By: MATTHEW ROBERTSON
Published: July 28, 2011
Plans to dismantle a Tax Increment Financing (TIF) district — originally proposed to fuel downtown Florence redevelopment — to accommodate a proposed boutique hotel would be unfair to existing merchants, Florence City Councilman Ed Robinson said in a press conference late Thursday morning.
Robinson’s opposition comes one week after a proposal by Florence County Council to dismantle the TIF district as part of an incentive package that would bring a 53-room, upscale boutique hotel, a $5.6 million investment expected to create roughly 100 jobs, to downtown Florence.
Plans to convert the old Cosmos building at 126 W. Evans St. were announced in June when Florence Mayor Stephen J. Wukela sent a letter to Florence County Council Chairman K.G. “Rusty” Smith and Florence County Council proposing an incentive package for the venture.
In order for the incentive package to work, the TIF that is in place must be removed so a multi-county business park can be formed that would allow the county to offer special tax revenue credits to the hotel project for seven years.
In a statement released early Thursday, Robinson said removing the TIF district would deprive existing merchants, most of whom are minorities, of the benefits and redevelopment funds a large business like a hotel would bring.
“There are proposed substantial investments in downtown, and that is a good thing. If done fairly, it could enhance the present businesses downtown,” Robinson said.
A TIF is designed to encourage investment in an area, causing property taxes to increase as improvements are made. As property value increases, the TIF channels portions of the new tax revenue toward funding projects related to further infrastructure development to compliment the ongoing investment.
In the case of the proposed hotel and restaurant, the amount of investment is not enough to trigger the TIF. In order to enact the special business district proposed in the plan, the old Cosmos building must be removed from the TIF district. That way, the property can receive the special tax credits and the TIF remains intact.
County council proposed last week to lift all the TIF rather than just the parcel on which the hotel would sit. In its place, a “Multi-County Industrial Park” would be established, allowing the county to incentivize the development in a way the TIF could not do.
But if the entire historic district is removed from the downtown TIF, then the TIF money goes with it — something Robinson said would cut existing businesses from a possible revenue source that could give them a leg up on participating in downtown redevelopment.
“When you’re taking away the funding source to help develop the low-income areas, then it’s not going to develop,” he said. “What’s going to happen is the people who will be able to afford to come downtown are the people who have a lot of money, because there’s nothing coming in as a result of removing the TIF district to uplift the deprived businesses within the city of Florence.”
Robinson isn’t the only city councilman with misgivings about removing the TIF. Councilman Steve Powers said last week he’s concerned such a move would allow the county to use tax revenue from downtown investment for projects other than downtown development.
Robinson called on city and county officials to pursue previously discussed plans that would help downtown merchants, including:
The financing of a business incubator for downtown
The creation of micro business loans to encourage minority investment downtown
Financial support and counseling for existing businesses to help them change and grow
The proposed incentive for the hotel project would save the hotel and restaurant money during the renovation and first several years of business and allow the hotel and restaurant to become successfully established.
Based on current tax rates and projected land values, the deal would equal roughly $500,000 in tax credits.
City council members voted unanimously last week to instruct its staff to engage county staff and relevant parties in a discussion about the plan.