KBIA Local
(2009-07-21)
Listen Now:
COLUMBIA, MO
(KBIA) -
The Columbia City Council has okayed two applications of private investors seeking public funds for downtown building projects. KBIA's Maureen McCollum has more on the TIF projects.
null
City Manager Bill Watkins says downtown Columbia is the heartbeat of the city. He says he looks to downtown as an indication on how the city's business climate is doing. Watkins says he worries about the trend some downtown businesses are following.
"If you think about it, there have been a number of sales tax generating businesses that have moved out of downtown and not been replaced."
Many downtown entities are nontaxable: buildings owned by the government, university, or churches. Watkins says more businesses are needed downtown in order to bring in more tax revenues. So Watkins says the city decided to try something new to encourage development: Tax Increment Financing, or TIF.
Two separate projects had TIF applications approved by the City Council this week. Renovators hope to turn the Tiger Hotel into a boutique hotel, and on Tenth and Locust, developers want to build an apartment complex with a grocery store and other retail space. With TIF in place, the projects property tax would be frozen at its current rate for 23 years, or until the bond is paid off. Then, the incremental tax they would have been paying, is actually used to finance a portion of the project. Tony St. Romaine is Assistant City Manager.
"The fact that not all taxes are TIF-able, you know, they don't go to the developer. For example, personal property tax does not go to the developer. The only thing that stays frozen that they get to use is the real estate property tax and half and half of what's called the EATS taxes, or the economic activity taxes, which are basically the sales taxes."
St. Romaine says the projects will bring in more money for the city than if they weren't built. After 23 years, both projects will catch up to the current sales tax rate. The Tiger Hotel partners are asking for almost $1.8 million and the Tenth and Locust project developer is seeking $3.3 million.
Some residents, organizations, and businesses are skeptical about instating TIF within the city. The Columbia Public School Board, which has two seats on the TIF commission, opposes the present proposals. Superintendent Chris Belcher spoke at the Council meeting, which can now be found on the city's website. He says the board is concerned about using property taxes to encourage growth. Property taxes make up 60% of the school's budget.
"Twenty-three years is a long time to wait for the revenue generated by these properties."
Others encouraged the Council to look deeper into TIFS, while some said they did not want public funds financing private projects. Some business owners say industry is developing downtown without the help of public funds. Arnie Fagan owns many properties downtown and also spoke at the meeting.
"As you go down block by block by block, people like me are investing in these buildings. We are putting in our own money, we are putting in apartments, and we are putting in businesses. To be competing against these other businesses that have a tax break, I think is really a problem."
Others did speak in favor of the TIF funded projects, saying it would be good for downtown. In the end the City Council approved the TIF applications unanimously. Now, developers will proceed with detailing project plans, which will then be reviewed by City Council.
© Copyright 2012, KBIA
