Columbia City Council Approves $3.2 Million in TIF Notes
COLUMBIA - The Columbia City Council unanimously approved $3.2 million in TIF notes for the Doubletree Hotel developers at its meeting Monday night. A TIF, or Tax Increment Finance, is a plan that allows some of a company's paid taxes to be reimbursed.
TIFs by nature are fairly complex, and each has special rules. They can apply to either sales or proerty taxes, or both. When a TIF-approved company pays its taxes, some of those go into a TIF fund. The amount put into the fund is determined by the difference between the value of current taxes and "set" taxes. When the company applies for a TIF, it's current property value becomes the "set" value. If the cost of those property taxes go up (due to infrastructure improvements, development, or anything else), the added property taxes are paid to the city, but they're put into a special TIF fund, not used for normal city business. Once the company meets the requirements set by the city, that TIF fund money can be reimbursed to the company. In this case, the Doubletree Hotel must complete construction and provide jobs in order to be reimbursed.
Sales tax TIFs are slightly less complicated. Half of the sales taxes the company pays to the city goes into that TIF fund. Then, once the company meets the requirements, it can be reimbursed from the fund.
Also in the agreement approved Monday was an extension for the Doubletree Hotel developers to secure financing. Originally the deadline was set to be Dec. 2011, now the developers have until Sep. 30, 2012 to secure that financing.
One city official said extending that deadline was more of a formality.
"They're actually breaking ground next week. They plan to be ready by football season 2013 - about a year and a half from now," said Deputy City Manager Tony St. Romaine.
Columbia City officials are also exploring creating a TIF zone in the central city to lure redevelopment and improve infrastructure. Boone County officials have come out against the plan because they say by reimbursing tax dollars to comapnies, they city is denying that revenue from schools.
Select a station to view its upcoming schedule: