Batavia may make super-duper-official its plan to extend the life of a tax-funded downtown improvement plan, due to expire in December, for another 13 years.
The city’s community development committee has unanimously recommended adopting an ordinance changing the expiration date on Tax Increment Financing District 1, which covers much of the downtown. The city council likely will vote on it Monday.
The plan was adopted in December 1989, with the intent of fixing up the downtown, and is due to expire in December 2012. City planners in 1989 felt much of the previous use of the downtown, which was industrial, no longer was current or appropriate.
In a TIF district, property tax payments to taxing bodies are frozen at the start. If improvements increase the value of the property and property taxes increase, that increase is used to pay for the improvements instead of being distributed to taxing bodies, such as school and park districts.
In 1989, state law required TIF districts to end after 23 years; a later amendment allowed extensions to 35 years. A law firm Batavia consulted in 2005 about doing that suggested the council formally adopt an ordinance that says it has the right to do so, in case it ever wants to borrow money for a TIF project and repay with TIF money.
Among other things, TIF 1 has paid for renovations to the Batavia Government Center and has been used to provide grants and microloans to downtown businesses to remodel and repair buildings, freshen up facades and start businesses.
TIF 1 money was used to buy the First Baptist Church at Wilson Street and Route 25, and the Thomle Building, now used as a business incubator, on the east bank of the Fox River. It also was used to buy and demolish two buildings on South River Street, dredge Depot Pond and install a pedestrian bridge over the river near the city hall.
Currently TIF 1 money is being used to pay for work to improve the streetscape of the downtown, including the redesign and rebuilding of North River Street that is under way, and the soon-to-be-started redesign and rebuilding of Houston Street. Besides money it has already collected, the city may borrow money from its general fund, then repay the general fund from the TIF fund over five years.
When the city established the TIF district in 1989, it estimated an incremental increase in property taxes of $10.5 million, in 1989 dollars, over the life of the TIF.
Last week, City Administrator William McGrath presented figures showing the city may collect $16.5 million between now and 2027.
Jason Bajor, assistant city administrator and TIF administrator, said the other taxing bodies would only have to be notified in advance if the city was changing the plan. Kris Monn, the Batavia schools’ business superintendent, said the district does not have a problem with the extension because the TIF district’s EAV has not improved as much as it could have, and because none of the projects proposed would have added substantially to the school population.Copyright © 2013 Paddock Publications, Inc. All rights reserved.