The Belknap Economic Development Council (Belknap EDC) recently passed a resolution in support of the City of Laconia's use of the downtown tax increment financing district (TIF) to finance infrastructure projects that support business growth.
We specifically support use of the TIF to finance projects that will funnel local consumers and visitors to downtown Laconia, make it easier for pedestrians to circulate around downtown, and provide an activity in and around downtown that makes it a more attractive place for people to spend time and money. Projects in the October 2013 proposal by the Downtown TIF Advisory Board that would address these needs include Phase 2 of the WOW Trail, the new segments of the Riverwalk, and corresponding signage and wayfinding.
We already know that upwards of 41,000 people use Phase 1 of the WOW Trail each year. Connecting these folks to downtown via an expanded Riverwalk and WOW Trail will certainly make Laconia a more walkable city, which enhances everyone's quality of life. It will also make downtown Laconia a more desirable location for business development. Belknap EDC's economic impact analysis of the WOW Trail estimates that after completion, the entire nine-mile trail will attract over 150,000 trail users a year, with 38,000 of those users visiting from outside of the region and generating $1.8 million in new visitor spending each year. By completing more of the Riverwalk and connecting it to the WOW Trail, the city is positioning downtown Laconia to capture its fair share of this new visitor spending.
Tax increment financing is commonly used nationwide to revitalize downtowns and build infrastructure that is needed to attract private investment. Laconia's downtown TIF account currently has a balance of over $300,000 with projected revenue of $174,000 in 2014. As taxable values increase in the TIF, the incremental tax revenue (the amount generated by taxable value above the total taxable value in the TIF district when it was established) is used to pay the debt service on infrastructure improvements financed by the TIF. The projected TIF revenue over the next 20 years is at least $4.2 million.
In other words, the city can borrow, without risk, against the annual tax revenue generated by the TIF district. As future private investment is made, more revenue will be generated for further improvements. As TIF money is leveraged to make significant enhancements in the downtown area, the downtown area becomes more attractive and poised for new development.
Belknap EDC is encouraged by the forward thinking of the Downtown TIF Advisory Board as well as the interest and support expressed by the City Council. We encourage City Council to work cooperatively with the TIF Advisory Board to come to a consensus on TIF funding priorities soon, and then move forward and bond the recommended projects. The downtown TIF district was created by the City Council in 2004 with the purpose of financing public improvements that encourage economic expansion. Let's do just that.
(Sean Sullivan is chair of the Belknap Economic Development Council.)