Published Date Written by Craig LyonsA push to revise the city's policies for tax increment financing has cleared its first hurdle with a recommendation for passage from the Housing and Community Development Committee.
The TIF policy that's under development moves the city away from credit enhancement agreements — which tend to be site specific — and leans toward larger TIF districts that officials say maximize the potential public benefit through funding public infrastructure improvements, economic development projects and staff. The committee has worked on refining the TIF policies since August.
The general principle of tax increment financing is to use anticipated gains in taxes to pay for current improvements.
The two unresolved issues in the TIF policy that the committee handled during the meeting were setting the term limits for CEAs and whether tax increment financing would remain subject to the city's green building code.
The policy sets a term limit of 20 years for credit enhancement agreements and caps the benefit to developers at 65 percent. The 65 percent cap is on the average developer benefit that's realized during the duration of the CEA. The cap means that only 65 percent of the new property valuation will be directed into the TIF and the rest will go into the city's general fund.
A prior incarnation of the policy set the cap at 50 percent and was increased to 65 percent because the lower cap would have excluded nearly all the city's active TIFs from approval.
Councilor Kevin Donoghue said he was more in favor of keeping the 50 percent cap instead of raising it. He said he'd be more comfortable extending the allowed term for CEAs from 20 to 30 years.
The other three members of the committee sided with the staff's recommendation of a 65 percent cap for a term of 20 years.
New language added to the policy states that the 20-year term limit wouldn't start until a threshold of assessed value is reached.
The other matter the committee discussed was whether or not to continue linking TIFs with the city's green building code since a majority of the active agreements have had that requirement waived.
The committee opted to keep the linkage in the policy but recommend the council amend the green building code.
Councilor Ed Suslovic said he'd like to strike the linkage in the policy since the committee knows the code is broken.
Jeff Levine, the city's planning director, said breaking the linkage between the two policies would need to be done on the building code side. He said there's language in building code that requires TIFs comply with the standards.
Levine suggested the council amend the code rather than break the link.
"The way that it's worded right now, there's a lot of complications," he said.
Donoghue said he'd like to see the committee's recommendation go to the council with the caveat that the green building code is revisited and revised.
Some of the other major revisions in the policy include:
• Provisions that would allow TIF money to be used for public infrastructure improvement, economic development projects and staff.
• As a part of the application for a TIF, the city will now ask developers to provide a plan that outlines the number and quality of jobs that would be created by the project, according to the draft policy, but job creation is not a requirement for the request to be granted.
• The policy outlines priority revitalization areas where the city would like to encourage development, including the India Street neighborhood, the Franklin Street corridor, the Portland Technology Park, St. John Street Valley and Libbytown. The designated areas are simply places where the city would like to see projects be sited and are not a requirement of developers.