November 16, 2016
For More Information Contact:
Windsor Locks First Selectman Chris Kervick
Windsor Locks voters went to the polls on Tuesday November 15th and resoundingly approved the establishment of a Downtown Tax Increment Financing District, becoming the first municipality in the State to take advantage of a 2015 law designed to help municipalities revitalize their downtown commercial areas.
“The idea,” according to Windsor Locks First Selectman Chris Kervick, “is to allow us to leverage new revenue from early improvements in the district to help stimulate and support continued investment in the district – it is a way to build on momentum – and it works best when there are one or two big projects up front to get things moving in the right direction.”
Windsor Locks has that big up front project with the recently approved plans of Boston-based Beacon Communities to invest $64 million dollars in converting the abandoned Montgomery Mill, which looms over Main Street, into 164 upscale one and two bedroom apartments. Beacon’s President of Development Dara Kovel maintained that the promise of the TIF District played a big role in the company’s decision to invest in Windsor Locks. “The TIF district will help move the project forward with a stronger economic footing,” Kovel stated after she learned of the approval, “and it also signals that Windsor Locks is serious about revitalizing the entire district around our project, which is very important to us.”
The 2015 law allows municipalities to help rejuvenate blighted and depressed commercial sections without placing additional burdens on taxpayers. Tax Increment Financing Districts, or TIFs as they are commonly known, have been used successfully in many states across the nation. The State of Maine, in particular, has successfully redeveloped many commercial centers in its post-industrial mill towns through the intelligent use of TIF Districts. “Not only will the TIF District not burden taxpayers but it will increase revenue as new investment in the District continues and assessments continue to rise,” Kervick emphasized. “Success breeds success.”
In general, a TIF District works by determining the current tax assessment on each property within the district and the revenue produced by that assessment at the time the District is created. Any increase in taxes that results from a rise in the assessment in subsequent years is known as “the increment.” While the town’s general fund continues to receive the amount of taxes it was collecting at the time the district was created, the increment, if any, is deposited into a separate municipal account. Expenditures from this account may be used on improvements and programming within the district, on incentives to entice developers to invest in the district or to pay for expenses such as infrastructure improvements, schools or public safety that result from activity within the TIF.
As for spending, the same budgetary authority and restrictions that control spending from the general fund also control spending from the TIF account. The general fund continues to receive the revenue it had been receiving. It is only the taxes that are realized from the new value created in the district which are segregated and reinvested in the district.
This is a creative way to stimulate revitalization of downtown at no expense to the taxpayer because it relies only on new money coming in,” stated Kervick, “and it makes so much sense for Windsor Locks that it was easy for most residents to get behind it.”
Click here to read the Town of Windsor Locks’ Downtown Tax Increment Financing District and District Master Plan.