Commercial Street TIF district could see payout as redevelopment project seeks tax breaks
About 8.5 acres of properties on and near Historic Commercial Street between Jefferson and Washington Avenues are in line to receive property tax abatements for commercial and residential redevelopment. What this means for tax revenue for the historic district was a topic of discussion at Wednesday's update meeting on the Commercial Street Tax Increment Financing district.
A TIF district provides for incremental increases property tax revenue to be collected and redirected toward redevelopment projects within the district's boundaries. Most of the properties in question fall within this boundary for Commercial Street, except for 2.5 acres. In order for the developer of these properties, Titus Williams of Prosperiti Partners, to receive a tax abatement, the TIF would have to be amended to exclude the properties from its own boundaries.
At the meeting, the city's Director of Financial Vitality Amanda Ohlensehlen said before that would be done, the developer would have to pay out the remaining years of the payments in lieu of taxes that the properties would have generated without the developments. For the remaining seven years of the TIF, a lump sum estimated at more than $200,000 would be due.
"There's a preservation of TIF revenues," Matt Schaefer, a senior planner with the city, said. "This is one way we can do that and still facilitate this redevelopment project."
What's planned for the properties?
The proposed redevelopment is set to be completed in four phases.
Pacific South: The only portion outside of the TIF, this Midtown development has already received city approval for the development of 72 townhouse dwellings. With an approximate $15 million investment, the construction of townhomes would replace a single-family home and an unused building.
540 E. Commercial St: Located on the corner of Commercial Street and Washington Avenue, this property has been cited as a reason for the city to consider a 'demolition by neglect' ordinance. While the building was set to be demolished earlier this year, the action was postponed by the developer. The plans for this corner include the construction of a three-story apartment building with a storefront at ground level, according to previous News-Leader reports. This would include a total of 45 apartments.
Pacific North: Properties north of Pacific Street between Jefferson and Benton Avenues are the proposed location of a multi-family residential development with off-street parking.
Missouri Hotel: The historic Missouri Hotel property that had provided shelter to homeless people through The Kitchen Inc. nonprofit for the final 30 years of its operations could become a hotel once again. The redevelopment proposes a rehabilitation of the building into a boutique hotel with commercial and residential mixed-use development, according to Wednesday's presentation.
How does this help Commercial Street?
Ohlensehlen said the TIF amendment would provide an immediate infusion of TIF funds that could then be used for new projects. Additionally, the developer wants to revitalize currently vacant buildings in the area as well as expand the residential base that will in turn benefit the vibrancy and vitality of the district as a whole.
While a couple of attendees asked questions about the proposals, including about the potential demolition of historic structures, there was no strong opposition to what was suggested.
More: Springfield looks at ways to preserve historic buildings, prevent 'demolition by neglect'
To apply for the property tax abatement through the City Code's Chapter 353 Urban Redevelopment, each of the proposals would have to go through a redevelopment plan process and include a blight study. The plan and blight study would then be reviewed by the Land Clearance for Redevelopment Authority to make a recommendation to the Planning & Zoning Commission before going for final approval at Springfield City Council. Besides the blight study affirming blight in the area, the developer would also have to present a financial need that without the abatement the development would not be feasible. Schaefer said this process could take up to four months.
Marta Mieze covers local government at the News-Leader. Contact her with tips at mmieze@news-leader.com.
This article originally appeared on Springfield News-Leader: Commercial Street redevelopment projects aim for tax abatement
