Laserfiche WebLink
vest large amounts of mo^e+• fo: such think ~ as. ~i -front <br />cash to start the project, a reali<'ic plan, cct^'-ac is ~~:th <br />reputable developers, the sale o: ;-~unlc;pa' r'OnG` ar.G c <br />dedicated follow through--all before am• real results are <br />seer.. <br />It is also a mistake to assume that TIF is the only source <br />of subsidies that your city tia•ill need. As interest ; ales have <br />shot into double digits, the capitalized value of TIF <br />revenues has fallen. For instance, ~'h ~~00~ OOOt m t annual <br />about seven percent, a projected <br />revenues for the trust fund could be capitalized by a bond <br />sale of about 52.5 million. h1'ith interest rates now at 14 <br />percent, a bond sale may yield only 51.3 million. If a city <br />~+•as hoping to use that 52.5 million to finance a 400-car <br />parking garage, it will novr need to find 51.2 million from <br />some other source. <br />What to do? Start looking at such federal programs as <br />UD.AG, Community Development Block Grants, or in- <br />dustrial development bonds; state programs if you have <br />them; and more money from users or developers. Be <br />prepared for the long haul, or your infatuation tirith tax <br />increment financing will turn out to be just puppy love. <br />Where Do I Do It? <br />Those states that permit tax increment financing do so <br />through enabling legislation. If your state does not have <br />enabling legislation for TIF, b}r all means get some in- <br />troduced and enacted. <br />Enabling legislation will establish the ground rules for <br />the location of TIFs. Most state legislation says that a TIF <br />must be in a "slum" or'blighted" area, or in a "redevelop- <br />ment" or "enterprise" district. The need to correct the con- <br />ditions in these areas supplies the public purpose for tax <br />increment financing. However, if you have anything to do <br />with drafting this legislation, make sure that terms like <br />redevelopment or enterprise district are used instead of <br />slum or blighted area. Why give a redevelopment project <br />an additional stigma by officially calling it a "blighted <br />area," v+•hen it's possible to get the legislature to call it an <br />"enterprise district"? <br />Most state legislation will require that the districts where <br />TIF is used are marked by deteriorated, dangerous, or <br />unhealthy conditions. Besides the more obvious physical <br />or social manifestations of these conditions, the enabling <br />legislation may find it necessary to provide for the allevia- <br />tion of: defective street layouts; faulty lot layouts (in rela- <br />tion to size, adequacy, accessibility, or usefulness); tax <br />delinquency; and a diversity of o~+'nership (or any defec- <br />tive or unusual title conditions that prohibit an easy <br />assemblage of land}. <br />It ovill be up to individual cities to make a finding of <br />these conditions, based on sound evidence. Although such <br />a finding is legislative in nature, it must be reasonable and <br />not arbitrary. Evidence must be carefully marshalled and <br />The F.45.4Semo is a monthly publication for suhscrbers to the Ptannirg Advisory <br />Service. a s:wbscription research service of the .4me:ican Planning Pssociation: <br />lsrae: S:e1;-:-.an. Eseuu!ive Director; Frank S. So. Dee uh• Executive Director. David <br />R 1^~raa, Director of Re~eareh. <br />Th<_ F.=.j.`.:~mo is produ:ed a: APA: Syh~ia Le~~i~. rc^:,ca!ionsDuecto:, Grgon' <br />!.cats:ini, Tho^..as P. Scni:F.. Editors; 3a^'~es Peters, r+d^;e Ro:hblaa, ,,is~a:ant <br />GGI:OrS. <br />entered into the offi::a, recc~rc T hip careful and profes- <br />sional approach bet:ir- ~..:~:^~ the determination of ~+~here <br />to locate the TIF district..A ~+-ell-supported and ~+•ell- <br />reasoned finding ~+-ili dote: mine the tone and direction for <br />everything that follo~+'s. <br />The boundaries for the district do not have to be dray+'n <br />like a piece of s~+'iss cheese.. ~+•ith a parcel excluded here and <br />there because it down"t happen to be deteriorated. A sound <br />building or parcel ma}~ be included within a TIF area, and <br />perhaps even condemned, if it is necessar}' to the overall <br />redevelopment of the area. On the other hand, a TIF <br />district may not arbitrarily reach out to include sound <br />areas just to enlarge the tax base. <br />An implicit condition of TIF-one that is sometimes <br />overlooked-is the market potential of the district. If there <br />isn't a market for development, then there won`t be enough <br />potential private im•estment to get the TIF cycle started. <br />Therefore, it's a good idea to have some market analysis <br />made early in the process. Parcels that have market poten- <br />tial must be included in the district. Otherwise, your city <br />will find itself giving a party to which nobody comes. <br />How Do I Do It? <br />Let's start with the assumption that your state already <br />has TIF enabling legislation. ~~'ith some variation among <br />states, the following steps should be taken: <br />1. Creation or appointment of a redevelopment <br />agency. The cit}' council, in some cases, actually <br />maybe the redevelopment agency .The question of <br />whether to create a new agency or appoint the city <br />council is one that should be v~~eighed carefully and <br />dispassionately, and should reflect the individual <br />conditions of each city. <br />2. An official finding of the need for redevelopment, <br />and a delineation of the project area. As v`'e in- <br />dicated in the section "Where to Do It", these <br />findings must be vaell supported, including both the <br />conditions that require redevelopment and a <br />reasonable potential to actually do so. <br />3. Start-up and staffing of the redevelopment agency. <br />The first question is ~+•hether to use existing staff or <br />to hire neHr staff. In order to make this decision, the <br />agency must first define its objectives so that it can <br />find the staff most competent to achieve those <br />objectives. <br />4. Creation of the redevelopment trust fund that will <br />receive all future tax increments. 1n order to avoid <br />possible litigation, this step needs to be coordinated <br />and approved by all the taxing authorities that will <br />contribute to the trust fund. <br />~. Adoption of an official redevelopment plan. This <br />Copyright _ 1?53 by American P;an^.ir.g Association. 1313 E. 60th St., Chicago, <br />1L 60631. The American Ptaar.ing Also=ia!ion has headq;:a:tets offices a! 1776 <br />- ir.g'on DC 20036. <br />:assachcse¢s .Ave.. '~.t1'., ~'; <br />.4t1 res~:. rd. Ke par: of :r.._ ....~.., r: rnap be :crrrc..:ed or ut`.ized in <br />an}.l ocm c' b;- am r..eans. c ..c o e:h. n cai. i.^c ..t -... - cc, :: Eng. <br />g ..^r r;. am rfc._ rz~ca-dr:: s;>;e •., :.. _ r..._ssion <br />record:n ~..~ <br />in ..... ^g frt.., .ne .4mc;,_~.......... ^g . ssoaa!ien. <br />