De Soto City Council looking at TIF policy
Elvyn J. Jones
As part of its ongoing discussion about how to stimulate economic development, the De Soto City Council signaled last Thursday its willingness to adopt a TIF policy.
Earlier this year, the council had several discussions, including a special meeting, on ways to stimulate economic development in De Soto. One suggestion was a policy spelling out what the city would be willing to offer those seeking tax increment financing.
So-called TIF allow developers to set aside property or sales taxes owed on improvements to paying off debt incurred for building roads, sewers and other infrastructure on new development.
The benefit of having such a policy in writing is that it tells potential developers upfront what the city’s attitude is toward TIFs, City Administrator Patrick Guilfoyle said.
De Soto benefited from recent work Jeff White, the city’s financial consultant, did for other Johnson County cities, Guilfoyle said.
The TIF policy is much like the tax abatement policy the council adopted last year, Guilfoyle said.
The draft policy states that the city would determine each TIF request on a case-by-case basis with the recognition projects differ and have varying consequences on to the community.
Before a formal TIF application was made, an internal team of city staff, the De Soto Economic Development Council director, the city’s contracted financial advisor and its bond counsel would meet with the developer to review the proposal.
If after that initial round of reviews it was agreed a project should move forward, a developer would submit a more detailed proposal that would include a site plan to the review team. The city would also expect any developer to work with the school district and Johnson County about consequences to those jurisdictions from the project and help assure their support for the project.
The draft policy specifically doesn’t promise a total tax write off. It is generally expected “that a portion of the new revenues from any new development will immediately accrue to the city’s benefit and to the benefit of other taxing jurisdictions in the community,” the draft states.
Under the policy, the city would grant priority consideration for the use of TIFs for downtown projects, brown-field development, rehabilitation of historic structures, the full development of a commercial or industrial park or those projects producing high-quality jobs with benefits and wages equal or better to those paid in that industry or business in the metropolitan area.
Others considerations to be used to review each TIF application would include
• Extraordinary or unique costs associated with the project.
• The applicant’s financial investment and rate of return from the project.
• The property, sales and other tax and fee revenue that could result from the project.
• The creditworthiness and experience of the developer.
• The extent public investment leverages private investment.
• The extend to which the proposed project furthers existing city general or economic development goals.
• The extent the project leverages existing public infrastructure and its need for future public infrastructure improvements.
• The project’s ability to address unmet community needs, such as a particular type of retail, office development or housing.
• The value added, including intangible costs and benefits, to the city and other taxing jurisdictions.
But Guilfoyle said it would be at the council’s discretion whether a TIF proposal was accepted.
Council members were pleased with the draft and indicated they would be read to adopt the policy at its next meeting.