A one-time dire forecast for a tax fund used to redevelop downtown and Newtown has turned around, thanks to a rosier economic prediction from the state.
Two years ago, the city was forecasting tax-increment financing, or TIF funds, to be $4.4 million in the hole this fiscal year and as much as $19 million in the red by the time the TIF ended in 2016.
The city predicts the fund will break even, as it is supposed to, when it expires.
The TIF is created by freezing the tax rate in a designated area. When property valuations or tax rates rise, the increase in tax revenue is put into a fund to pay for redevelopment projects in the city.
Because TIF money comes from property taxes, just like the city’s revenue, the funds took a big hit in recent years with the dramatic decline in property values.
But now the state is predicting a recovery in housing prices. This year, the city is expecting to collect $7.6 million in property taxes. After another decline next year to $6.6 million, the city forecasts a slow rise in revenues each year to 2016, when it believes property taxes could bring $9.4 million to the city.
Also helping this year’s TIF budget was the elimination of a $4 million contribution to the parking facility the city shares with the county at the justice center on Ringling Boulevard. Using that garage became unnecessary for the city, once the parking garage in the new police station opened in late spring.
A parking garage on State Street, which the city is obligated to build within the next four years, will be funded through TIF funds. About $6.5 million was to be set aside for a Pineapple Square parking garage on State Street, but last week the city approved a new development agreement with Pineapple Square.
That agreement gives control of the State Street parking lot back to the city and requires the city to build a garage with at least 300 spaces within four years.
The price would be determined during the bidding process, but the Palm Avenue garage is being built for about $17,000 per space. At that rate and size, the total cost of a State Street garage would be about $5 million.
But the city had a study done to show that a four-level garage on State Street could contain 690 spaces. That could cost $11.7 million.
To download a PDF of the TIF funds projection from 2010-2016, click here.
Contact Robin Roy at firstname.lastname@example.org.
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