A city economic development official said Thursday that several underdeveloped properties within the municipal boundaries hold untapped potential in terms of incentive value.
Brian Barger, economic development director for the City of Miami, told Miami Development Authority members that about 17 percent of the city has been identified as possible Tax Increment Financing districts and could be used to entice new business to Miami.
Barger's comments followed the recent announcement that a developer intends to bring “major retail business” to Miami - contingent upon availability of tax increment financing.
Joe Thompson, a local realtor, is trying to close a deal on 20 acres of agricultural land, as well as secure his client's option to buy 10 additional acres adjacent to the land on North Main Street. He told Miami City Council members last week that he could not disclose his client's identity, but said the development would anchor a string of interest in Miami.
“This is something we have needed for years,” Thompson said.
The council approved a resolution of intent to consider approval of the district. Councilman John Dalgarn was absent from the meeting and councilman Rudy Schultz abstained, citing a possible conflict of interest.
Nathan Ellis, a finance attorney representing The Public Finance Law Group out of Oklahoma City, defined incremental financing as a tool to spur economic development and create interest in areas that are blighted or lack infrastructure.
According to Ellis, TIFs also allow municipalities to use the growth in tax revenues - derived from property or sales tax or a mix of both - to pay for the costs of new development.
When created, the revenues would be deposited into a dedicated account and then used to pay for permissible project costs.
In Oklahoma, a TIF agreement can remain in place for up to 25 years during which time the tax base is frozen at the predevelopment level.
Property taxes would continue to be paid, according to Ellis, but taxes derived from increases in assessed values would be used to retire bonds issued to originate the development, or leverage future growth in the district.
Taxing entities - to include the Commerce School District, Ottawa County and the City of Miami - would not lose current tax revenue, Ellis said.
Proponents of TIF districts say the concept is what Miami needs to entice retail business as well as manufacturing and housing interest - creating a domino effect that will quickly grow he city and its tax revenue base.
Opponents are concerned with the potential of unfair advantages that would be given to new developers who could directly compete with existing business owners.
School districts are concerned with long-term freezes of tax growth and how the delayed tax revenue will impact the district in terms of state aid allocations.
The city will now establish a committee composed of one representative each from the council, the city planning commission, all of the county's taxing entities and three at-large members.
The committee will look at the merits of creating a TIF district and make a recommendation to the city council.
Two public hearings would be conducted before the city council would cast a final vote on the formation of the tax increment finance district.
Another TIF on the horizon
Barger said Thursday that Saddle Creek Developers, a group that previously sought to bring a housing development to Miami, is again expressing interest - it, too, is seeking a TIF incentive.
Saddle Creek Developers is expected to come back before the city's planning commission next week as well as the city council.
In September of last year, Saddle Creek Developers sought annexation of 44 acres south of Miami where they proposed the construction of 168 homes. It withdrew its request in November after facing public criticism of its plan to place houses in flood-prone areas. Additionally, the group faced a stringent series of mandates issued by the city engineer.
Saddle Creek Developers has since hired new designers and refined its plan