Dear Canton Residents,
This year, the Town has been looking at ways to incentivize redevelopment of the historic Collins Company property (the “Axe Factory”) in Collinsville. At the Annual Town Meeting in January, we heard a presentation on Tax Increment Financing, which is linked here:
Since then, the Town used grant funds to hire a consultant to prepare a preliminary TIF master plan. This preliminary plan can be presented to potential developers, to describe what incentives the Town may be willing to provide them. This preliminary plan will be presented to the public by the consultant on Thursday evening, September 29th, at 7:00 pm in the Community Center, Room F. Below are some FAQs regarding Tax Increment Financing (“TIF”).
What is a TIF?
A Tax Increment Financing plan enables a town to use a portion of the increased tax revenue from a specific property being developed to fund needs of the community arising from the development, and/or to assist the developer, for a set period of time. As the property is developed, its value will rise and so will its tax assessment. The TIF specifies certain uses of some of the increased tax revenue on the newly-developed property, which is the “Increment”.
Will my tax dollars go to a Developer to help them pay for their project?
No. With a Tax Increment Financing plan, developers do not receive current tax dollars. The funds used are solely from the new, increased tax revenue on the developed property. These are tax dollars that, without the development, we would not receive.
Will I get to vote on the TIF Plan?
Yes. The final TIF Master Plan, which is created once a developer with a specific plan comes forward, must be voted on by Town Meeting. A public hearing will also be held.
Will creating a TIF raise my taxes?
No. The tax revenue committed to the TIF is a portion of the increased revenue from the developed property. Indeed, the purpose of a TIF is to increase the Grand List by incentivizing development and increasing the value of the property being developed.
What if the Developer fails or doesn’t make a profit?
The increased taxes used in the TIF are not tied to profits by the developer; they are generated by the increased assessment of the property. If the developer fails and there is no development, then there is no increase in the value of the property, and no Increment.
Does the TIF only pay for the Developer’s costs?
Not necessarily. A portion of the Increment, which is voted on by Town Meeting, can be set aside to pay for a wide variety of things, which may include some of the developer’s costs. The balance of the additional tax revenue goes to the General Fund.
What does the TIF pay for?
Different developers may be looking for different levels of assistance, or wish to see the Increment used to fund town infrastructure or related needs. The Town determines what percentage of the total increased tax revenue will be set aside for the TIF, and we can set the bar wherever we feel comfortable after hearing a developer’s needs. We also would analyze the costs to the Town associated with the development (for example, public safety needs, school enrollment, etc.) and ensure that the increased tax revenue to the Town’s General Fund would at the very least cover those costs.
Does the Town get to see the Developer’s plan?
Yes. We have full ability to vet any developer’s proposal and see if it is something the community wants and if it seems viable. Any developer will need to have significant funding from outside sources; they will not be relying solely on a TIF to bring their plan to fruition. However, the TIF can be an incentive that shows a developer (and its investors or lenders) that the community supports and values their proposal.
There is no argument that, as it sits now, the Collins Company property is not generating anywhere near the tax revenue it would if it is developed. As we try to grow our Grand List in order to meet our Town’s financial needs, a TIF is an important tool to consider. I hope you will join us on September 29th to hear the preliminary plan. This will not be a Town Meeting to vote on a Master Plan, and no specific developer plan will be discussed.
If you have specific questions, please direct them to our Town Planner, Neil Pade, at email@example.com. I hope to see you on September 29th.
Leslee B. Hill