A revitalized downtown Somerset is drawing praise from city officials — and they’re on the edge of their seats awaiting the possibility of a large-scale plan that’s been hinted at for several weeks now.
Somerset City Councilor Jimmy Eastham during the Aug. 12 council meeting said downtown Somerset seems to be “springing to life,” thanks to new construction, a number of community activities, and the completion of the new Fountain Square.
“I think things are looking good for the downtown area and I’m proud of that, myself,” said Eastham.
Several businesses, including a yoga studio and the Downtown Diva store, which had been located on Ogden Street, have moved to the East Mt. Vernon strip. At least one other business is expected to locate there as well.
The completion of the new, upgraded Fountain Square — which has garnered many compliments since the new fountain was activated last week as workers put the finishing touches on the project — and a flourishing community activity calendar are also noteworthy, according to city officials.
“That fountain is looking real good,” said Councilor Mike New.
The Judicial Center Plaza has been the setting of a number of events, including the new “Market on Main” event, which takes place each Thursday evening. Somernites Cruise, a summer tradition, has also brought a number of people to downtown Somerset.
“Usage of the downtown area right now is at an all-time high,” said Councilor Jim Rutherford.
The downtown renaissance of sorts comes at a time when city officials are working to close in on a multi-million dollar project that would help the city meet a $20 million threshold required for a Tax Increment Financing (TIF) plan that would allow for a large-scale infrastructure redevelopment of downtown Somerset through redirection of tax funds, primarily sales taxes.
Somerset Mayor Eddie Girdler said during the meeting that all pieces must fall into place for the TIF plan to become a reality.
“(The TIF plan) is an extremely complicated procedure,” said Girdler. “The TIF part of that will not be a reality unless the other project gives us the go-ahead to do it.”
In February, members of the advisory firm Commonwealth Economics met with officials from the Downtown Somerset Development Corporation (DSDC) to discuss the feasibility of a TIF plan. The initial idea arose from DSDC’s efforts to look for ways to fund a renovation of the Virginia Cinema, but it became apparent that TIF money could be used to engineer an overall downtown revitalization.
Several steps were necessary, including an initial study by Commonwealth Economics to determine the feasibility of a TIF district, the possible boundaries and how much money could be expected under certain conditions. Once that was concluded and city officials got on board, the state government would then need to make their own determination on whether the investment would be worth it.
Most of the income in a successful TIF project comes from redirecting sales tax funds that would have otherwise gone to Frankfort. The tax revenue is able to pay for the improvements, even retroactively, but the state has certain conditions that must be met before officials sign off on the plan for a community like Somerset.
Under a TIF plan, local and state governments would rebate as much as 80 percent of any new tax revenue that results from a development back to its own certain area. This tax money would pay for infrastructure work needed to create the development.
First, the city has to meet a spending threshold of $20 million. If that figure isn’t met, no money comes back from the state, and the TIF plan isn’t feasible.
City officials have met in recent weeks to discuss the TIF plan, and what it will take for the city to reach the $20 million spending threshold. The city already has a jump on that with its energy center project, to be located on the corner of East Mt. Vernon and College Streets. The cost of that project is expected to be at around $8.5 million.
But that leaves up to another $11.5 million in spending to reach the threshold.
Girdler recently confirmed that another project was in its earliest planning stages, but he’s declined to release details of that publicly until the project can be agreed upon by all parties.
“If the other piece of the puzzle does not come into play, there’s no way we will even approach a TIF project,” said Girdler during the meeting. “It’s just not feasible without this other part.”
Girdler told city councilors they should expect a workshop meeting to be held on the possible project.
“ ... It’s going to be an exciting project,” said Girdler.
Girdler has stressed that none of this will come at any extra cost to the taxpayer, as meeting the $20 million spending figure will all the city to issue revenue bonds.
“You’ve just got to have everything set in stone before you reach out to a TIF project. ... Either you have it or you don’t,” said Girdler. “If you don’t have it, you better walk away from it.”