Not sure how I feel about this. Specifically this part:
Kevin Baity, city manager, said the city staff will talk with Park Ridge Midwest Realty, a contractor, about using and improving the Stadium Grille property for use by Bandana’s Bar-B-Q restaurant. If the council approves the contract, Park Ridge Midwest Realty would purchase the property from First Southern Bank for $330,662 and make upgrades to the building. The city would then reimburse the contractor annually until either the $330,662 is paid off or the Tax Increment Financing District No. 1 expires.
Updated to clarify how the TIF district works (i.e. the city is not reimbursing the purchaser for the purchase of the property. The original DE story is awkwardly worded):
If I understand how the TIF process works, the tax base at the time of purchase remains the same and is used for calculation fo taxes due to other taxing bodies for the duration of the TIF district. However, improvements in the property would increase the calculated property tax. The difference between the base property tax and the increased property tax goes into the Special Tax Increment Allocation Fund, which is not available to other taxing bodies and may only be used for investment in the area covered by the TIF. In many cases, this includes reimbursing, over time, the investor in the property for the improvements made, but not the cost of the original purchase of the property.
The purpose of the TIF is to:
be used for costs associated with the development or redevelopment of property within the TIF, allowing blighted, declining and underperforming areas to again become viable, and allowing these areas to compete with vacant land at the edge of urban areas.
which the Stadium Grille certainly qualifies as (not blighted or declining, but certainly underperforming).
Kevin Baity, city manager, said the city staff will talk with Park Ridge Midwest Realty, a contractor, about using and improving the Stadium Grille property for use by Bandana’s Bar-B-Q restaurant. If the council approves the contract, Park Ridge Midwest Realty would purchase the property from First Southern Bank for $330,662 and make upgrades to the building. The city would then reimburse the contractor annually until either the $330,662 is paid off or the Tax Increment Financing District No. 1 expires.
Updated to clarify how the TIF district works (i.e. the city is not reimbursing the purchaser for the purchase of the property. The original DE story is awkwardly worded):
If I understand how the TIF process works, the tax base at the time of purchase remains the same and is used for calculation fo taxes due to other taxing bodies for the duration of the TIF district. However, improvements in the property would increase the calculated property tax. The difference between the base property tax and the increased property tax goes into the Special Tax Increment Allocation Fund, which is not available to other taxing bodies and may only be used for investment in the area covered by the TIF. In many cases, this includes reimbursing, over time, the investor in the property for the improvements made, but not the cost of the original purchase of the property.
The purpose of the TIF is to:
be used for costs associated with the development or redevelopment of property within the TIF, allowing blighted, declining and underperforming areas to again become viable, and allowing these areas to compete with vacant land at the edge of urban areas.
which the Stadium Grille certainly qualifies as (not blighted or declining, but certainly underperforming).
I'm almost certain that property acquisition is a TIF reimbursable cost.
ReplyDeleteThanks. It is. I double checked with city manager Baity and property acquisition and remodeling are reimbursable. New construction is not and all costs must be approved before they will be re-imbursed.
ReplyDeleteCost of the building is $900k (according to a good source). The number in the DE is the TIF district number, not the price.
ReplyDeleteThanks. The $330,000 figure is the amount that will be reimbursed by the city, assuming all the costs are approved.
ReplyDelete