecting properties through the Rasp Farm to Lincoln Avenue, and a formal process is required through the state government. To expand the TIF, property owners between the existing TIF district and the Rasp Farm must agree to join into the TIF district.
By incorporating this area into the existing TIF, the basic concept is to develop the front of the property into an office complex and the back into a water conservation area and park. This project would expand the existing TIF, would not add any additional residents to the area, would not impact any current residential property other than a small easement, would not add children into the school system and would greatly expand the schools’ EAV.
There has been a lot of negative publicity regarding Tax Increment Financing recently, mostly having to with eminent domain and retail projects. This project would not involve eminent domain and TIF funds would be used for infrastructure and preparing the site for development.
The City Council Resolution was just to hire a consultant to begin the review process of this concept plan. There are no drawings and nothing is finalized. It is possible the consultant will determine that the project is not feasible. However, we feel it is worth effort if we can address a major drainage problem. If the concept does not work out, the Southview Village proposal is still on the table and can be voted on by the City Council.
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