More than nine months after assuming control of the city’s three community redevelopment agencies, city council members are trying to get a handle on when or if tax breaks should be provided for new businesses and development opportunities.
Two requests came before the city council this week, which renewed the debate on the value of incentives while increasing tax increment funding for the CRAs.
TIF dollars are paid by businesses within the CRAs and the funds are required to be invested back into those districts. The concept is to continue to invest into the districts and help attract new businesses. Incentives are important to that process, however, allowing tax abatements stops the new funding flow for the period of the request.
The two latest requests include one from Galatians 6:2, a business incubator and conference center on 13th Street West, which wants a five-year TIF abatement to recoup some of its $500,000 investment in remodeling costs. The other is from Grand Palms developer Tim Morgan, who qualified for $9 million in tax credits to build a senior housing facility on 14th Street West.
We had a vacant building that is getting remodeled, which is a very good look on 13th that looked like a dead ghost town.
Vice Mayor Gene Gallo
Morgan is asking for a 50-percnt TIF abatement for five years. For the Galatians request, city administrator Carl Callahan said it would be about $4,000 a year the Bradenton downtown CRA would lose. The tax breaks for the Grand Palms project would depend on the final value of the estimated $12 million project.
Ward 5 Councilman Harold Byrd Jr. said TIF dollars are supposed to be infused back into the CRAs and, “I don’t want to be in a situation where it’s not.”
Ward 4 Councilman Bemis Smith said the city should be getting a return on any approved incentives, which should include stipulations of job creation, but others believe the investment value goes well beyond the initial loss of cash.
“First of all, we had a vacant building that is getting remodeled, which is a very good look on 13th that looked like a dead ghost town,” said Vice Mayor Gene Gallo. “Employees will eat downtown and if they are successful, it will show others that they can come to 13th and be successful.”
My concern is and always has been that when we do it for someone, someone else will come in right behind them and ask for the same thing.
Ward 3 Councilman Patrick Roff
Ward 3 Councilman Patrick Roff said he is cautious about overdoing incentives, “because that’s the mechanism that makes a CRA work. My concern is and always has been that when we do it for someone, someone else will come in right behind them and ask for the same thing.”
In referencing the Grand Palms project, something city officials view as an important redevelopment project to a struggling 14th Street CRA, Byrd summed up the city’s dilemma in formulating an incentive policy. “In my opinion, not everyone should get TIF dollars back, but we have to look at different projects differently.”
The council is expected to take these two requests up for a vote on Sept. 14.