By a unanimous vote Tuesday night, Apalachicola city commissioners revived a tax increment financing plan that will earmark growth in the downtown area’s tax base to subsidize improvements to the area.
In addition, the commissioners expanded the membership of the board governing the Community Redevelopment Area (CRA) to be served by the new tax plan.
Speaking on behalf of the CRA board, Jim Bachrach asked commissioners to revive the tax increment financing plan (TIF) that they first passed in 2010, but which had mistakenly not be implemented.
What a TIF does is set a baseline of taxes for a given area, for a given year, and then earmarks any subsequent growth in that area’s tax base to redevelopment of that area.
In 2010, the city commission passed a resolution to create a TIF for the CRA, which comprises the downtown area up to the historic district, and as far as 10th Street, and extending along the Avenue E corridor to the edge of town.
“The CRA is well-defined,” said Bachrach. “It (TIF) allows us to generate potential funding down the road.”
But that original TIF never came into being, Bachrach said, meaning no baseline tax year was created and no tax growth was set aside for improvements to the CRA.
“In the past the process was implemented but never completed,” he said. “In 2011, when we thought the baseline was pegged and set, it was never done, never completed.”
Had that been done, the CRA would have had a tax baseline of $23 million, and it would have dropped by now to $18.5 million, meaning no growth in the tax base would have been gleaned by the TIF.
“Through the research, we found this (mistake) is the best thing that ever happened to the CRA,” he said. “It looks like things have stabilized. This is the best thing that could have happened.”
Mayor Van Johnson agreed that whatever mistakes were made turned out to be blessings in disguise. “It’s a good thing they didn’t (implement it),” he said.
With the passage of the new resolution, the first of 2014, the city commission set into motion a process that will earmark all growth in city and county property taxes within the CRA, but not school taxes, to subsidize improvements to the CRA, similar to a system now in place in Carrabelle.
TIFs are considered by experts to increase the value of surrounding real estate, which generates additional tax revenue. They also have been analyzed as a possible boost to sales-tax revenue and a jobs creator, but it is unclear what direct effect it will have in the Apalachicola CRA.
The city commissioners also agreed to add an eighth member to the CRA, representing the Main Street organization.
“Many of the projects and missions of both organizations are often similar,” said Bachrach. “In many cities of the US, they work closely together and often are the same. We just felt those two organizations should come together and work closely on projects.”
In addition to that change, the commissioners agreed to broaden the definition of the member which is now set aside to be the owner of a business in the C-2 commercial zone. That seat, which is vacant, can now be filled by a resident of the C-2 zone.
The current CRA board includes representatives of city residents and property owners, the Chamber of Commerce, a real estate professional, a financial institution and the C-1 zone.