COLUMBIA — A draft application for tax breaks designed to stimulate downtown development has been developed, and the city could be accepting applicants in the next few weeks.
The packet outlines the city’s procedures for reviewing applications for tax-increment financing, which provides for any increase in property taxes after a project is completed to be applied toward the cost of new infrastructure such as roads or utilities that the project requires. The procedures were adapted from similar ones in other cities, including Independence and St. Louis.
Assistant City Manager Tony St. Romaine, who drafted the application with the help of Spectrum Consulting, said the city is in the early stages of forming a TIF commission to review the applications.
“Until we actually get a TIF commission formed, we won’t be able to move forward on the actual application process,” he said. “I anticipate that will happen in the next couple weeks.”
According to the draft packet, each application could cost $10,000 upon submission, and applications for projects on more than 15 acres would cost $15,000. The fee is designed to cover the cost of reviewing the application. If the project requires third-party review that costs more than the initial application fee, the application would have to pay that cost, too. Any major amendments to a submitted plan would cost an additional $10,000; minor amendments would cost $5,000.
But the city could also use alternate language, included in the draft, that would allow the payment to be made according to an agreement between the applicant and the city. It also states that if the alternate language is adopted, some of the costs could be paid from TIF revenue that would normally go toward infrastructure.
St. Romaine said the language will be completed after a TIF commission is appointed.
He said the entire application process probably would take no less than three or four months to complete. That time would accommodate city staff reviews, TIF committee hearings and consideration by the City Council. Some projects also could require time for independent studies.
“A lot is going to depend on the complexity of the project,” he said.
The city has already provided developers of The Tiger Hotel with a copy of the application, and St. Romaine said they likely would be the first to apply.
John Ott, one of the partners in the The Tiger Hotel’s project, said they are putting together an application and hiring a third-party professional to help assemble it. He said hiring an expert familiar with the TIF process will be necessary in most cases.
“The average person would have difficulty filling it out,” he said. “I know I would personally. You have to hire a professional.”
The TIF policies require that applicants investigate whether funding could be secured through other means. The guidelines also state that the TIF commission should give preference to projects that create jobs with wages greater than the city’s median income and that commercial redevelopment projects should help stabilize blighted or deteriorating areas.
The guidelines also give preference to projects that are built to “green” specifications, like Leadership in Energy and Environmental Design building certification and Energy Star energy efficiency standards.
Ott said the TIF program is an important tool to attract outside developers to Columbia.
“It’s vital, because other markets and other communities of all sizes in the state of Missouri have this tool available,” he said. “Many projects could not occur without this tool, and certainly The Tiger hotel is one of them.”
The TIF program also is a prerequisite for other funding the city might tap for downtown development, including money from the Missouri Downtown Economic Stimulus Act. MODESA offers grants to fund infrastructure projects, provided city development meets certain requirements for cost and jobs created.
St. Romaine said the city is moving ahead with projects to help revitalize areas of downtown.
“We’re in an exciting time for downtown,” he said. “We’re blessed in Columbia to have a very vibrant downtown. It’s an exciting time, but we certainly don’t want to rest on our laurels.”