City Leaders Try to Sell TIF Proposal

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COLUMBIA - Columbia city leaders told key decision-makers Tuesday that $200 million of private investment will be left on the sidelines if the city does not move quickly to set up a tax increment financing (TIF) district for downtown Columbia.

Deputy City Manager Tony St. Romaine told the Columbia Tax Increment Financing Commission that several student-housing developers want to get in the downtown game but they need capable infrastructure.

In December, city hall put a freeze on any new development in downtown Columbia. City leaders told KOMU 8 news at the time that current businesses have exhausted the electric, sewer, road and sidewalk infrastructure in place that enables developers to build in the core of downtown.

To thaw the freeze on development, St. Romaine said a TIF is needed and is the only viable option. St. Romaine said TIF is the only way to make business boom without raising taxes.

TIF would freeze the portion of sales and property tax revenue that goes from downtown businesses to local government entities like the Boone County government and Columbia Public Schools.

TIFs are created with the assumption new development will increase economic activity, which will, in turn, create additional tax revenue.

The level at which the city freezes revenues is called the base. Any additional revenue above the base would go into a city fund to pay for infrastructure projects.

St. Romaine tweeted a diagram in early February of how the TIF proposal would work: 


St. Romaine said the city has identified $20 million worth of improvements it could make quickly to electricity, sewer and water infrastructure.

Overall, the city has identified $70 million worth of improvements it would like to make to downtown. The projects range from more improvements to utility infrastructure to streetscape and beautification projects.

The city included an extension of Elm Street on its list. St. Romaine said the city would like to extend Elm Street to reach beyond where it ends at Hitt Street. St. Romaine said the city would like Elm Street to reach over to College Avenue.

Columbia School Board member Jonathan Sessions told KOMU 8 News he has no problem with increased development in Columbia, but he worries a TIF would divert revenues that the school district would otherwise depend on. Sessions said the city has not put out enough numbers yet, and he is not sure the school district will get a fair piece of incremental tax revenue. The incremental tax revenue is the new revenue that comes in above what the base is set at.

"All of our budgets include growth," Sessions said. "That's expected revenue and right now a TIF would remove that expected revenue which would put the burden back on a school district to figure out how to keep the promises to our voters."

Boone County Counselor C.J. Dykhouse filed suit against the city Feb. 7, saying the city does not have the authority to set up a TIF district. The county and the 911 call center are also stakeholders in the TIF debate, because those entities could be impacted by a decision on the level of incremental tax revenue that goes back to them.

St. Romaine said city leaders are aware of the concerns of the taxing entities and said they would get a fair deal. St. Romaine said the city would look to give a portion of the incremental tax revenue back to the entities.

Sessions said utility fee increases and revenue bonds could raise the revenue needed for infrastructure and the taxing entities would not lose out on any of the benefit of increased economic activity. City councilman Karl Skala told the Columbia Daily Tribune Sunday that he would be in favor of an increase in fees charged to developers to pay for the projects.

St. Romaine and City Counselor Nancy Thompson fielded several questions from TIF commission members. St. Romaine said downtown infrastructure is currently unable to handle the "normal, organic" growth that occurs downtown each year. One member asked the committee why the city is behind in constructing adequate infrastructure. 

The TIF commission met for the first time this year on Tuesday, and it marked the first meeting held after reports of the TIF idea became public. The TIF commission can either vote yes or no on the proposal. If the commission votes yes, it recommends that the proposal go on to the city council.

The city did not present a cost-benefit analysis or an official plan at the meeting. St. Romaine said city leadership will also discuss the TIF with the city council at the Feb. 17 meeting.