Let’s take an example: a set of properties is worth $100,000 today. That is their Base Value. The City, County, ACCD, and SARA together collect $700 per year on those properties. This $700 per year collection will continue through the life of the Zone – as if nothing were changing. Now, we create the Zone, and build improvements that raise the property value by $1,000,000. The taxing entities would now be able to collect something like an additional $7000 per year. That additional collection goes into the TIRZ Fund, instead of the General Funds of each taxing entity. The TIRZ Fund can use those collected moneys to reimburse for certain public improvements: the cost of new roads, infrastructure, parks, etc. in the zone – paying for the very improvements that are, in effect, raising the value of the properties. At the end of the life of the Zone, we go back to normal, but with properties that are now worth considerably more than before. Taxing entities can now collect the full amount of their assessment in their General Funds.
Program inception 1998 $1 billion value added Base value $609 million Projected value $1.6 billion ($1.6 billion based on 17 TIRZ with final financing plans; 5 others still being negotiated) *Six to one private to public ratio, in general: maybe more! Market-rate: 9600 planned; 1830 constructed Affordable: 1100 planned; 980 constructed
CDBG 20 If yes, 20 pts If no, 0 pts Health Zip Codes 5 If yes, 5 pts If no, 0 pts CRAG 10 If yes, 10 pts If no, 0 pts Empowerment/Enterprise Zone 10 If yes, 10 pts If no, 0 pts Poverty level 25 City average = 17.3% <17.3% =0 pts >17.3% = 15 pts >24.2% = 20 pts >32.9% =25 pts Education 25 City average = 24% <24% =0 pts >24% = 15 pts >33.6% = 20 pts >45.6% = 25 pts Un-employment 15 City average = 6.1% <6.1% = 0 pts >6.1% = 5 pts > 8.7% = 10 pts > 11.8% = 15 TOTAL PTS 110
Other partners that were critical to bringing affordable housing units to the market included non-profit developers and the SAHA. One of our landmark affordable projects is Rosedale, TIRZ #2. 69 single-family 120 multi-family Greenbelt / Park TIF partnered with the SAHA to participate in Victoria Commons, the redevelopment of old Victoria Courts housing project to new 602-unit mixed-income project with apartments, townhomes, and single-family detached TIRZ #11 contributes $3.4 million for infrastructure upgrades, Part of a $25 million infrastructure project that supports the construction of 182 single-family houses
The City and the Air Force are working together to redevelop the old Brooks Air Force Base into Brooks City-Base, and TIF is playing a critical role. TIRZ #16 contributes over $55 million for infrastructure construction TIF will support: centralized Emergency Operations Center for the entire City DPT pharmaceutical labs Hospital Ongoing Air Force research activity New research and technology tenants
In San Antonio, we use the word “Reinvestment” more than “Redevelopment”, because “Reinvestment” can include many more initiatives than real estate redevelopment. TIF has proven to be a very flexible “reinvestment” tool, creating opportunities to provide services to people in the areas of greatest need, and transforming the neighborhood one person at a time. ACTN WNBA: Silver Spurs training facility Open to the public for “Open Courts” after school every day Programs for senior fitness Barrio Clinic Part of town with no health services TIRZ #11 contributes nearly $2 million toward providing health care to qualified individuals in the area
The governing body must determine that development or redevelopment would not occur solely through private development in the reasonable foreseeable future. ( Sec. 311.003 (a)) Applies to both petition-initiated and city-initiated TIRZ Recurring Problem: Development activity in area or nearby negates the “But for TIF, development would not occur in this area…” argument
The TIF Unit can provide applicants with a sample pro-forma which requires the following necessary information: Demonstrate financial wherewithal to meet project costs and complete project (i.e. the most current three years of financial statements, complete Sources and Uses budget, and/or Letters of Credit from Bank) Identify all sources of funds, including other public sources, private financing, and developer equity contribution into project Identify all project costs, including acquisition, construction, soft costs, and long-term management costs, if applicable Submit detailed pro-forma that identify pre-TIF rate of return and gap in project financing Submit detailed pro-forma that identify project-plus-TIF rate of return and financial structure Identify proposed security, collateralization, or credit enhancement Demonstrate previous experience developing similar scale and type of project Demonstrate that no construction is taking place within the proposed TIRZ boundaries. No petition-driven TIRZ can include sites where construction has been initiated or where construction is ongoing, and the costs of such construction can not be financed through TIF.
Tax Increment Financing
Tax Increment Financing <ul><li>What is Tax Increment Financing? </li></ul><ul><li>TIF in San Antonio </li></ul><ul><li>TIF Regulations/Policies </li></ul><ul><li>Types of TIRZ </li></ul><ul><li>How Does TIF Work </li></ul>
TIF in San Antonio <ul><li>Over $ 1 Billion in existing value </li></ul><ul><li>24 existing TIRZ </li></ul><ul><li>2,731 residential units </li></ul><ul><li>686 multifamily units </li></ul><ul><li>1.5 million commercial square feet </li></ul><ul><li>255 park acres </li></ul>
TIF in San Antonio <ul><li>Purpose: </li></ul><ul><ul><li>Supports the City’s primary revitalization programs and initiatives </li></ul></ul><ul><ul><li>Implements the goals, policies, and recommendations of the City's Master Plan, Housing Master Plan, Community Revitalization Action Group (CRAG), and other adopted City plans </li></ul></ul><ul><ul><li>Used in areas where little to no private sector investment is currently taking place, and where redevelopment would not occur solely through private investment in the reasonably foreseeable future </li></ul></ul>
Open Space (TIF) Majestic Courtyard The Majestic Courtyard is located in the Houston Street TIRZ #9 and is only one of many Houston Street projects completed utilizing TIF funds. Its completion has brought to the TIRZ an urban park, a beautiful setting in which to relax, in what is now a lively sector of the City's Central Business District.
Higher Education (TIF) <ul><li>Texas A&M University - San Antonio </li></ul><ul><li>Located in the Verano TIRZ #28 , the new Texas A&M - San Antonio campus will have an estimated enrollment of 25,000 students at full build-out. The TIRZ will reimburse costs associated with the public improvements for these plans and at its completion, will enhance the quality of life for the existing residents of the region. Additionally, the City will gain a self-sustaining, mixed use community in the spirit of the initiatives set forth by existing community plans. </li></ul>
Affordable Housing (TIF) <ul><li>Brookside </li></ul><ul><li>Between 1980 and 1990 the Brookside area experienced a 129% increase in population compared to 19% population growth citywide. This TIRZ, located near the Brooks City-Base TIRZ , now a thriving and relevant commercial district, provided needed affordable and mixed-income housing. Approximately $1.9 million of TIF funds were used to upgrade streets, utilities, sidewalks and drainage. </li></ul>
Affordability Partnerships <ul><li>Non-profit developers </li></ul><ul><ul><li>San Antonio Alternative Housing Corporation </li></ul></ul><ul><ul><li>TIRZ #2 Rosedale </li></ul></ul><ul><li>San Antonio Housing Authority </li></ul><ul><ul><li>Victoria Commons HOPE VI </li></ul></ul><ul><ul><li>TIRZ #11: $3.4 million </li></ul></ul>
Facade Preservation (TIF) <ul><li>Houston Street Walgreens </li></ul><ul><li>Although Houston Street was once San Antonio's preeminent retail street, over the past thirty years, many of the area's structures experienced high levels of vacancy, neglect and deterioration. As one of the many improvements in the Houston Street TIRZ #9 , facade improvements to one of downtown San Antonio's largest drugstores provides a new and vibrant welcome to downtown residents and visitors. </li></ul>
Historic Places (TIF) <ul><li>Hays Street Bridge </li></ul><ul><li>Built in 1881, this historic bridge was deemed structurally unsound and barricaded in 1982. After 28 years of community activism to restore its use, it has reopened to bicycle and pedestrian traffic and now provides a link between the historic Eastside and downtown San Antonio. Included in its $3.7 million rehabilitation budget were $200,000 in Inner City TIRZ #11 TIF funds. The restoration of this historical landmark includes benches, informational signage on the history of the bridge and a public art component along the new approach railings. </li></ul>
Infrastructure (TIF) <ul><li>Presa Street Linkage </li></ul><ul><li>San Antonio's historic Riverwalk now has greater pedestrian access through the Presa Street Linkage. This linkage helps to create a more walkable downtown neighborhood. It includes a stepped foot path, an elevator that provides access between street level and the Riverwalk, landscape and streetscape improvements, improved lighting and other pedestrian enhancements. </li></ul>
Area-wide Redevelopment Partnerships <ul><li>Brooks Development Authority </li></ul><ul><ul><li>Brooks City-Base </li></ul></ul><ul><ul><li>Redevelopment of former Air Force Base </li></ul></ul><ul><ul><li>TIRZ#16: over $25 million </li></ul></ul>
Service Partnerships <ul><li>Antioch Community Transformation Network </li></ul><ul><ul><li>Sports Complex </li></ul></ul><ul><ul><li>TIRZ #11: $2 million </li></ul></ul><ul><li>Dr. Frank Bryant Health Center / Barrio Comprehensive Health Clinic </li></ul><ul><ul><li>TIRZ #11: $2 million </li></ul></ul>
