EDIC receives status update on pilot property-tax exemptions and TIF districts; many exemptions have matured

EDIC staff presented an update on the status of the city's pilot property-tax exemption program and tax-increment-financing (TIF) districts, reporting that several exemptions have already expired and that TIF districts have generated substantial increases in assessed value since their base years.

Jim Gilmore (EDIC staff) said the city is still completing job-creation reporting for older exemptions and that staff will follow up with more complete employment figures at a future meeting. He presented program-level figures, telling the committee the pilot program has supported apartment construction near the university and in core neighborhoods and that, historically, a number of pilot exemptions have now ended and are paying full property taxes. Gilmore described the pilot program mechanics (previously presented as a 10-year exemption with a 5-year at 50% and a following 5-year at 100% schedule) and noted staff discussions about simplifying the structure to a seven-year 100% exemption to reduce administrative overhead while producing similar present-value results.

Staff reported that several pilot exemptions have already expired and started paying full property taxes and that more expirations are scheduled over the next decade. Gilmore said the city has supported a large number of downtown and near-campus housing projects under the pilot and that roughly $43 million in previously exempt value has matured and returned to the tax rolls, with another roughly $96 million scheduled to expire over the next dozen years (figures provided by staff in the meeting packet).

On TIF, staff reported that the base-year value of the city's TIF districts was comparatively small at formation and that total current values have grown substantially. Gilmore said one recently expired TIF was a 15-year maximum project and that from 2020 to 2024 about $140 million in value matured and left TIF. He summarized several TIF districts and public-parking and public-partnership projects that produced large increases in value (examples included Roberts Commons and Mercantile projects) and said the riverfront TIF will have about $900,000 available next year and could grow to roughly $1.5 million annually as other districts mature.

Commissioners discussed affordability and whether new pipeline projects are likely given rising construction costs, higher interest rates and constrained state and federal funding. Staff said state housing programs and tax-credit programs remain available but that assembling affordable-housing finance remains more challenging than in prior years. Gilmore said he will provide more complete job-creation and project-status information in a future update to the committee.

No formal action was taken; the presentation was delivered for information and to guide future policy consideration.