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Thread: ABC's of TIF's (tax increment financing)

  1. #1
    Cyburbian donk's avatar
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    ABC's of TIF's (tax increment financing)

    Had an interesting conversation with a person today about Tax Increment Financing and its potential for use in my City. I had to play itr coy as I am not totally sure I understand what it is or how it is implemented as it is a new concept here.

    Can anyone point me to a definitive article or good examples related to infrastructure mega projects or give a really good description of what it is?
    Too lazy to beat myself up for being to lazy to beat myself up for being too lazy to... well you get the point....

  2. #2
    Cyburbian
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    Tucson's downtown TIF redevelopment

    It's just getting going for having been in the works for years and will be in the works for another decade. They say $125 million in TIF funds, but I think the state legislature may have extended the term from 10 to 30 years, thereby offering up a huge leverage incentive for businesses, developers. In addition to over 1,000 units of new residential development, highlights include a multi-museum culture and arts district and a possible 12,000 seat arena and a possible convention center/hotel expansion.

    Click on the financial reporting link at the following site.

    http://www.tucsonaz.gov/rionuevo/start.html

  3. #3
    Cyburbian AubieTurtle's avatar
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    Atlantic Station in Atlanta is new mixed use development that was built on an old steel mill/brown field. TAD (for some reason we call it a TAD, Tax Allocation District, instead of a TIF like everyone else) funds were used for site clean up and infrastructure. It would probably qualify as a mega-project: http://www.atlanticstation.com/

    TAD funds are also going to be used for the Beltline, a twenty-two mile lightrail system and series of parks that will encircle the central city. Already money is being used to buy the park land and ROW for the transit component. http://www.beltline.org/

    I live near the boundry of two TADs. Unfortunately for the needs of my TAD, most of the money is being used for a city run homeless shelter, which kind of stretches the intent of the TAD. The other TAD that starts a block from my home is relatively new and will be used to build sidewalks, redo roads, and upgrade infrastructure to turn what claimed by many to be the largest collection of $1/day surface parking lots into a huge mixed use project. Much of this area will be taken up by the Allen Plaza development: http://www.allenplaza.com/. Twelve Centennial Park is also in this TAD but is only two connected towers and not multiblock like Allen Plaza: http://www.twelvecentennialpark.com/

    Of these projects, you can probably find the most information about Atlantic Station since it was basically a nasty toxic site, possibily a SuperFund qualified site and now is the prototype for most other large mixed use projects in the metro area.

    The biggest issue with TAD/TIF here is that only a certain percentage of the city's total tax digest may be in a TAD. The problem is that because the property value in the TADs are going up, they're making up an increasingly large amount of the total property taxes for the city. So there is a rush to get the Beltline and other TADs started before the city hits the state imposed limit.
    As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron. - H.L. Mencken

  4. #4
    Cyburbian
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    The wikepedia article on it seems to have a lot of meat,
    http://en.wikipedia.org/wiki/Tax_increment_financing
    plus a fair number of sited sources. It comes under discussion all the time here, and I was a little soft on the details.

    http://www.house.leg.state.mn.us/hrd...ifmech.htm#PUR
    was a useful link on the basics of Tif found at the bottom of the article.

  5. #5
    Cyburbian Habanero's avatar
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    A follow up question on TIFs, if I may-

    The Tuscon TIF states they are using sales tax, but I was under the impression it was based off property taxes. Is it up to the jurisdiction to decide what tax is used?
    When Jesus said "love your enemies", he probably didn't mean kill them.

  6. #6
    Quote Originally posted by Habanero View post
    A follow up question on TIFs, if I may-

    The Tuscon TIF states they are using sales tax, but I was under the impression it was based off property taxes. Is it up to the jurisdiction to decide what tax is used?
    No, usually the legislature sets out what can go into a TIF. In Indiana, it's based on new assessed value only.

  7. #7
    I am just starting to read a book on TIFs, so you could see if this is available through a local library, or you could buy it if its still in print, as it appears to be pretty good:

    Tax Increment Financing and Economic Development, Uses, Structures, and Impact, Edited by Craig L Johnson and Joyce Y Man.

    The copyright is 2001, so it should be fairly up-to-date.

  8. #8
    Cyburbian Habanero's avatar
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    Thank you for the answer and recommendation.
    When Jesus said "love your enemies", he probably didn't mean kill them.

  9. #9
    Cyburbian
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    Mattoon has created a "business district" in addition to its TIF districts. The business district generates revenue by raising the sales tax within the district. The business district overlaps the TIF, but has different criteria to qualify. I wonder if something similar is being done in Tuscon.

  10. #10
    Cyburbian MDGARD01's avatar
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    Kansas CIty, Mo has been using tiff's all over the place to redevelop parts of their downtown....!
    :)

    The present is a gift

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    TIF in Greenfield Areas

    Hello All, I'm new to Cyburbia. I'm a planner here in New Mexico. I wanted to see if anyone can help me out with info regarding TIFs. We have a County Commission here who is debating on whether or not to enable TIF for a huge 55,000 acre development in the middle of nowhere. For many progressive planners here this idea doesn't make sense for a lot of reasons and so we've begun a campaign to stop TIF in Greenfield areas. Due to heavy pressure exerted from the developers, some of the County Commissioners seem to be under the impression that enacting a TIF is the only way this development will get done (which is not the case....the developer is only trying to lower the bottom line...but that is another longer story). these same commissioners have branded many of us an anti-growth and have challenged us to show them numbers showing that TIF doesn't work in a greenfield area. I haven't been able to find any info regarding County's and TIFs, but I'd assume that because most County revenues come from Property Taxes, a TIF clearly doesn't make sense. Can anyone help me out with infor regarding either County's and TIF or Greenfield TIF? Thanks a million!!!

  12. #12
    Cyburbian Brocktoon's avatar
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    Quote Originally posted by jaranda View post
    Hello All, I'm new to Cyburbia. I'm a planner here in New Mexico. I wanted to see if anyone can help me out with info regarding TIFs. We have a County Commission here who is debating on whether or not to enable TIF for a huge 55,000 acre development in the middle of nowhere. For many progressive planners here this idea doesn't make sense for a lot of reasons and so we've begun a campaign to stop TIF in Greenfield areas. Due to heavy pressure exerted from the developers, some of the County Commissioners seem to be under the impression that enacting a TIF is the only way this development will get done (which is not the case....the developer is only trying to lower the bottom line...but that is another longer story). these same commissioners have branded many of us an anti-growth and have challenged us to show them numbers showing that TIF doesn't work in a greenfield area. I haven't been able to find any info regarding County's and TIFs, but I'd assume that because most County revenues come from Property Taxes, a TIF clearly doesn't make sense. Can anyone help me out with infor regarding either County's and TIF or Greenfield TIF? Thanks a million!!!
    A TIF can work anywhere. The question is why do they need a TIF? What are they going to do with the money? Is if a commercial, industrial, retail or residential development? I would not write it off because it is a greenfield. Many industrial parks in the Midwest started as a greenfield and through the TIF created, maintained and expanded the park because of the guarantee revenue source. When property tax is a large source of revenue is where TIF make the most sense. Since the county is going to forgo this revenue what benefit do they receive?

    If itís a residential development then you should have no problem showing what the tax revenue versus expenditure per home. Residential developments usually consume more tax dollars than they generate. That is why becoming a bedroom community is not a sound economic development strategy.

    If you have more details I might be able to help more but in general TIF's work for commercial and industrial developments but tends not to be the best strategy for residential.
    "If you don't like change, you're going to like irrelevance even less" General Eric Shinseki

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