July 18, 2024

Greenfield leaders get crash course on TIF

Bruce Nuzum, President of the business management firm Iowa Area Development Group, gave a crash course on tax increment financing (TIF) to Greenfield leaders during the Tuesday, May 23 city council meeting at city hall.

This presentation came as the city talks about a housing project the city is aiming to embark upon. Housing is a major topic Greenfield is looking to improve upon.

“My goal here over the next little bit is to make TIF as easy as possible to understand,” Nuzum said. “The concept is really easy, but as the attorneys will tell you, the devil is in the details. We don’t have to get into the details tonight, we’re just going to talk in a broad sense to see how things work.”

Nuzum said TIF is explained as being the ability for a city or county to capture new property taxes within a defined Urban Renewal Area or TIF district for the benefit of the area. It does nothing with existing taxes.

The Urban Renewal Area is an overall designated area needing assistance while the TIF district is a specific area from which TIF will be captured for a set time period, and they do not have to be an adjoining area. Once the time period sunsets, taxes are distributed normally again. Schools have partial levy protection when TIF use is in effect.

Cities and counties can establish TIF districts together or separately, and funds have to be used within the Urban Renewal Area. There are traditional uses, such as streets, utilities, streetscapes, public facilities or business incentives or grants, but TIF can be used on housing projects if certain limits and caveats are met for low to moderate income residents.

If used on a housing project, these low to moderate income requirements are that unless the project is dedicated to at least 80% low to moderate income residents, there is only a 10-year sunset on the TIF. If it is not, developers must use an equivalent of the area’s low to moderate income percentage. According to the report, Adair County’s percentage is approximately 43%.

Slum and blight and economic development are the two types of urban renewal areas. A larger percentage of them are for economic development in rural areas.

Greenfield Development Corporation (GCDC) President Scott Tonderum told the newspaper in April that the development group asked the city about the possibility of using TIF as a tool within the housing project they have been discussing. It is proposed to be on a 17-acre tract of land located in the southwest portion of Greenfield, just west of the elevator, and possibly in other areas in the community.

Iowa Area Development Group not only works with municipal utilities like Greenfield Municipal Utilities, it works with rural electric cooperatives like Farmers Electric, based in Greenfield, Nuzum said.

Other area examples of TIF use are revenue the county is capturing from wind turbines and revenue Stuart has used for its business park and other areas in town.

Caleb Nelson

Caleb Nelson

Caleb Nelson has served as News Editor of the Adair County Free Press and Fontanelle Observer since Oct. 2017. He and his wife Kilee live in Greenfield. In Greenfield and the greater Adair County area, he values the opportunity to tell peoples' stories, enjoys playing guitar, following all levels of sports, and being a part of his local church.