City looks to TIFs to increase tax base
Eudora City Administrator Cheryl Beatty outlined the challenge.
Eudora needs more commercial business to maintain growth. The prime places where businesses might grow need infrastructural improvements the city can't afford.
Residential property taxpayers outnumber commercial taxpayers 9-to-1.
The disparity means few restaurants, one hardware store and no large general store, Beatty said.
"All that is difficult to do with only a residential tax base, because you're not bringing in a lot of dollars on a residential tax base," Beatty said.
Over the past six months, Beatty faced the challenge by looking into one of the few tools open to the city to spur development: a tax increment financing district.
"We really can't use government dollars to build the private buildings or buy private land," Beatty said. "The only way the government can get involved is to build the infrastructure needed to make an area valuable for business."
The district, once established, basically gives new businesses the opportunity to request infrastructural improvements ---- subject to approval by a citi
zen committee and the city council ---- that can be funded and built through the sale of bEonds.
Any property tax generated in the district in excess of its valuation in the first year goes toward retiring the bond.
The creation of the district also means the creation of a citizen committee who will hear business requests and recommend action to the city council. The committee would perform much the same role as the planning commission.
Because it uses tax dollars, both Eudora USD 491 and the county would have to approve the project.
"You want to have the citizens involved so that everyone keeps aboard and abreast with what's going on," Beatty said.
To Beatty, the TIF district is one way to promote growth, and working with city staff she knows exactly where to begin.
The first phase of a probable TIF district lies directly east of the city's current limits, in an area that would run from Seventh Street to Kansas Highway 10, Beatty said.
Part of it includes land platted for the Deer Valley subdivision north of Intech Business Park. The city zoned one-third of the development for commercial use.
The district would help provide roads and sewers for the commercial entities within the district, Beatty said.
Although the city council once considered using the TIF money for possible residential infrastructure, it's now leaning toward limiting the tool to commercial entities, Beatty said.
The area would become even more valuable when a planned Interstate 70 interchange from Tonganoxie comes into fruition, Beatty said.
"Once you get the site started like that the hope is that it would snowball," Beatty said.
The initial district would be part of the city's overall capital improvement plan.
Making it happen
Beatty hasn't been alone in the effort to develop a TIF district for Eudora.
From the beginning, Beatty has worked with city engineering consultant Scott Michie of Bucher Willis and Ratliff to carry out the studies necessary to make the district a reality.
"Our whole emphasis is to plan for change and plan how to finance public improvement," Michie said.
The first major step is to make a case to the city council that the area east of town is blighted.
To do so, the study must tackle nine different requirements as mandated by statute that prove the land is unable to be developed.
One component will argue the streets surrounding the area are underdeveloped, Michie said.
"The street layout was developed off an old highway that has been bypassed and has gravel roads for farm vehicles," Michie said. "It needs be transformed into an urban street layout."
A different component concerns unsafe or unsanitary conditions, Michie said.
The eastern property also fits that category, he said
"The roads are rural or abandoned highways, there's no storm sewer system," Michie said.
The sewer system must be extended for development to occur, Michie said.
Lack of industrial interest also contributes to the area's stagnancy, Michie said.
"The industrial park has been slow to fill up and the city is considering land use planning that would favor more commercial development rather industrial or residential," Michie said.
The possibility of the turnpike also adds into the plan, Michie said.
"This is in the context of current and long-term planning," he said. "If there's going to be thousands of cars a day then the city needs to plan to accommodate a changing environment."
Michie and Beatty tentatively plan to present the preliminary blight plan to the planning commission Feb. 7 and the city council Feb. 19.
-- Next week, The Eudora News will explore the use of TIFs in other communities.