After hosting two public input meetings with Commercial Street businesses, residents and property owners to determine how to spend more than half a million dollars captured from the Commercial Street Tax Increment Financing (TIF) Plan, staff from the City’s Economic Development office will present recommendations at the Monday, Oct. 3 City Council meeting at 6:30 p.m. at Historic City Hall.
Annual TIF revenues were just under $160,000 in 2015 and are projected to be nearly $180,000 by 2019. The total C-Street TIF revenue available to spend sits at about $538,000, according to Sarah Kerner, interim director of Economic Development.
“The overwhelming majority of participants in the August and September public input meetings stated their preference was to acquire property from BNSF Railway for construction of the proposed Frisco Lane, but they would like to see some smaller projects that will immediately improve C-Street experience as well. We are recommending that City Council allocate funding to improve an alley on the west end of Historic Commercial Street to provide a better link to public parking,” Kerner says.
The remaining funds will be banked for future use.
Frisco Lane is the area behind the C-Street businesses that runs parallel to the railroad tracks north of Commercial Street between Benton and Campbell avenues. The businesses have long wanted better access to the north side of their properties for parking, trash collection and deliveries.
The cost to acquire the Frisco Lane property is about $976,000. The City will pay about $708,000 toward that with rail credits obtained in the sale of the West Wye to BNSF, Kerner says. The $268,000 balance will be paid for with TIF funds. Construction work to stabilize and secure the property and convert it to a service lane and employee parking area will cost about $80,000 and will be paid for with TIF funds.
An alleyway improvement to provide an accessible pedestrian walkway from C-Street to the public parking lot at Campbell Avenue and Blaine Street will cost about $50,000 and will be paid for with TIF funds.
Background on C-Street TIF
The Commercial Street Historic District was approved by Springfield City Council in early 2006 with the recommendation to use tax increment financing for the C-Street redevelopment plan. The C-Street TIF Plan was adopted by Council in April 2008. The redevelopment area’s boundaries are Grant Avenue to the west and Janss Lumber to the east.
The Commercial Street Historic District was approved by Springfield City Council in early 2006 with the recommendation to use tax increment financing for the C-Street redevelopment plan. The C-Street TIF Plan was adopted by Council in April 2008. The redevelopment area’s boundaries are Grant Avenue to the west and Janss Lumber to the east.
Tax increment financing provides for the redirection of the incremental increase in sales and property tax revenue resulting from a redevelopment project to be used for public improvement project-related costs, infrastructure and capital improvements. No TIF revenues may be used for private projects.
“TlF is based on the premise that there will be an increase in the value of real property, new jobs and other economic activity within the redevelopment area as redevelopment occurs,” Kerner says. “As the property is improved, the assessed value of real property in the redevelopment area increases above the base level. By capturing the increase in the assessed value of the property over the base level, a tax increment is produced.”
These tax increments, also referred to as "payments in lieu of taxes" or PILOTS, are transferred to a special allocation fund that is administered by the city. The City and county also transfers 50% of all incremental sales tax revenues to this fund. The money collected in the special allocation fund is then used to pay directly for the redevelopment project costs or to retire bonds or other obligations issued to pay such costs.
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