02-14-2000 Council Work Session - Laserfiche WebLink

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TO: FROM: Mayor Jabbour and Orono City Council Members k Ron Moorse, City Administrator DATE:February 2,2000 SUBJECT: Tax Increment Financing (TIF) in Navarre Mayor Jabbour has advised staff that a new proposal for a substantial retail development on the former church site in Navarre is being developed. With the potential for this redevelopment project, staff would like to revisit the idea of setting up a Tax Increment Financing district in Navarre. A TIF district would enable the City to capture the increased taxes to be generated by the new development for use in funding public improvements in the Navarre commercial area or in assisting redevelopment projects in Navarre. What is TIF and how does it work? In a nut shell. Tax Increment Financing is the ability to capture and use the property tax revenue from a new development within a defined geographical area. When a TIF district is put in place, the taxes that are currently being paid based on the property value prior to the new development continue to be received by the various taxing jurisdictions; i.e., city, county, school district, etc. The new taxes based on the value of the new development (which excludes the pre-developmenc value of the property) are captured by the City. No other taxing jurisdictions receive ta.\es based on the value of the new development. Tax Increment Financing provides a new source of revenue the City can use to assist its economic development efforts. Tax Increment Financing can be used to: • Provide public improvements to enhance a commercial district (i.e., repairing and relighting the Navarre public parking lot). • Increase the City ’s leverage in terms of the type and quality of new development/redevelopment. • Assist a redevelopment project that would not be economically feasible without financial assistance. Rusty Fifield of Ehlers, the City ’s bond consultant, will attend the work session to answer questions the Council may have regarding TIF.