Golden Alternative: Grafton Can Create a TIF District

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Golden Opportunity: Grafton Can Create a TIF District

  • The main drag through central Grafton is a proposed new TIF (Tax Increment Financing) district. Grafton closed its former TIF district in 2018.

    The main drag through central Grafton is a proposed new TIF (Tax Increment Financing) district. Grafton closed its former TIF district in 2018.

The main drag through central Grafton is a proposed new TIF (Tax Increment Financing) district. Grafton closed its former TIF district in 2018.

The main drag through central Grafton is a proposed new TIF (Tax Increment Financing) district. Grafton closed its former TIF district in 2018.

Golden Opportunity: Grafton Can Create a TIF District

GRAFTON – The Mississippi city of Grafton is testing the waters for the possibility of bringing back a property tax-based economic development tool that it hopes will attract new investment in underutilized parts of the city.

Discussions about the establishment of one or more new Tax Increment Financing (TIF) counties in the river town have been held during recent meetings of the Grafton City Council and Jersey County Board of Directors. If everything goes according to plan, the next steps will be to form a joint audit committee made up of representatives from the local tax authorities, public hearings, and a city council vote, possibly by late spring or early summer.

“We’re still in its infancy, just a preliminary discussion,” said Rick Eberlin, Mayor of Grafton. “We have several business developments that we want to lay the foundation for.

“These business people want as much support as possible,” said Eberlin. “And if the soil they are going to develop qualifies for the TIF incentive, why not?”

Three potential new Grafton TIF districts are currently being investigated, Eberlin said. One would include unused land owned by the Allen family, the owners of the loading dock, who are considering a new resort-type development. The other two boroughs considered would include all of the lots along and one block on each side of Main Street from the loading dock to the west end of the city and part of Market Street just off Illinois Route 3.

Grafton would need to demonstrate that real estate in the proposed TIF counties is what state TIF law describes as “tainted” and “but for” the public investment provided by the TIF, there will be no effective redevelopment or development . The proposed new TIF districts include the sites of an old limestone quarry and the previous sites of a boat building, button factory, and fish processing plant.

Eberlin said the city needs to look after itself financially by attracting new developments, as experience has shown that other sources of income can be unreliable.

“The Council members and I want to make sure that in the future Grafton can stand alone and not have to rely on FEMA, IEMA or any other institution,” said Eberlin. “If another flood happens, we’re at the mercy of these agencies, and I don’t like being in that position.”

Betsy Allen, co-owner of the Loading Dock, said a new TIF district could help her family business if they think about a new resort development that could include lodging, dining, banqueting, leisure and retail opportunities.

“It’s still a little dream we’ve been thinking about for 20 years, but the TIF would support potential development, including our project, for Grafton’s future,” said Allen. “TIF wouldn’t necessarily be a make-it or break-it for us, but it would certainly encourage and help us.”

TIFs in one form or another are available in 49 states. According to the Illinois Tax Increment Financing Association, many citizens, including members of tax authorities affected by TIF districts, do not fully understand how TIFs work.

When a TIF district is created, the value of the property in the region is set as the base amount, according to the association on its website. The property taxes paid on this basic amount continue to go to the various tax authorities such as the district or the local school authority. However, if the property’s appraised value increases due to development, the additional tax revenue generated above the base amount already established is known as a “tax increase”. These additional funds flow into a special fund with which the municipalities make additional investments in the TIF project area.

Grafton formed its last TIF district in 1995 after the devastation by the Great Flood of 1993. This district expired in 2018 after 23 years, the maximum time allowed by state law. Eberlin said the proposed new TIF districts could be set up for a shorter period of time, depending on what emerges from the talks with the local tax authorities concerned.

The development of the Wind Rivers Condominium at the east end of the city took advantage of the TIF district from 1995, Eberlin said. Housing developments like Wind Rivers can bring new families to the area with children attending Jersey County schools. By the time the TIF expires, the school district must train these additional students without seeing the additional tax revenue generated by the development.

When the previous TIF expired, the Jersey Community Unit School District 100 received about half a million dollars more due to the higher taxes generated by the TIF developments, according to Superintendent Brad Tuttle. But the district has spent more than 20 years without those extra tax dollars while the TIF was in place. While the proposed new TIF districts are not residential districts, it would be a long time before the school district would benefit.

“If what they’re talking about happens over 15 years or more, this will really build the balanced valuation and really increase the tax base,” said Tuttle. “But then it could be years later that the school system would really reap that.”

Tuttle said it is important for the school district to maximize all the property taxes it can receive, which can be up to 70 percent of the district budget. This is critical to the state’s third largest geographic school district, whose 53 school buses “go around the world every six days,” Tuttle said.

“I am not against it; I just want it to be fair. I don’t want it to be a financial burden on the district, and I don’t think they want it either, ”Tuttle said. “Every time we can bring new things to Jersey County, it’s a great thing. We are eagerly awaiting more information and negotiations to see how this will affect property tax that we could potentially lose. “

Although it is a local TIF decision, the Grafton proposals are being closely monitored at the state level.

“I’m keeping an eye on this proposal while local officials work out the details,” said Senator Steve McClure of R-Springfield, whose Grafton district is a part. “Community development and rehabilitation are important components of job growth and strengthening the local economy. I look forward to reviewing the plan once it’s completed. “

Eberlin knows that he and the city council have a lot to do to familiarize other tax authorities with the TIF proposal.

“I assure the school district, the county board and the presidents of Lewis and Clark that these areas are currently not producing much taxes at all,” said Eberlin. “You look down the street at what is being proposed and the amount of tax revenue that is about to be generated. Ultimately everyone will be a winner. I think we have a golden chance. “