TIF plan is long-term investment in downtown Aurora
By Bill Wiet Aurora Chief Development Officer email@example.com February 22, 2013 12:10PM
This will be a column mug of Bill Wiet, chief development officer for the city of Aurora
Updated: March 26, 2013 9:31AM
It is interesting that the proposed Tax Increment Financing (TIF) agreement for Restaurant Row is considered controversial for some, given that we have a successful example of just such a project across the street. That example is Ballydoyle, where a series of vacant and blighted industrial buildings were transformed into a successful restaurant through the combination of private investment and Tax Increment Financing assistance.
It is important to understand that the dollars used to support projects in TIF zones come from businesses within the zone itself, not from residents throughout the entire community.
These TIF dollars are generated when improvements made in a TIF zone result in an overall increase in property values within the TIF district. The additional property tax revenues created or reasonably anticipated must be used to support development projects within the TIF Zone.
The failure to utilize TIF dollars to spur development in the TIF zone in which they are generated would be a mistake, because there is an expectation that an increase in long-term Equalized Assessed Value (EAV) will take place, benefiting local taxing bodies when the TIF expires.
In 2009, local taxing bodies, like School Districts 129 and 131, agreed to support a 12-year extension of TIF #1. They clearly expected the city would support further development within the TIF to create a stronger commercial tax base that would benefit them in the future.
And clearly, the stronger the commercial tax base is, the less dependent the city, our school districts and other taxing bodies are on residential taxpayers.
In this particular case before the City Council, the private investment in the portion of Restaurant Row that will become home to Aliano’s is over $1 million, while the TIF contribution is $550,000. Another $280,000 of TIF dollars will be used to purchase an adjacent building upon which there is currently a $369,000 debt. This building can be a stand-alone restaurant going forward or could combine with its neighbor to the west to create a larger restaurant. Thus, this deal includes not one but two restaurant spaces.
In any case, this is not about a particular restaurant or a particular developer. This is about matching TIF dollars with private investment dollars to create viable restaurant infrastructure where there is now only blight. No matter who the future building owner or future restaurant operator is on that block going forward, there will always be usable, tax-generating restaurant infrastructure that is not there today. That is our purpose here, and that is the purpose of a TIF district. Ballydoyle is an excellent example of what can result.