To The Daily Sun,
Urban Renewal destroyed downtown Laconia, a national example of what not to do. TIF, a synonym for Urban Renewal, is a politically appealing tool because it does not require the city to raise your tax rate. Instead,TIFs generate money for redevelopment by raising the value of the property involved that is taxed. Ops! The Laconia tax rate rose $1 because the total city assessment decreased. Could it be because of all the areas in the city declared as TIF areas?
When the TIF is established, the city looks at the value of all the property differently than all the other parcels which comprised the city's grand total assessed value used to set the tax rate. The city uses the "Equalized Assessed Value" to determine TIF .property values. This is the "Base EAV". Remember, TIFs capture money by devoting all new property taxes to "redevelopment". That means that once a TIF is established, the city of Laconia's general fund gets no new revenue from the TIF area. Their share of the property taxes is "frozen" at the level it was at just before the TIF was approved. The taxes on all the new property values in the TIF go into the TIF fund and are reinvested in that area, or may be transferred to other TIF areas.
Where does this new property value come from? It can happen in one of three ways. First, there could be new development on vacant land that, before the new project was built, paid little or no taxes. Second, there could be improvements to existing properties, such as an addition to a house, a factory, or a store. Third, the taxes on existing properties could go up, either because of inflation (sometimes called "natural growth" in property values) or because of gentrification in the neighborhood. In any of these cases, the new tax dollars go to the project fund controlled by the TIF district, not to the city's general fund.
TIF was designed to channel funding toward improvements in distressed, underdeveloped, or underutilized parts of a jurisdiction where development might otherwise not occur. TIF creates funding for private projects by borrowing against the future increase assessment generating property-tax revenues.
TIFs represents property tax dollars that would have gone into the public coffers even without the financed improvements.
What is the "Equalized Assessed Value" of the seven proposed parcels involved in the TIF "redevelopment Areas"? What is the TIF's Base EAV total property tax revenue prior to TIF, current and projected? What is the Base EAV assessed value of the land to be used for the Gateway Park? What is the projected TIF revenue? What is the projected increase in assessments for comparable abutters? The Laconia Water Co. or the Sewer Dept. are inherently part of the TIF area but do qualify as Base EAV because they do not pay property taxes, therefore, void as a property tax revenue contributor? What is the total "Equalized Assessed Value," value of the WOW Trail and Riverwalk/WOW? What is the projected revenue over the 20 year intended to offset the $1,337,800 borrowing for the seven projects. How does any TIF property tax dollars from the seven projects, not directly attributed the "redevelopment" of the downtown, going to do to revitalize the Laconia's downtown considering two prior urban renewals failed? Do the seven TIF projects meet the letter of the law?
How about simply terminating the through traffic in the area created subsequent to Urban RenewalL 1. Restore the pedestrian shopping area and place a cover such as found in other innovative shopping malls? Such a project does qualify for TIF funds currently available which could be accomplish without borrowing.
Thomas A. Tardif