Staff reviews tax‑increment financing basics and GSR TIF terms
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Summary
Assistant city manager reviewed TIF mechanics and RDA program areas, noting RDA 2 expires in 2035 and RDA 1 in 2043; staff said recent TIF approvals include GSR Arena phase 1, which was eligible for up to 90% reimbursement of new increment plus a 5% donation to the city for youth sports.
Assistant city manager/attorney Ashley reviewed tax‑increment financing (TIF) mechanics and the redevelopment agency’s program areas at the Feb. 2 advisory meeting, and used recent projects to illustrate how TIF reimbursements work.
Ashley explained that when a redevelopment area is created it establishes a baseline for property tax distributions; the RDA receives the portion of tax revenue that exceeds that baseline to reinvest. She said the agency’s five primary program areas are: restore (facade/tenant improvement), tax‑increment financing, placemaking/activation, capital improvements, and property acquisition/disposition.
On TIF specifics, Ashley said the agency has seen seven applications (five under gap analysis) and two approved projects, including a 200‑unit housing project and the GSR Arena phase 1. For GSR, she said the negotiated term sheet allowed reimbursement of up to 90% of the taxes generated by that project’s increment and also included a separate 5% donation from GSR to the city earmarked for youth sports and recreation. Ashley emphasized the RDA’s "pay‑as‑you‑go" approach: reimbursements are made only after projects are built and assessed.
She also noted the agency currently has under $3 million in debt and that RDA 2 will expire in 2035 while RDA 1 expires in 2043. The assistant city manager said the agency intends to keep a conservative financing policy that avoids upfront borrowing and relies on increment generated by built projects.
Board members asked whether non‑profit or affordable housing projects that receive tax exemptions would qualify for TIF; Ashley clarified that projects that do not generate property tax (for example, certain affordable housing with federal/state exemptions) would not produce increment eligible for reimbursement.
Next steps: staff will continue gap analyses for pending TIF applications and present capital improvement proposals next month for advisory review.
