Tax Increment Financing is a development tool designed to help finance certain eligible improvements to property in designated redevelopment areas (TIF Districts) by utilizing the new, or incremental, tax revenues generated by the project after completion.
Under TIF, property taxes within the TIF District are frozen for up to 23 years, the property owners then make Payments in Lieu of Taxes (PILOTS) to a special allocation fund.
Additionally, 50% of any new local Economic Activity Taxes (EATS), i.e. local sales taxes and earnings and payroll taxes are also paid into the special allocation fund.
The proceeds of the special allocation fund are then used to reimburse the developer for eligible project costs or to retire indebtedness incurred to cover those costs.
The process to apply for and gain approval for Tax Increment Financing takes four to six months and requires legislation by the City's Board of Aldermen. For more information, contact Dale Ruthsatz, Director of Commercial Development.