Commonwealth Journal

News Live

August 11, 2013

Mayor excited about ‘master plan’

TIF plan would allow for large-scale redevelopment of downtown

Somerset —

The pieces are coming together for what Somerset Mayor Eddie Girdler calls a “monumental master plan” for his city — but officials have to wait and see if all the parts will be in place first.
Initial research has been conducted — and overhauled — on the possibility of 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.
And it all hinges currently on the planned downtown energy center, as well as a crucial proposal that’s still being kept under wraps at this time.
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 in helping Somerset. 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 government has certain conditions that must be met before they’d sign off on the plan for a community like Somerset. If it doesn’t look like the project would generate enough new tax dollars to be profitable to the Commonwealth, they’d likely turn it down.

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