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 state has to meet a spending threshold of $20 million in the downtown area. If that figure isn’t met, no money comes back from the state, and the TIF plan isn’t feasible.
Girdler told the Commonwealth Journal that in the previous week, city officials had met to discuss the future of the TIF plan. He said that the study into what the city would do as far as developing downtown “has totally changed” over the last three months from what it had been at the outset.
“That study (Commonwealth Economics) talked about has partially been done. The only purpose of the study was to find a development area, and we did have that submitted to us, and we reviewed that, and we’ve changed all of that,” said Girdler. “Myself and city staff working with (DSDC executive director) Gib Gosser came up with the modifications.”
The scope of the city’s plans was changed by this mystery project that would help the city reach the $20 million spending threshold. Without it, said Girdler, the city found that what they were already spending, including on the $8.5 million energy center on the corner of East Mt. Vernon and College Streets, wouldn’t be enough to meet the necessary number. Something more was needed.
That something has come along, confirmed Girdler, and while it’s far from a done deal yet, the mayor is optimistic.
“We do have one major piece of the project we’ve added over the last week,” he said. “It’s very significant for development for Somerset.”