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Committee discusses TIF-style revenue diversion for East Side and tables final decision
Summary
Committee members debated creating a tax increment financing–style revenue diversion (a ‘rev grant’) for East Side capital projects, discussed timeframes and protections, and asked staff for financial projections for an 80%/30-year scenario.
The City Council CBA committee on May 12 discussed a TIF-style revenue diversion for the East Side—described in the meeting as a “revenue diversion” or “rev grant” rather than a formal Community Redevelopment Area (CRA)—but tabled a final decision pending staff projections and draft ordinance language.
Committee members discussed whether to adopt a long-term revenue capture (30 years at roughly 80% of incremental taxes was one proposal mentioned) to pay for capital improvements inside the East Side boundary, and how to structure protections so that future councils could not unilaterally withhold funds. Philip Peterson, council staff, said the office previously modeled growth rates (5%–10%) and estimated a 30-year incremental range between roughly $130 million and $500 million under a CRA-like structure, depending on growth and the dedicated increment percentage. The committee asked staff to return more detailed projections and maps.
Speakers cautioned about trade-offs between a formal CRA and an ordinance-level revenue diversion. A CRA established under state law typically requires the incremental tax revenues defined in the originating ordinance, while a locally created revenue-diversion ordinance could be changed by a future council vote; staff said a statutory CRA can be harder to alter but can take longer to establish and is subject to state-level policy risk. One council member noted a recurring pattern at the state level of scrutiny of CRAs in recent legislative sessions.
Several committee members supported a multi-decade capture model to preserve long-term funding for East Side infrastructure and to ensure the initial investment is sustainable; others emphasized design choices (percentage of increment captured, eligible capital items, and whether forgone city revenue would be replaced) that would need to be spelled out in any ordinance or legislative language. The committee asked staff to return revenue projections for the 80%/30-year scenario and associated maps at a future meeting.
Ending: The committee tabled further action on a TIF-/rev-grant structure and asked staff to provide projections and maps for the committee’s next meeting.
