16 - Tax Increment Financing Discussion

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a Cause, project plans to be prepared, approve and implement the plans, and otherwise achieve the purposes of the plan; u Acquire real property by purchase, condemnation, or other means to implement project plans and sell that property on the terms and conditions and in the, mainner it considers advisable; ° Enter into agreements, including agreements with bondholders, determined bythe governing body of the municipality to be necessary �r convenient to, imiplement project plans and achieve their purposes; w Acquire, construct, reconstruct, or install' public works, facilities, orsites orother public improvements, including utilities, streets, street lights, water and sewer facilities, pedestrian malls and walkways, parks, flood and drainage facilities, 0rparking facilities, but not including educational facilities. Three funding mechanisms may be utilized by a TIRZ: 1. Pay-as-you-go uses the funds as they become available to finance projects. This involves the least amount oJrisk but may not beable to finance larger scale projects. 2. lssuebonds and finance projecNs)with debt. The expectation is that the, sooner the public portion is completed, the sooner private investment begins and the debt obligations are met. I Reimbursement to developers. The public project is funded and constructed by the private sector; the developer is then reimbursed asthe incremental tax revenues are collected. This process ban incentive to the developer to work for a successful project which will grow in value. The most significant advaotageisthstaDRZdoeamo1requirenewtaxesmrasseysmentsin#rdertmfund improvements. The development pays the costs through increased captured revenue. Depending upon how a project is financed, the risks to the local'govern,ment can be minimized by placing the burden on the private developers to generate the added value. There is no federal oversight and state review is limited toannual reports.