Ren Zone vote comes to county
The fate of three Renaissance Zone extensions in the city of
The requests for extra zone time come from True North Architecture, Construction and Investments, Via Design and Wealthy Streets Historical Developments LLC. All three have renovation projects that have been proposed for three separate parcels already in the nearly tax-free zone since 1997. The zone designation expires at the end of 2011.
But without a 12-year extension of that tax status, all three have said it would be difficult for them to follow through on their plans.
Public Act 116, which became law in April, gives counties the right to nix an extension. Lawmakers gave that power to counties because county governments lose property-tax and millage revenue during a zone’s duration, losses that for
The county’s Finance Committee will have the first chance to speak to the issue Tuesday, with the board of commissioners likely to make what will be the final decision on Thursday.
Odds are the county will go along with the requests.
The city’s Economic Development Department has agreed to reimburse the county all the tax revenue it loses from the three projects for as long as the amount of tax dollars the city captures and exempts exceeds 10 percent of its total tax roll.
The county’s economic development participation policy requires the county commission not to allow any capture of its tax revenue when a jurisdiction tops that percentage, and the city is well above it at 12.3 percent this year.
So having the city reimburse the county lets commissioners approve the extensions.
But the city has said it will drop below the county’s 10 percent threshold in 2011 and may only have to reimburse the county for two of the extensions’ 12 years. If the city meets its time projection, then the county will lose 10 years worth of tax revenue to the projects.
“The capture will continue without us being reimbursed,” said
“Whenever it dips below (the threshold), then the reimbursement is eliminated. When it goes back above, it is reinstated,” he added.
The city estimated that the county would lose $91,000 in tax revenue to the three projects over the life of the extensions without any reimbursement.
The county isn’t alone with a tax-loss limit, as the city has one, too. The city is willing to lose up to $500,000 in tax revenue each year to the zone, a policy that has been in place since 1997. And the annual amount of tax dollars the city will reimburse the county will be added to that year’s tax ceiling. The city collects new income-tax revenue from the jobs created on a zoned parcel, while the county doesn’t.
City commissioners also have to approve the extensions and are likely to do so Nov. 25, but only if county commissioners OK the requests this week. The state also has to ratify the applications. The extensions will have to wait another year, though, if the county rejects the requests this week.