By D.E. Smoot
Phoenix Staff Writer
With a blight study completed and Urban Renewal Authority members ready to begin mapping out a plan, commissioners broached the topic of funding.
City Attorney Roy Tucker said officials likely will look at creating a tax increment financing district to spur development in an area targeted for urban renewal. The financial tool essentially reallocates sales or property taxes within the designated district in a way that encourages investment.
Urban renewal commissioners recently declared as blighted an area bounded by Chicago and 11th streets on the east and west and Shawnee Bypass and Talladega Street on the north and south. The blight declaration, which is required before reclamation and rehabilitation projects can be undertaken, is a finding that present conditions “substantially impair” urban growth and economic development.
City Manager Greg Buckley said designating a tax incentive financing district “doesn’t freeze the tax level,” it “establishes a base threshold for ... the disbursement of those taxes collected.” Tax revenue exceeding the threshold as a result of added value of a real estate project, Buckley said, is captured for more development.
“The entities that would get the extra tax is giving that up for a period of time for longer term gains,” Buckley said. “Hopefully, what you end up doing is increasing property values and economic development.”
Tucker said the most recent use of a tax increment financing in Muskogee involved the construction and expansion of the Dal-Tile plant. He said officials learned during a recent trip to Enid that city leaders there have created several such districts to entice new business, create jobs and develop its housing market.
“It’s not anything new — we’ve used it before here,” Tucker said. “They are just much more aggressive with it than we have been.”
While there is a perception tax increment financing leads to a tax increase, that typically isn’t the case. Property taxes, however, would tend to increase along with real estate values as the district is developed.
Tax incentive financing typically is set for a specific period of time and requires approval of all entities — county governments and school districts, for example — that agree to freeze the level of future disbursements.
Reach D.E. Smoot at (918) 684-2901 or dsmoot