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Council hears plan to hold TIF closure proceeds in a separate fund to cover underperforming districts
Summary
Staff told council the city manages about 30 active TIF districts and identified two underperforming TIDs (Aviation Business Park and Southwest Industrial Park); staff proposed placing TIF‑closure proceeds in a separate fund to bail out underperformers only if necessary and discussed rezoning, covenant changes and marketing to find buyers.
City economic development staff briefed the council on the condition of the city’s Tax Increment Financing (TIF) portfolio and options for addressing two underperforming districts.
Kelly explained the city administers roughly 30 active TIFs and said two—identified as the Aviation Business Park and the Southwest Industrial Park—are currently underperforming and not generating increment sufficient to pay their debt obligations. She said the city received a grant for the Aviation Business Park and is close to paying its obligations there, but some Southwest Industrial Park obligations remain.
Staff described a preliminary policy approach discussed with long‑range finance and the city’s financial consultant Ehlers: instead of immediately directing TIF closure proceeds to underperforming TIDs, the city would place closure proceeds into a separate TIF reserve fund. That reserve could then be used to support underperforming TIDs only after closure, preventing the need to split new proceeds among other taxing jurisdictions and preserving the city’s ability to respond if a large new project materializes.
Council members asked about alternatives if no increment is generated in the next 24 months; staff said options include removing restrictive covenants, rezoning to heavy industrial, and marketing the shovel‑ready land at EAA and through site‑selectors and local partners. Tricia from GoADC was noted as an administrator of city revolving loan funds and partner in outreach to prospects.
No formal action was taken; staff said they will refine policy language and return with details.
