Transcript Presentation Title September 23, 2008

Tax Increment Financing (“TIF”)
Overview
January 25, 2013
3TB Project Review
Agenda
1. What is Tax Increment Financing?
2. TIF in the City of Pittsburgh
3. TIF Case Studies
4. TIF Projects (In the Pipeline)
3TB Project Review
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What is Tax Increment Financing?
Tax increment financing (TIF) allows local governments to invest
in infrastructure and other improvements and pay for them by
capturing the increase in property tax revenues. The
increase in taxes generated by the enhancements, also
known as increment, is used to pay the public debt incurred
while making these improvements.
More simply put…
Tax increment financing (TIF) captures the future tax
benefits of real estate improvements to pay the present
cost of those improvements.
Source: CDFA.net/cdfa/cdfaweb.nsf/pages/tifcbuildingresources.html
3TB Project Review
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What is Tax Increment Financing?
Example:
• The first ("base“) year taxes on property value for the project =
$500,000
• The subsequent year taxes (post-development) gradually
increases to = $1,500,000
• The TIF project captures the property tax on the increase in value
– e.g., the "tax increment" of $1,000,000
• The TIF project is able to utilize the increment to pay for the
approved TIF project (or debt issued to do such)
• The taxing bodies continue to receive the taxes on the $500,000
while the increment continues to rise.
$1,500,000
Tax Increment (to Pay Debt Service)
New Tax
Base
$500,000
Fixed Tax Allocation to Taxing
Bodies
Year 1
Base Year
3TB Project Review
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Year 20
What is Tax Increment Financing (TIF)?
•
Decreased federal and state funding for redevelopment-related
activities have forced local governments to identify creative
solutions, such as TIF, to address redevelopment.
•
TIF is used in 49 states and the District of Columbia.
•
Generally used to address blight and deterioration, promote
neighborhood stability and inspire district-oriented economic
development or redevelopment.
Source: CDFA.net/cdfa/cdfaweb.nsf/pages/tifcbuildingresources.html
3TB Project Review
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What is Tax Increment Financing (TIF)?
Increment can fund capital and professional costs
including but not limited to:
– Site preparation costs
– Paving
– Sanitary Sewer / Water
– Public Use Facilities
– Parks & Recreation Facilities
– Streets & Street Lights
– Parking Facilities
– Architectural/ Engineering / Planning / Legal
– Environmental impact studies
– Operation and Administration of the zone
– Financing
Source: CDFA.net/cdfa/cdfaweb.nsf/pages/tifcbuildingresources.html
3TB Project Review
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What is Tax Increment Financing (TIF)?
•
Pay-As-You-Go vs. TIF Debt
•
TIF Debt is NOT an obligation of the City, County, nor School
District
•
Project-Specific vs. District-wide TIFs
•
“But For” test
Source: CDFA.net/cdfa/cdfaweb.nsf/pages/tifcbuildingresources.html
3TB Project Review
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Agenda
1. What is Tax Increment Financing?
2. TIF in the City of Pittsburgh
3. TIF Case Studies
4. TIF Projects (In the Pipeline)
3TB Project Review
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URA TIF Guidelines and Application
3TB Project Review - # 10
URA TIF Guidelines and Application (Excerpt)
Exhibits
• Allegheny County TIF Guidelines, April 27, 2010.
• City of Pittsburgh Code 201.11 Tax Increment Financing.
• P.L. 465, No. 113, 53 P.S. Section 6930.1, et seq.
• Pittsburgh School District Resolutions
• Three Taxing Bodies TIF Policies Checklist
• URA TIF Project Application
• Annual Jobs Report Form
3TB Project Review - # 11
Sample TIF Process
Receive TIF Application by Developer or Initiated by URA
Define Project
Determine Project Eligibility & Funding Gap – “…BUT FOR…”
Estimate Post-Development Taxes
Obtain 3TB Initial Approvals to Study TIF as Financing Tool
Draft TIF Plan; work with TIF Committee
Commission 3rd party Reports
Obtain County and School District Final Approvals
Public Hearing
Obtain City Council Final Approval
Arrange for Project Funding
Apply TIF Funds to the Project
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URA TIF Guidelines and Application (Excerpt)
TIF Plan:
Per the PA TIF Act and URA Guidelines, the TIF Plan will include the following:
• Background on the project applicant
• Description of the proposed development
• Reference to the redevelopment area
• Estimated costs of the proposed development (including public infrastructure)
• Market analysis of the proposed development
• Economic and fiscal impact of the proposed development (during construction and at build out)
• Employment impact of the proposed development (during construction and at build out)
• Improvements to be financed with TIF proceeds
• TIF amount
• Pledged parcels within TIF District
• Current assessed value and tax base
• Projected assessed value
• Projected pledged revenue
• Provisions for insufficient TIF revenues and excess tax increment
• Other financial details of the TIF
• Estimated non-project costs
• Maps of the TIF District and existing property conditions
• Proposed changes to all applicable local plans, ordinances and codes
• Statement on community engagement
• Statement of M/WBE participation
• Statement of sustainability goals
• Statement of proposed method for relocation (if applicable)
• TIF District establishment date
• Duration of TIF District
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