Today's Economy Requires Creative Investment Strategies by Local Governments
Stewart, Cynthia E., Nation's Cities Weekly
This is the first in a series of Nation's Cities Weekly articles drawing on the resources and expertise of NLC's Corporate Partners.
As local officials know all too well, the state of the national economy is not only a national issue. Its impact is felt most directly in the nation's cities and towns, where people live and work, and as a result, city leaders are finding it necessary to create their own "economic stimulus packages" to keep their local economy strong.
Local officials also know that today's economy is not their grandparents' economy. Cities and towns are operating on a different economic playing field, with different rules and requirements, different players and different expectations As a result, officials are looking for innovative economic development programs and strategies.
One economic development tool that local governments have increasingly used is Tax Increment Financing (TIF) to finance diverse infrastructure projects for their communities. Today, 49 states and the District of Columbia have TIF enabling statutes to finance projects including retail, mixed-use, housing, transportation, brownfield remediation and community amenity development.
To help local elected officials and economic developers understand and appropriately implement TIE the Council of Development Finance Agencies (CDFA) and the International Council of Shopping Centers (ICSC) recently released a resource, Tax Increment Finance Best Practices Reference Guide, to address these elements The Reference Guide--the first of its kind--will serve a variety of public and private sector needs as a reference manual for public officials, financiers and real estate developers looking to fully understand this powerful tool.
"ICSC welcomed the opportunity to partner with CDFA on the Tax Increment Finance Guide," said ICSC President Michael R Kercheval. "Its guiding principles and case studies will help local communities and developers better understand this important yet complicated redevelopment tool."
According to CDFA Executive Director Toby Rittner, TIF can be seen as a transformational tool that resurrects blighted and abandoned communities and encourages new private sector investment and the Reference Guide will help foster and promote purposeful and appropriate application.
The four-chapter Reference Guide defines TIE its basic mechanics, best practice principles and financing variations. Furthermore, the Reference Guide presents best practices in TIF throughout the country to direct communities in the transparent and deliberate actions required for appropriate TIF use. The final chapter compiles 26 case studies to highlight a variety of TIF uses and applications.
An electronic version of The Tax Increment Finance Best Practices Reference Guide is available on the CDFA and ICSC websites at www.cdfa.net and www.icsc.org free of charge.
In addition to this useful tool, many communities have used a variety of incentives to help facilitate projects, In essence, they represent a community's investment in their own future. The returns to the local government can be outstanding: creating sales tax revenues, property taxes and significant payroll for a community's residents.
Examples of creative investment programs include local, state and federal elements. Wellprepared local governments can put packages together that make it very attractive to recruit the kind of development that meets or exceeds the economic development goals of the community.
Other examples of funding assistance besides TIF include:
CDBG--Community Development Block Grant--States can allot federal money to help offset development costs if a company is developing infrastructure (roads, water, etc. …