A planned tax increment financing district in Peabody is planned to last for 12 years instead of the 20 allowed by law, Peabody Main Street Director Shane Marler told Marion County Commission on Monday. The city could limit the duration in the same ordinance approving the project.
The city is considering a TIF district that covers the historic downtown district. TIF districts redirect increased property tax revenues to development within the district. Projects could include street work, water and sewer lines, light fixtures, and curbs and gutters, Marler said.
The city arrived at the 12-year figure because it wants a 10-year window to raise funds in the district, and development would probably take two years to be reflected on property values, Marler said after the meeting.
The district, which includes 42 buildings, has a total property valuation of about $1.9 million. The county, city, and school district would still receive all property taxes on that amount, but if property values increased, taxes on the increase would be set aside for improvements in the district.
Marler said he expects development within the district before the end of 2011. If development increases property values in the district by a total of $200,000, the county would miss out on about $3,300 of property taxes, Peabody Mayor Larry Larsen said.
Property values in the district have declined in recent years, Marler said, and the city is trying to halt that decline. When Baker Furniture announced it was moving out of town, the city could have seen it as the death knell of downtown, he said. Instead, they saw it as an opportunity to diversify downtown.
The TIF district is just one additional tool to revitalize the area, Marler said.
Commission Chairman Randy Dallke said 12 years would be much easier to tolerate than 20. He thanked the city officials for actively engaging the county and school district in the consideration. The commission and USD 398 Board of Education have authority to veto the district until mid-January.