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TIF District funds grow with value of property By Philip Jankowski Taylor’s Tax Incremental Financing District, which covers most of downtown, is designed to create economic development. Thanks to an increase in property values, the fund is growing. The district falls about one block east and west of Main Street from Rio Grande to Ninth streets. It also runs between Third Street and the railroad tracks from Doak to Elliott streets. The district was created to build a fund that gets revenue from property taxes within the district. No new taxes were created for the fund. Instead, the city set up a baseline for the value of properties within the district. As property values rise, property tax generated by the difference in value within the district are allocated to the fund. In 2005, when the city council created the district and set the baseline property value, the downtown properties were valued at about $25 million. In 2006, the property was valued at $28.250 million. Property taxes collected on the $3.250 million difference go into the fund. “The difference is taxed at the same rate but the difference is put into a fund,” Director of Community Development Bob van Til said. That money will be used for public improvement projects, such as new sidewalks, street lamps and public art, designed to attract economic development. The TIFD would even provide money to help relocate a business to the area. “The belief is that this will spur more development because of improvements,” van Til said. “We can lower (a business’s) entry cost into the market.” The district will exist for 25 years, and van Til has estimated it will create between $3.5 million and $5 million in revenue. So far, no projects have used money generated by the TIFD. The district is an interlocal agreement between the city and the county. County property taxes will also be put toward the improvement fund, van Til said. The district’s regulations provide that no more than 10 percent of the property may be residential, and the district cannot be larger than 15 percent of the city’s total value. Right now the district makes up about 8 percent of the city’s total property value, roughly $650 million. Van Til said the city did not make the area bigger in case the city wishes to set up other TIF districts in the future.
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