TIF Regulations/Policies <ul><li>Chapter 311 of the Texas Property Tax Code – “The TIF Act” </li></ul><ul><ul><li>“ But For” Test </li></ul></ul><ul><ul><li>Types of TIRZ </li></ul></ul><ul><ul><li>TIRZ Requirements </li></ul></ul><ul><ul><li>Eligible Expenses </li></ul></ul><ul><li>COSA TIF Guidelines </li></ul><ul><ul><li>http:// www.sanantonio.gov /planning/ </li></ul></ul>
Petition-Initiated TIRZ <ul><li>Petition Process </li></ul><ul><ul><li>Petitioner must own more than 50% of appraised value of zone </li></ul></ul><ul><ul><ul><li>Can be a group of property owners petitioning together </li></ul></ul></ul><ul><ul><li>Area must meet Constitutional and statutory requirements - must demonstrate that it is unproductive, underdeveloped or blighted and physical demonstration of that condition is that it arrests or impairs the growth of the zone, retards housing, or constitutes an economic or social liability and is a menace to the public. </li></ul></ul>
City-Initiated TIRZ <ul><li>City determines boundaries </li></ul><ul><li>Inner City determines projects through an RFP/RFQ process to solicit and approve projects within the TIRZ </li></ul><ul><li>Verano will develop around the TAMU-SA campus </li></ul><ul><li>MidTown, Mission Drive-In and Westside were designated in December 2008 </li></ul>Westside (#30) Verano (#28) Mission Drive-in (#32) MidTown (#31) River North (#27) Brooks City-Base (#16) Inner City (#11) Houston Street (#9)
City-Initiated TIRZ <ul><li>City has another option for TIRZ designation: </li></ul><ul><ul><li>If the proposed project plan for a potential TIRZ includes the use of land in the TIRZ in connection with the operation of an existing or proposed regional commuter or mass transit rail system, or for a structure or facility that is necessary, useful, or beneficial to such a regional rail system, the governing body of a municipality may designate an area as a reinvestment zone. </li></ul></ul>
How a TIF Works <ul><li>Twice a year the City invoices participating taxing entities for the portion of taxes collected in the zone depending on their participation level </li></ul><ul><li>Revenue collected is used to reimburse the developer for eligible infrastructure costs </li></ul><ul><li>Developers submit their invoice and supporting documentation to the TIF Unit for review </li></ul><ul><li>Once staff reviews the reimbursement request, staff will call a TIRZ board meeting to approve the invoice </li></ul>
Eligible Costs Environmental impact studies or other studies, costs to publicizing creation of zone, costs of implementing project plan; Professional Services: architectural, planning, engineering, legal services; Administrative Costs; Cost of Operating Reinvestment Zone and project facilities Costs of providing municipal services; relocation costs Organizational Costs Financing Costs, interest paid to indebtedness or other obligations; Interest before and during construction Interest Clearing and grading of land; Real property Assembly costs; Acquisition, Demolition, Alteration, Remodeling, repair of existing buildings, structures, fixtures; New Buildings, Structures, Fixtures Real Property Acquisition and Construction of public works; facilities, utilities, streets, street lights, water, sewer, pedestrian malls and walkways, parks, flood and drainage facilities, parking facilities; road, sidewalk, or other public infrastructure (in or out of zone); Public Facilities Public Improvements
Eligible Costs Payments at the discretion of the governing body of the municipality; Any contributions made by municipality from general revenue; Any Costs to implement project and financing plans Discretionary Railroad or Transit facilities (in or out of zone); Transportation/Transit: Costs of Bus Rapid Transit, a fixed guideway, high occupancy vehicle lane, bus way or bus lane; transit center or station; maintenance facility; real property for bus rapid transit; rail transportation, tracks, rail line, depot, maintenance facility or real property (in or out of zone); preservation of land Transit Beautification, conservation; Façade improvements on public or privately owned buildings Historic Preservation Educational Facilities: equipment, real property, public school (must be used jointly); Costs of buildings, schools, or other educational facilities (local ISD, community college district or political subdivision Educational
Eligible Costs Areas of public assembly (in or out of zone) Open Space/public spaces Provision for Affordable Housing (in or out of zone) Affordable Housing Remediation of contaminated public or private owned land or buildings; Demolition of public or private building Brownfields/Blight Elimination Diversifying economy, eliminating unemployment, and underemployment, expanding and stimulating business and commercial activity (make loans and grants); all powers granted under chapter 380 Local Government Code Economic Development
Contacts <ul><li>Jonathan C. Lane, Senior Management Analyst </li></ul><ul><li>Planning and Community Development Dept. </li></ul><ul><li>Tax Increment Financing </li></ul><ul><li>207-3382 </li></ul><ul><li>firstname.lastname@example.org </li></ul>
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