Commonwealth Journal

News Live

August 22, 2013

Downtown Somerset ‘springing to life’

City Council praises ongoing revitalization

(Continued)

Somerset —

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.

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