Tax Increment Financing District—Concept to Reality

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Thursday June 21, 2012

This spring, City residents, property owners, and business people gathered to discuss the future vision and regulations for City Center—a new walkable downtown in the vicinity of Dorset Street, Williston Road, and Hinesburg Road. Towards the end of the discussion, Brian Wright, the City’s consultant, stood in front of a graphic showing tree lined streets, a town green, civic structures, a restored stream, and acres of new buildings and parkland. “Great,” said a resident in the third row, “but, how do we get there from here? We’ve had plans before and in five years we may just have another.” “Bake sales,” he said, jokingly, and then pointed to a series of tools such as public-private partnerships, impacts fees, and Tax Increment Financing. While the City will not likely be holding bake sales, it does intend to see City Center redeveloped.

In 2010, the City told Vermont’s Economic Progress Council that it intends to take advantage of the Tax Increment Financing District (TIFs) program to fund public improvements. TIF Districts or TIFs, as they are often called, have successfully helped nearby Milton and Burlington to attract the private investment they had envisioned. The City’s market studies have looked at local capacity for growth and estimate that with funding from a City Center TIF District, substantial infrastructure may be built.

How does this program work? The City and the State agree on the parcels to be included in the district. Once the City is ready to construct the projects, the voters bond for the improvements or otherwise secures financing for the improvements. With the improvements built or underway it is less risky for developers to build mixed use and other town center projects that the current market does not support (as it does strip commercial). During the 20 years after the first public improvement debt is incurred the City may set aside 75 percent of all the increases in property tax revenues (municipal and State education) generated within the TIF District as a result of the increased value of the land and resulting from the new development. The City then uses these revenues to pay back the funds borrowed to build the public projects.

A TIF District is designed to create the conditions to allow for more development in the specific area—City Center in our case—than would otherwise take place.

The City needs your help to develop a list of projects that will result in redevelopment and meet community needs. Which public improvements will achieve the best new South Burlington downtown? What will make you shop on Market Street, bring your children to City Center, recommend it as a place to live or live there yourself? Join your neighbors at City Hall Tuesday, June 26, to look at potential projects for inclusion in the TIF district application and to let the City know which ones are the most likely to bring you to City Center.

City Center Community Workshop, Tuesday, June 26, 7:30 p.m. City Hall, 575 Dorset Street, South Burlington. For more information, contact Ilona Blanchard, project director, at iblanchard@sburl.com or 802-846-4123.

SOURCE: Ilona Blanchard, Project Director, City of South Burlington