COLUMBUS — Tara Vasicek doesn’t like the term “blighted and substandard.”
She prefers to view the areas as ripe for development — and there are plenty of them in Columbus.
Since taking over as city administrator in February, Vasicek has been approached by a number of developers interested in local projects, from hotels and apartment complexes to restaurants and retail businesses.
“There are good commercial projects that are sitting out there and are excited about Columbus, but they need an incentive, an investment to get their projects to where those developers are wanting to build the projects,” said Vasicek.
That’s where tax-increment financing (TIF) and that “blighted and substandard” designation come in.
TIF is a funding mechanism that provides capital for developers and property owners to help get projects off the ground. The funding, which comes from the city, is then repaid over a period of up to 15 years using the increased tax revenue on the improved property.
Locally, it’s been used for projects such as Hobby Lobby, Slumberland, Ramada-Columbus, Hy-Vee and the Village Centre strip mall.
Vasicek said many of the developers currently looking at Columbus are requesting TIF assistance, which is why city officials and other “key stakeholders” in the community recently worked with Omaha-based RDG Planning and Design on a study that updates the areas labeled blighted and substandard.
State law requires projects to be located in blighted and substandard areas in order to receive TIF funding.
Several factors are considered before the label is applied, including population trends, income, unemployment rates, the age and condition of buildings, percentage of undeveloped land, infrastructure layout and number of property owners within the area.
The study, which cost $2,600, focuses on nine areas in Columbus, including the 23rd Street and 33rd Avenue corridors, downtown business district, an industrial area near Platte County Agricultural Park and three locations Vasicek believes would support residential development.
Vasicek said the study targets a mix of projects ranging from large industry expansions to commercial businesses to single- and multifamily housing.
In the downtown district, for instance, there’s the potential for both commercial development and the addition of more apartment buildings and second-story living spaces above businesses.
“I’m excited about this area and hopefully we can get some good projects in this area,” Vasicek said.
The city administrator believes TIF is part of the solution to the community’s current housing shortage.
“To make a dent in the housing problem, we really have to do some high-density projects, and they’re very expensive to do,” said Vasicek, who noted that a market-rate apartment complex with more than eight units hasn’t been constructed in Columbus in nearly 30 years.
“That’s obviously a huge contributing factor for why we’re having a housing issue right now,” she said.
Three areas — between 48th and 33rd avenues just north of the Union Pacific Railroad tracks, east of 18th Avenue near Columbus Municipal Airport and east of East 14th Avenue near the new Frontier Park and Armed Forces Readiness Center in northeast Columbus — are included in the study specifically for residential development.
Some of those areas, Vasicek said, won’t be developed without a financial incentive because of the high infrastructure costs.
That’s where TIF comes in. As part of the funding request, developers must prove the project wouldn’t happen without this financial support.
There are critics of TIF who argue it takes revenue away from counties, cities, school districts and other entities that collect property taxes while the funding is repaid, but Vasicek isn’t one of them.
“It is economic development,” she said, adding that TIF-backed projects grow the local property tax base for “decades and decades” beyond the payback period.
Vasicek believes Columbus needs to offer this incentive to remain competitive with other Nebraska cities.
“If a developer is coming to me with a project, they’re also going to Fremont and Grand Island and Norfolk and they’re asking them the same questions,” she said.
If approved, the study would designate about 25 percent of Columbus as blighted and substandard. State statute allows a city to go up to 35 percent, so Vasicek said there’s leeway to accommodate projects that pop up outside the nine highlighted areas.
The study is expected to head to the city council next week for approval.
“A lot of projects hopefully will happen after we get this done,” Vasicek said.