HomeMy WebLinkAbout032106 Resort Area FinancingFINANCING OPTIONS
for the Resort Area
MARCH 21, 2006
Presented by: Catheryn R. Whitesell
OVERVIEW
Tax Increment Financing Districts
?
Resort Area TIF’s
?
Special Service Districts
?
Tax Credits
?
Tourism Growth Investment Funds
?
TIF DISTRICT ILLUSTRATION
TIF GUIDELINES
Demonstrate a clear need for public investment to facilitate
?
the private improvements.
“But for”public investment economic opportunity would not
?
occur within the proposed TIF district or that decay may
occur without the public investment.
Non TIF revenues (Personal Property, Business
?
Professional Occupancy License, Meal, Hotel, and General
Sales) should ultimately exceed that of the incremental TIF
Real Estate taxes.
Limiting TIF’s to 20 years or less.
?
Use PAYGO financing over Debt to the extent possible
?
LARGE OCEANFRONT TIF
Natural Assessment
Growth Only @ $1.0239
NPV @ 20 yrsNominal 20 yrs
$218.3 million
$434.7 million
NORTHERN OCEANFRONT TIF
Natural Assessment
North
Growth Only @ $1.0239
NPV @ 20 yrs Nominal 20 yrs
$ 74.8 million
$ 149.5 million
CENTRAL OCEANFRONT TIF
Natural Assessment
Growth Only @ $1.0239
NPV @ 20 yrsNominal 20 yrs
Central
$ 77.3 million
$ 153.5 million
SOUTHERN OCEANFRONT TIF
Natural Assessment
Growth Only @ $1.0239
NPV @ 20 yrsNominal 20 yrs
$ 66.2 million
$ 131.7 million
South
ATLANTIC AVE + PACIFIC AVE EAST
OCEANFRONT TIF
Natural Assessment
Growth Only @ $1.0239
NPV @ 20 yrsNominal 20 yrs
$ 71.8 million
$ 142.3 million
LARGE OCEANFRONT TIF
ASSESSMENT GROWTH
Base Assessments vs TIF Assessments
7,000
6,000
(in millions)5,000
4,000
3,000
2,000
1,000
0
0607080910111213141516171819202122232425
Fiscal Year
Base AssessmentsTIF Assessments
TIF’s AS A PERCENTAGE
OF TOTAL ASSESSMENTS
Year 1Year 5Year 10*
Existing TIF’s3.4%4.5%4.0%
Existing TIF’s + Large 4.2%6.4%6.5%
Contiguous Oceanfront TIF
* The Lynnhaven Mall TIF is terminated in FY 13-14.
Establish a policy limiting TIF’s as a percentage of total City
assessments, a cap of 5% would avoid long term impacts on
service delivery.
SPECIAL SERVICE DISTRICT (SSD)
Use to deliver special services, maintenance, or
?
project to a defined geographic area.
Additional real estate tax rate is charged to cover the
?
cost of the special services (should include operations
and maintenance).
Precedent of requesting property owners to indicate
?
support of the tax increase (like Sandbridge).
Determine size of district to receive special services.
?
OCEANFRONT SPECIAL
SERVICE DISTRICTS
Real Estate Per Year
Year 1Year 5
Large Contiguous TIF…1¢= $ 218,500$ 294,800
?
Atlantic plus Pacific East…1¢= $ 96,500 $ 122,500
?
North Resort TIF…1¢=$ 61,600 $ 86,900
?
Central Resort TIF…1¢= $ 84,000$ 111,600
?
South Resort TIF…1¢= $ 72,900 $ 96,300
?
TAX CREDITS
Encourages redevelopment on specific properties
?
over 20 years in age.
Allows 15 years of tax credit on the portion of
?
property redeveloped.
Best used for small individual projects.
?
Tax Credit
TAX CREDIT PROGRAM
Year 1
Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
Year 10 Year 11 Year 12 Year 13 Year 14 Year 15
Growth with Tax Credit
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
TOURISM GROWTH
INVESTMENT FUND (TGIF)
TGIF has historically been used to support
?
resort area projects and maintenance.
Significant capacity was used to support the
?
Major Projects Fund
TGIF CAPACITY
Projected Annual TGIF Surplus
$18,000
$16,000
$14,000
In Thousands
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$-
070809101112131415161718192021
Fiscal Year
DISCUSSION
What are we trying to accomplish, what
is the problem to be solved?
Then . . .
What financing tools are needed?