Atlantic City Council passes Tax Increment Financing Policy
November 7th, 2012 by Ric Hanson
After nearly 30-minutes of discussion and a tweaking of the wording, the Atlantic City Council, Wednesday evening, passed a resolution establishing a Tax Increment Finance (TIF) Policy, which has been in the works for months. Councilman Shaun Shouse, said the process involved input from a Citizen Task Force, the Community Development Committee, suggestions from the City Attorney and Bonding Attorney, along with local developer Don Sonntag. Shouse said Bond Counsel Bob Josten suggested the City specifically state in the policy that preference be given to the use of property tax rebates when considering TIF projects, since that results in lower costs to the City by eliminating the bonding process. He said it doesn’t prohibit the City from doing “up-front” grants bonded, or otherwise.
Another suggestion puts the burden on the developer to demonstrate financial assistance is necessary in the amount as warranted, based on “public benefit.” He says that refers to a “Cost-benefit analysis” type of reasoning being used for the TIF. It means people need to be aware that not everyone who requests TIF will receive the maximum amount, and that the City will consider whether the project warrants public input, and that the amount requested is reasonable, considering the benefits back to the City and its residents.
Josten also suggested the City be very clear in how it words “Incremental Taxable Value,” so that any future rollbacks would not result in modifications to the wording to account for that. Instead, the City would consider increased taxable value. There was also a section on what is classified as “Qualified Expenses.”
After the Council unanimously approved the resolution, Mayor Pro Tem Steve Livengood said the fact they were able to come up with a final policy was “amazing,” considering how long the process took, and the amount of paperwork it involved that was reduced to just a few pages at the end of that process. Developer Don Sonntag commended the Council for establishing the policy, which he said might be used in the near future to develop a property subdivision for rental and for-sale homes that would come in two phases, and result in the construction of some 40 homes. The homes that would be offered for rent, would be priced at about $750 per month.
The project, if it comes to fruition, would cost anywhere from $1.4-to $2-million, and would be built in the vicitinity of East 22nd Street, near the Sundance Apartments. In order for the project to be viable, Sonntag said he would likely need a TIF of up to $250,000. He said there are a lot of hoops to go through before he approaches the City with a TIF request, however.