Granite Ridge Tax Increment Financing District

May 13, 2014City Council Meeting, Rochester New Hampshire

Presented by Karen Pollard, CEcD, EDP Economic Development Manager

Tax Increment Financing Legislation RSA 162-K

Local Option: Municipalities adopt provisions of RSA by the governing body

Create and adopt Development & Financing Plans to achieve community development goalsDefine the district, public facilities and infrastructure will be constructed, estimated budget and proposed operations within the districtThe plan can be amended as needed by the governing body, with required Public Notice & Hearings Multiple TIF Districts are allowed

Not to exceed 8% of assessed community value, or 16% for all districts with bonds outstanding Not to exceed 5% of total acreage, or 10% for all districts with bonds outstanding

Creating a TIF District

Increment accrues after date district is establishedUse of grant funds is allowed within TIF DistrictsBonds – First payment must be within 5 years and last payment no longer than 30 years. Bonds are NOT to be included when computing the municipality’s net debt under RSA 33Annual report will include financial reports for any development districtsAppointment of a TIF Advisory Board by the governing body is required.

RSA 162-K:14 “Members shall be owners or occupants of real property within or adjacent to the development district”

TIF: Hypothetical Example

Pre-construction or “original value” $100,000Post-construction or development $10,000,000

Value as assessed for Ad Velorum Taxes by City Assessor

Increment or “captured value” $9,900,000Property Tax calculation is “post construction” value at the city’s tax rate per thousand, currently $26.36 per Thousand = $263,600

Taxes received on the original value go to the general fund = $2,636 Taxes received on the increment are dedicated to costs as detailed in the Development & Financing Plan = $260,964

Property Taxes on $10,000,000= $263,600

($26.36/$1,000)

$2,636 to General Fund($100,000 @ $26.36/$1,000)

Pre-construction value $100,000

$260,964 Increment($9,900,000 @ $26.36/$1,000)

Increment $9,900,000

Post-construction value $10,000,000

Bond PaymentReimburse

ExpendituresMaintenance Administration

Reserves

TIF: New Hampshire Best Practices

Create your TIF District with a development project “in hand”Have written development agreements about scope of public improvementsHave a financial surety or developer guarantee as part of the development agreementCreate a reserve account for at least 1 year of debt service & operating costs“Background” market growth does get used towards increment, but don’t count on increases every yearWork in phases & expand the scope as development occurs

Granite Ridge Development District

Granite Ridge Timeline1988 Report by Applied Economic Research2000 Land Use & Transportation Master Plan2006 Economic Development Master Plan2006 Bruce Mayberry TIF Analysis - Feasibility2007 Buxton Retail Analysis – Regional Demand2008 CLD Engineering & Traffic Study – Land & Infrastructure Capacity2010 City Council endorsement of the Development District, new zoning adopted 2010 MOU with NH DOT regarding Granite Ridge District, DOT endorsement of CLD Study2013 DRED approves city’s application for New Hampshire Revitalization Zone status2014 Proposed creation of TIF District in conjunction with development to be initial “phase 1” catalyst project

Development Potential

Rochester is in need of amenities such as shopping, hospitality and service businesses to serve the residents & business in the city and in surrounding towns. Leakage of $308 millionCapacity & demand for 2 million sq ft mixed usesIncrease property taxes 581%Employment creation

Development Potential  

   

Gross Land Area (Acres) 913.09

   

Building Floor Area (square feet)  

Existing 594,316

Growth Potential 1,615,904

Buildout Total 2,210,220

   

Taxable Assessed Value  

Existing 2013 $ 62,326,773.00

Growth Potential $ 362,419,005.00

Buildout Total $ 424,745,778.00

   

Annual Property Tax Yield  

Existing 2013 $ 1,642,993.74

Growth Potential (Increment) $ 9,553,364.97

Buildout Total $ 11,196,298.71

Granite Ridge TIF District Map

Table 3: Granite Ridge TIF District Comparison Factor for Statutory Limitations

Comparison Factor for Statutory TIF Limitations Taxable Valuation Land Area in Acres

RSA 162-K:5    City Total 2013 $ 2,048,617,212.00 28,688.05

     Maximum Allowable - Individual TIF District    

(8% of City-wide Assessment; 5% of City-wide Acreage) $ 163,889,377.00 1,434.40     

Granite Ridge Development District Valuation for Tax Purposes $ 62,326,773.00 913.09

As Percent of City Total 3.04% 3.18%

     Maximum Cumulative TIFs Allowable $ 327,778,754.00 2,868.81

(16% of City-wide Assessment; 10% of City-wide Acreage)         Granite Ridge Development District TIF $ 62,326,773.00 913.09Granite State Business Park RSA 162k:5 TIF $ 13,413,792.00 335.26Granite State Business Park RSA 205 TIF $ 24,169,200.00 56.45     Total Cumulative District Values 2013 $ 99,909,765.00 1304.80

As Percent of City Total 4.87% 4.55%

     

Why Now? “Catalyst” Project

Public Improvements

CLD Est. Public Improvements In 2008 $

Frontage Road & Interior Intersections $4,330,000

Access A & Farmington Road 1,010,000

Access B/ Nashoba Dr & Farmington Rd 1,530,000

Access C/ Crane Dr & Farmington Rd 1,900,000

Access D/ Little Falls Bridge & Farmington 1,770,000

Two Rod Rd & Farmington Rd 2,015,000

Access E & Farmington Rd 695,000

Access F & Farmington Rd 1,115,000

Water – Entire Project 2,900,000

Sewer – Entire Project 5,400,000

TOTAL $22,665,000

Public Improvements - 2014-2015 Anticipated  

4. Severino Estimate - Access Roads to Boulevard & Intersection Little Falls Bridge Road

$ 814,675.00

5. Severino Estimate - Frontage Road (Granite Ridge Boulevard) and Wetland Basin

$ 1,500,440.25

6. Sewer & Water Improvements $ 1,000,000.00

Subtotal $ 3,315,115.25

Engineering 20% $ 663,023.05

Contingency 20% $ 795,627.66

Permitting & Mitigation $ 225,984.04

TOTAL $ 4,999,750.00

TIF District Creation Timeline

May 13 – Public PresentationMay 20 – Public Hearing & City Council Resolution and Reading for a 1st timeMay 27 – Modifications to the TIF Development & Financing Plan (if necessary) June 10 – Consideration for approval to create the TIF District (after mandatory 15 day period) Development Agreements will be considered individually by the City Council on a project-by-project basis

Questions?