COLUMBIA — The Tiger Hotel and the "District Village" at Tenth and Locust streets will be the first downtown redevelopment projects to apply for special tax breaks offered by the city for the first time.
Columbia has requested proposals from the two projects, due Feb. 9, targeting them as developments that would benefit from tax-increment financing.
"Good quality development in the downtown area is going to spur additional good quality development," Assistant City Manager Tony St. Romaine said. "In order to make that good quality development happen, (some projects) need assistance from the city."
Tax-increment financing, or TIF, is an economic incentive that freezes the value of a property before any construction. As a developer improves a property, the difference between the frozen property value and the real property value is invested into a "special allocation fund," along with a percentage of the city's incremental sales and utility tax revenue. That money can then be used to pay for the redevelopment or for infrastructure needs such as improved sidewalks or relocated utilities.
Developers can receive TIF assistance only if their projects demonstrate “a substantial and significant public benefit,” such as creating new jobs, eliminating blight or strengthening Columbia’s economy. Developers also must demonstrate that their projects would be impossible without help from the city.
The Tiger Hotel owner John Ott said he wants to restore the building to its former glory and bring more people downtown.
"Bringing hotel rooms to the district would be a huge public benefit," Ott said. "It's the missing component to the rest of downtown."
Ott estimated that, on most days, about 100 people would stay in the hotel and spend money in downtown shops and restaurants. He said it would cost several million dollars to renovate the hotel, which most recently was used as apartments for seniors. The hotel has been mostly vacant since January 2007.
"We only use about 10 percent of the building," Ott said. "The rest of it has been mothballed, so to speak, until we can start the project. TIF is an economic development tool necessary to make this project work."