The City of Columbus is considering the use of Tax Increment Financing for reconstruction of 23rd Street. The bulk of the work will take place in 2022.
This is the first time the City of Columbus itself would be a recipient of the TIF financing. The TIF would be to offset an estimated $9 million-plus dollars in cost to the City. The Nebraska Department of Transportation estimated a $29.5 million cost for the project, according to a Nov. 27, 2020, Telegram article.
The City is paying 100% of the betterment costs of the project and 20% of all other costs, according to a publicly-available memo. The betterment part is replacing old water and sewer mains and the non-betterment is the reconstruction of paving, sidewalks, traffic signals and lights.
“The City expense of that has dramatically increased as they update our estimates for the project,” City Administrator Tara Vasicek said. “The City started considering other funding options for the project.”
With some of the funds, property owners in the designated area would be eligible for direct grants for TIF-eligible expenses on improvement projects on their property.
“TIF-eligible expenses are all determined by state statute,” she said.
A general rule of thumb includes façade improvements, so anything that improves the appearance of buildings, such as awnings or storefronts. Landscaping would also be eligible, for example new shrubs and trees.
“If the City code says a minimum for a building material for siding is lap siding but they do brick, the cost difference between those two things is TIF-eligible,” she said. “So if you’re making an upgrade over the minimum code.”
The Columbus City Council is set to have a public hearing and vote on a resolution approving the redevelopment plan at its May 3 meeting, according to Vasicek and the City Clerk’s Office.
If passed, the City would use pooled TIF, so basically the City would be able to collect any increases in property taxes for an area of many parcels. It's pooled because it covers a wide area rather than one property.
The area, which is many parcels, is all of Blighted Area Six excluding Legacy 23 Apartments and industrial tracts. Blighted Area Six encompasses 23rd Street and some surrounding areas between 33rd Avenue and East 11th Avenue.
The way the TIF would work is the City would use the 2020 property valuation of the area as a base level, according to City documents. Any increases over the base level over 15 years would be used for construction costs.
“This isn’t going to cause taxes to change,” she said. “If the taxes change, that increase would be used for this project.”
It’s an option available for alternate financing for the redevelopment on 23rd Street, Mayor Jim Bulkley said.
“It can be used to help offset and allow us to get some grants … for some of the things we want to do,” Bulkley added. “It’s just another tool in the toolbox … it makes sense to have more things that we can utilize, especially on a project such as this, where it’s a very big hit budget for the City.”
The fate of the pooled TIF doesn’t impact property valuations, Vasicek added.
For the grants, residents could apply, according to City documents, and would possibly receive up to 50% of the TIF-eligible costs of their project or up to a maximum of $15,000, whichever is less.
If a property owner applied for a grant on a $50,000 TIF-eligible project, they could be awarded up to the maximum of $15,000. But if another property owner applied for a grant on a $20,000 TIF-eligible project, the City could award up to $10,000 which would be 50% of the TIF-eligible costs.
If passed, the first round of grants would be available in the next one or two years.
Carolyn Komatsoulis is a reporter for The Columbus Telegram. Reach her via email at email@example.com.