COLUMBIA — As part of the effort to redevelop downtown, the City Council on Monday unanimously approved a plan that would allow downtown businesses to apply for tax breaks.
The council voted to approve guidelines for Tax Increment Financing, or TIF, and to create a Tax Increment Finance Commission to oversee the application process and make recommendations to the council.
TIFs are designed to encourage businesses to expand. They can be used differently, sometimes by freezing property taxes at current rates for a set amount of time, or other times by using additional property taxes to pay for the infrastructure related to a project.
The specific contribution by the city to individual TIFs will be determined on a case-by-case basis by the council when developers apply for TIFs.
“Each project must be brought to the council and be decided on its merit,” City Manager Bill Watkins said.
Watkins said the most critical piece of the guidelines that the council approved Monday was that a TIF would only be granted if it was demonstrated that a development project would not be financially feasible without a TIF. Other guidelines include giving preference to developments that would bring people in from outside the city or provide otherwise unavailable services and encouraging projects that “create jobs with wages that exceed the median income level of Columbia.”
Council members agreed on most of the TIF proposals at Monday’s meeting, though a proposal by Sixth Ward Councilwoman Barbara Hoppe that would give preference to environmentally friendly buildings and set standards that would be used to make that determination had a lone dissenter.
“Our goal is in the long-term. It will save money for the city by reducing costs,” Hoppe said.
The amendment passed 6-1, with Fifth Ward Councilwoman Laura Nauser dissenting, citing concerns this would prevent owners of older buildings from receiving TIF money.
The council members briefly debated if there would be certain required qualifications for members of the TIF commission but agreed to address the application process at a later time.
The commission will have 11 unpaid members: Six will be appointed by Hindman, with the council’s consent, two by the Columbia Board of Education and two by the presiding commissioner of Boone County. One member would represent districts affected by the TIF.
In addition to approving TIF guidelines, the city has taken several other steps to encourage further development of downtown. The Boston-based planning firm Sasaki Associates was hired by the city, MU and Stephens College in 2006 and recommended giving tax breaks as an incentive for development.
In October 2007, John Ott, owner of The Tiger hotel, asked the council to look into TIFs. Ott said he wants to renovate the hotel and would apply for a TIF when the commission is created.
Watkins said a study will need to be done to determine exactly which areas of the city are considered part of downtown.