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Council approves $300,000 increase to TIF incentive for infrastructure overrun
Summary
The Committee of the Whole approved a developer request to raise a tax-increment financing (TIF) incentive from $4.9 million to $5.2 million after staff said infrastructure work encountered an unexpected $300,000 overrun; the change was approved by voice vote and staff said it should not affect the city's cash flow or bond obligations.
The Committee of the Whole voted to accept an amendment to a development agreement that increases the potential tax-increment financing (TIF) incentive for a redevelopment project by $300,000.
Adam Tagan, community development director, told the committee that the project’s infrastructure phase encountered an unexpected $300,000 cost overrun. "They're asking that the total potential amount of that incentive be increased from 4.9 million to 5.2 million which is the 300,000 difference," Tagan said, explaining the developer finances the infrastructure and is repaid over time through incremental tax revenues.
Tagan said the agreement is structured so the city first covers existing bond obligations before any remaining increment is directed to the developer, and that "there is no impact necessarily to the city cash flow and our ability to pay back the bonding that exists on this particular project." He added that if the project underperforms, the developer might never receive the additional funding because the TIF would close after obligations are met.
A council member moved to accept the agreement as written; the motion was seconded and approved by voice vote. The council president said the paperwork will be prepared for signatures.
The committee did not provide a roll-call vote or individual tallies in the transcript. The amendment was considered a straightforward adjustment to account for an infrastructure overrun and will be implemented according to the terms of the existing development and financing agreement.
