Proposed changes to district boundaries and potential other uses of city revenue to be discussed with county leaders
It took slightly more than 43 minutes — and exhortations by two Sarasota city commissioners about changes they feel should be considered in the process. Nevertheless, the board members ended up voting 4-1 to send a letter to the County Commission, seeking its participation in a new tax increment financing (TIF) district to help pay for The Bay master plan proposed for the city-owned 53 acres on the waterfront.
Commissioner Hagen Brody cast the “No” vote, but he offered no comments about his decision.
City Commissioner Willie Shaw made the motion, which included direction to city staff that points he and Vice Mayor Jen Ahearn-Koch raised on May 20 be shared with county leaders.
The motion followed caution from City Manager Tom Barwin, Assistant City Manager John Lege and Bill Waddill, managing director of the Bay Park Conservancy, that county leaders were not likely to be receptive to Shaw’s and Ahearn-Koch’s suggestions. (The Bay Park Conservancy (BPC) is in charge of the planning for The Bay and will manage the park, under terms of an April 15 agreement between the nonprofit and the city.)
However, Commissioner Shelli Freeland Eddie indicated that, as she saw the situation, the City Commission should be able to use TIF funds from the district in whatever manor a majority of the city board approves.
Shaw was adamant that the new district be enlarged to encompass the Newtown Community Redevelopment Area (CRA), which was established with a base year of 2008, just before the Great Recession began.
Vice Mayor Ahearn-Koch voiced her desire for funds generated by the TIF district to be used not just for The Bay, but also for projects that would connect other city parks to The Bay, which has been planned as a public park with a multitude of amenities. Her goal, she said, is to enable people to “get to this [new] park safely.” Perhaps 20% or 30% of the TIF revenue could be set aside for that purpose, she suggested.
Ahearn-Koch also talked of the potential for some of the TIF revenue to be devoted to constructing new parks in the Rosemary District, as residents have requested.
In regard to the Newtown CRA: In September 2017, the commissioners voted to reset the base year to 2017, after gaining the necessary approval of the County Commission to take that action. The City Commission vote came with the hope that subsequent increases in property values in that TIF district finally would produce revenue.
“This is our opportunity to create more than just the 53 acres into a park, but to create community for all,” Shaw emphasized on May 20, referring to The Bay and the Newtown CRA.
During public comments, Newtown activist Valerie Buchand argued in favor of Shaw’s request. “Here we are again being left out,” she said of Newtown residents in regard to the TIF district proposed for The Bay. “Show that you love this community for once, [as] we don’t get pennies.”
Shaw pointed out that the city commissioners have asserted their desire that The Bay be open and accessible to all residents and that they also want residents — including those of North Sarasota — to be able to participate in the construction of the amenities and hold jobs in the new park.
Responding to Shaw and Ahearn-Koch, Mayor Liz Alpert said, “This particular TIF district is being created to fund The Bay project. I don’t think it’s being created to fund all sorts of other projects that we would love to get done in the city.”
Moreover, Alpert told her colleagues, if the city commissioners agreed that some of the new TIF funds could be spent on other initiatives, “We’ll have a hard time even getting bonding to do what we want to do for The Bay project.”
In a Feb. 20 memo to the City Commission, Assistant City Manger Lege explained that revenue from the proposed TIF district could be used to pay the debt service on bonds the board members could approve for funding amenities on The Bay property.
Lege told the board members on May 20 that the proposal calls for the base year for the TIF to have begun on Jan. 2018, with the first increment of revenue available as of Jan. 1 2019. If the district wins city and county approval, he continued, then the initial payments into the TIF trust fund would be expected in November or December, which will be early in the 2020 fiscal year.
Explaining how a TIF works
As Lege noted in that Feb. 20 memo, “TIF is widely used by local governments to promote economic development and redevelopment. The TIF process splits tax revenue generated from properties within the TIF district into two components, base revenues and incremental revenues. Base revenues are the revenues available before[emphasis in the memo] the TIF district is established. Incremental revenues are the revenues in excess of the base revenues generated by [increased] property values within the TIF district. The difference between the incremental revenues and the base revenues provides a revenue stream to fund the public improvements within the TIF district.”
He added, “Fundamentally, a [base] year is determined at the creation of the TIF district which determines the total beginning assessed value of all properties in the TIF district. As development occurs and existing property values increase due to the new development, assessed values in the district increase, causing an increment in the assessed values within the district. The increase in assessed value is multiplied by the current millage rate for both the City and County to determine the incremental increase in tax revenues.”
The revenue generated by the rising property tax values can be used only in the TIF district, he pointed out.
Conveying county concerns
On May 20, Waddill, the BPC managing director, explained that in his “very early discussions with county staff and the county commissioners, “There was a desire to keep the TIF district limited … smaller than the old Downtown [Sarasota Community Redevelopment Area] TIF.”
Initially, he said, the proposed new TIF district for The Bay was designed to encompass just the properties “that touch or can see The Bay Park …” Then, after hearing comments from city commissioners and members of the public, he indicated, county staff was agreeable to extending the district boundaries to include property from the Boulevard of the Arts to Orange Avenue and from 10th Street to Gillespie Park, “to allow us to do connectivity improvements along those two corridors.” The discussion had focused on wider sidewalks, better street lighting and bicycle lanes, reflecting “a deliberate desire for us to make connections into the neighborhood,” he said.
Finally, the county comments he has received, Waddill told the city commissioners, have made clear “the county’s desire is to spend the TIF dollars on capital improvements.”
When City Manager Barwin sought clarification that the construction of the new performing arts hall in The Bay master plan would be considered part of the capital improvements paid for by the TIF revenue, Waddill replied, “That’s right.”
However, in March, Waddill indicated to the County Commission that the Van Wezel Foundation would be raising money for that project.
The Van Wezel Performing Arts Hall will be kept as a feature in The Bay, representatives of the BCP have pointed out. However, a new, larger venue that is part of the master plan has been estimated to cost about $250 million.
Representatives of the BPC have estimated that The Bay could cost between $100 million and $150 million, excluding the new performing arts hall.
On May 20, Lege reiterated Waddill’s statement about the county view on limiting the TIF district. “We risk the county not being wanting to participate if we do other things [with the revenue].”
Nonetheless, Lege said, if the city commissioners wanted city staff to broach the ideas with county leaders, he and Waddill would do that. “The letter gets us to the table to start those discussions,” he added of the document the commission was being asked to approve that day.
If the City Commission authorized sending the letter to the county, Waddill said, he and Lege would “bring back more detailed terms” for the board members after further discussions on the county side.
“I suspect it’ll be a very vigorous conversation,” Barwin added.
He hoped the county leaders would understand city commissioners’ points, Barwin said. Referring to The Bay, he continued, “It represents a regional attraction, which is why it deserves a regional investment.”
“I think we can decide where our portion of our TIF dollars go,” Commissioner Freeland Eddie pointed out, and the County Commission can do the same for its share of the funds. “All I’m saying is … that I don’t want us to be hamstrung — to not be able to do these things in the future,” if the commissioners ultimately agree with suggestions made on May 20.