Washington Terrace board approves FY2025 budget amendment to record first full year of Southpointe RDA tax increment

WASHINGTON TERRACE — The Washington Terrace board approved Resolution 2058 on May 20, 2025, amending the fiscal year 2025 budget to recognize the first full year of tax increment from the Southpointe redevelopment area, a staff member said.

The amendment records roughly $196,000 in tax-increment revenue that the redevelopment agency (RDA) collected in the area's first full tax year. Under the RDA’s distribution plan presented to the board, 3% of the increment will be retained for administration and operations, 10% will go to the CRA housing fund, and the remaining 87% will be available for redevelopment activities, staff said.

Cherie, a Washington Terrace staff member, told the board that the $196,000 collection exceeded earlier first-year projections of about $112,000 because property improvements in the project area raised its taxable value. “We collected in tax increment about a hundred and $96,000,” Cherie said. She said the original project anticipated a first-year increment around $112,000 but the project area’s assessed value “exceeded 30” (million, she said) compared with an earlier assumed value of about $18 million.

Cherie told board members the project area’s total allowable increment collection is capped at $743,000, and the agency will eventually reach that cap over the RDA’s allowed term. She also explained that a previously authorized $1.2 million incentive remains structured so that, until Building 2 is constructed, increment that otherwise would have gone to pay the incentive is returning to the RDA to repay that amount; the repayment will continue until the $743,000 cap is met or the 16-year term expires, she said.

“The uses of those funds — the redevelopment activity money, that 87% — Tom can navigate that with you board members at a future time,” Cherie told the board. She added that staff will bring adjustments to the tentative budget at the next meeting to reflect the collection and the repayment treatment.

Chair Allen asked for a motion to approve the budget amendment. A board member moved to approve Resolution 2058, a second was recorded, and the board conducted a roll call. Vice Mayor Lipps voted yes; Board member Thomas voted yes; Board member Deshond voted yes; Board member Parkins voted yes. The chair declared the motion approved. “Thank you. That's unanimous,” the chair said.

The board closed the item and adjourned. Staff said it will return with changes to the tentative budget and with recommendations on how to program the redevelopment funds for future RDA activities.

Notes: The record in the meeting indicates a cap on total increment collections of $743,000 for the project area, a one-time incentive of $1,200,000 subject to repayment conditions, and distribution splits of 3% administration, 10% CRA housing, and 87% redevelopment activity.