Charles Street drains TIF for 7th Street
By Shellie Berg
By Shellie Berg
Because of the $600,000 in debt service for the Swedish American/Charles Street realignment, for the first time, the city is using the Request for Proposals (RFP) for the 7th Street Tax Increment Financing (TIF) funds, which supplement housing and business endeavors.
The RFP will be issued sometime this week, and it is a packet containing information on making a request, along with an application. It will be sent to a mailing list and must be returned within 90 days from the RFP issue date.
When the city obtains requests, an evaluation process will occur. After reviewing applications, economic development will take recommendations to the City Council.
Minus the Swedish American/Charles Street debt, the fund contains an available balance of $200,000 this year. The TIF fund is generated by property taxes from the previous year in the district. Many business owners in the area are upset that such a large percentage is being committed to only one business.
Because of the low amount, the city formulated the RFP. The city maintains the evaluation process is the fairest method. The higher the leveraging, the lower the costs per unit. The more private funds there are, the higher the points with the city.
If we were the only source of funding, we would penalize you, Economic Development Coordinator Bob Long said. We would literally deduct points. Its not stretching our money.
Generally, the city accrues about a half million dollars or more in the fund each year and has always had sufficient funds to fortify all requests. But the Charles Street realignment project has temporarily shaved funds allotted for proposals.
Prior to this, weve always had funds, Long said. Until some of the new development gets on the tax rolls and starts generating new increment, theres a cash-flow crunch here for a couple of years.
Long envisions using the RFP again. I wouldnt be surprised if we actually decide we like this way of doing this, even a few years down the road when the money is available, Long stated.
We may keep this in place if it works well. The first time out of the box, who knows, we may run into some problem. Im anticipating it being a very smooth process.
Long stated the evaluation is a fair process. Everybody would be on the same time table and be evaluated using the same standards, he said. Its pretty open. Theoretically, one project could apply and get all $200,000 if they were a high-rated proposal.
He said that so far, individuals have inquired but havent applied yet.
The city seeks projects that will have one or more of the following benefits: market-rate housing; mixed-income housing; opening of new business in the district that hasnt been relocated from outside the city and within 10 miles of the project site; creation of jobs, particularly residents of the district; reuse of vacant buildings; generation of sales tax revenues; substantial increase of equalized valuation of property in the district; frontage on Seventh Street or Fifth Avenue, between South Sixth Street & Eighth Street); and/or the leveraging of private funds and equity. For more information, call 987-5610 or 987-5561.