TIF Funding & H Street Meeting

Reposted from the listserv (emphasis added on the portion in blue):

When: Tuesday, September 12, 2006 6:00 PM-8:00 PM (GMT-05:00) Eastern Time (US & Canada).
Where: Atlas Performing Arts Center

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PURPOSE:
TO DISCUSS PRIORITIZATION OF TAX INCREMENT FINANCING (TIF) SPENDING ON THE H STREET NE GREAT STREETS CORRIDOR WHEN A PROPOSED NEIGHBORHOOD TIF DISTRICTS IS APPROVED AND FUNDED. TIF IS A WIDELY USED ECONOMIC DEVELOPMENT TOOL CREATED TO PROVIDE A FINANCIAL INCENTIVE TO PROPERTY OWNERS/DEVELOPERS COMMITTED TO CREATING MORE HOUSING AND RETAIL OPPORTUNITIES IN ELIGIBLE AREAS.

TARGETED AUDIENCE:
H STREET NE PROPERTY AND BUSINESS OWNERS, ANC GROUPS, H STREET NE MAIN STREET, RESIDENTS

LOCATION:
ATLAS PERFORMING ARTS CENTER

MORE INFORMATION ON TIF AND HOW IT WORKS:
http://dcbiz.dc.gov/dmped/cwp/view,a,1365,q,603599,dmpedNav,|33028|.asp

ADDITIONAL BACKGROUND:
The District Council enacted the Neighborhood Investment Act of 2004 that directed the Mayor to develop a neighborhood investment plan for Neighborhood Investment Program Target Areas. One provision of those plans involved using tax increment financing (TIF) to fund neighborhood improvements and private reinvestment in the targeted areas. The Office of the Deputy Mayor for Planning and Economic Development (DMPED) commissioned the team of Bay Area Economics, Retail Compass, LLC and Stanmore Associates to analyze the opportunities initially in four business districts:

• Georgia Avenue - Petworth from Kenyon Street to Upshur Street, NW;
• H Street, NE from 2nd to 17th Street, NE;
• Martin Luther King (MLK), Jr. Avenue in three segments starting from Good Hope Road on the north and reaching Waclark Street, SE on the south; and
• the Shaw neighborhood from O Street to Barry Place and from 11th to 5th Street, NW.

This analysis encompasses:

• detailed assessment of retail market demand and supply;
• identification and evaluation of potential retail redevelopment sites;
• recommendation of specific retail developments that will meet neighborhood needs, reduce outflow of consumer dollars and support neighborhood business district revitalization;
• calculation of the potential tax increment financing revenues; and
• strategy recommendations on public investments to support retail revitalization.

Tax Increment Financing

TIF involves earmarking the new real property and sales taxes generated by business district revitalization to pay for the public and private investments that make that redevelopment possible. A key tool for public/private partnerships, tax increment financing allows the District to pledge future tax revenues - revenues not already committed to meeting citywide operational needs or debt service - to support infrastructure and public space improvements as well as provide incentives to private developers investing in key redevelopment projects.

For each targeted area, the District defines a tax increment district from which incremental revenues are collected and within which tax increment dollars can be spent to support redevelopment. The level of sales taxes and value of real property are "frozen" at the time that the TIF district is formed. This base of current sales taxes and the real property taxes generated by the current property values continues to flow to the General Fund and is not affected by the creation of the TIF district. Once the TIF district is formed, the future increases in sales taxes and the real property taxes generated by the future growth in property values are termed "incremental" taxes. These incremental taxes are directed to a designated TIF revenue fund separate from the District's General Fund. The District can then spend those dollars on revenue bonds issued to finance redevelopment projects. These revenue bonds are secured by only the tax increment revenues and do not represent an obligation on the District's General Fund. Thus, the neighborhood business district redevelopment is self-funding with the revitalization creating higher sales taxes and property values.

TIF as a Revitalization Tool

TIF can fund several alternative and/or complementary strategies to encourage revitalization of the targeted neighborhoods. Some rely on public sector investment in traditional infrastructure improvements. TIF financing could supplement capital budget funding for street reconstruction, streetscape and other public space improvements. TIF has the advantage of greater flexibility than many public investment programs; it can be used for direct investment in private redevelopment projects as well.

Potential strategies suitable for TIF funding include:

• streets, streetscape, sidewalk and signage improvements;
• other public space improvements (e.g., plazas, public art);
• catalyst cultural/arts projects;
• station area improvements for new Light Rail Transit (LRT) lines;
• joint off-street parking facilities to support merchants in historic and other storefronts without sufficient parking;
• off-street parking facilities to replace on-street parking that might be displaced by LRT improvements;
• financial assistance to developers building structured parking;
• site assembly and business relocations to create developable parcels at key locations;
• technical assistance to area retailers;
• business loans and grants for building rehabilitation, façade improvements and/or building fit-out;
• utility connections from mains in the street to individual buildings (important to complete before streetscape investments improve area sidewalks);
• pedestrian links to the Anacostia waterfront and other amenities;
• subsidies to support development of mixed-income and affordable housing;
• conversion of obsolete retail space to other uses; and
• incentives to attract supermarkets, anchor stores and other key retailers.

NOTE

STREETSCAPE IMPROVEMENTS ARE ALREADY BUDGETED FOR H STREET NE THROUGH DDOT GREAT STREETS FUNDING SOURCES. THE CONSTRUCTION SCHEDULE FOR THOSE STREETSCAPE IMPROVEMENTS DOES NOT HINGE UPON THE AVAILABILITY OF TIF AND THOSE IMPROVEMENTS WILL BEGIN PER THE SCHEDULE PROVIDED BY DDOT GREAT STREETS STAFF.

CONTACT

DERRICK LANARDO WOODY
COORDINATOR - GREAT STREETS INITIATIVE
OFFICE OF THE DEPUTY MAYOR FOR PLANNING & ECONOMIC DEVELOPMENT
1350 PENNSYLVANIA AVENUE NW
SUITE 317
WASHINGTON, DC 20004
Email: derrick.woody@dc.gov
Phone: 202.727.2981 (direct)
Fax: 202.727.6703