Montpelier, VT – September 30, 2010 – (RealEstateRama) — The state has given the Town of Colchester a green light for a Tax Increment Financing District within the Severance Corners Growth Center, a move that will assist the town’s development efforts there.
The district, approved recently the Vermont Economic Progress Council, will allow the town to keep some of the incremental property taxes generated by new development within the Growth Center to fund public infrastructure needed for that development to occur.
“This authorization will help the town of Colchester undertake and pay for the necessary infrastructure improvements that will foster responsible economic and community development,” said Karen Marshall, Chairwoman of VEPC.
The panel approved the Tax Increment Financing (TIF) District Plan after many hours of deliberation that included a meeting in Colchester; public comment; and a tour of the town and the proposed TIF District.
“A TIF District epitomizes sustainable community development,” Marshall said. “It funds and builds infrastructure improvements that will foster economic prosperity through commerce and creation of new jobs, and encourages thoughtful, well planned community land use and transportation options, and better housing and health outcomes for the people who live and work there.”
The TIF District was created by the Colchester Select Board on July 27, 2010 following a series of public hearings.
“This designation will help us to grow jobs and concentrate development in the place where it makes the most sense, and where residents have determined it should occur,” said Richard Paquette, Select Board Chairman.
The authorization allows the Town of Colchester to use a portion of the incremental property tax revenues generated by new development within the Severance Corners Growth Center to finance certain public infrastructure projects like improvements to the Severance Corners intersection, public sidewalks, walkways, and bike paths, and an increase in water storage capacity, all improvements that will allow the development projects planned for the Growth Center to move forward.
That development, in turn, will generate incremental property tax revenues that otherwise would not have been raised to pay for the infrastructure debt.
Before any TIF District debt can be incurred, the town must submit a TIF District Financing Plan for VEPC approval which will detail the debt amounts and types of debt instruments that the town will utilize.
Then the voters of Colchester must approve debt levels and any bonds to be issued by the town for TIF District infrastructure projects.
“There is still much work to be done and reaping the benefits of this approval will not happen overnight,” Town Manager Albin Voegele said. “We are appreciative of the thoughtful and thorough process the Vermont Economic Progress Council staff and board members engaged in which led to the approval of our TIF District application.”
The TIF District was the second considered under reforms passed by the General Assembly in 2006 and 2007, Milton being the first. To approve the application, the VEPC board determined that:
• The TIF District is within an approved Growth Center and meets the purpose for a TIF District as stated in Vermont law.
• The Town of Colchester met several process criteria including public hearings and the development of a TIF District Plan.
• The Town of Colchester approved and pledged the same proportion of incremental municipal property tax revenue as requested of the state.
• The proposed infrastructure and real property development are compatible with approved municipal and regional development plans and the project has clear local and regional significance for employment, housing, and transportation improvements.
• The public infrastructure projects have nexus with the proposed real property development and the incremental property tax revenues will only be utilized to pay for the portion of the public infrastructure that serves the Growth Center/TIF District..
• The infrastructure costs require substantial public investment over and above the normal municipal or bonded debt expenditures on the town.
• The infrastructure and real property development will accomplish several public good outcomes including the development of new affordable housing and improved and enhanced transportation systems.
With a TIF District the value of the properties within the district are frozen at the time of approval by the municipality. All property taxes generated by that original base value continue to go to the municipality and the education fund.
For 20 years, the incremental property taxes generated by any new development are shared, with up to 75 percent going to finance the TIF District infrastructure debt and up to 25 percent going to the municipality and state education fund. The exact percentage will be determined when Colchester submits a TIF Financing Plan for approval.
The Vermont Economic Progress Council is an independent board consisting of nine Vermont citizens appointed by the governor and two members appointed by the General Assembly that considers applications to the state’s economic incentive programs.
VEPC is attached to the Vermont Agency of Commerce and Community Development, whose mission is to help Vermonters improve their quality of life and build strong communities.
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