1 / 15

North Corridor Commuter Rail The Case For Tax Increment Financing

North Corridor Commuter Rail The Case For Tax Increment Financing. Mecklenburg County May 2007. North Corridor Commuter Rail Project Snapshot. Project Upgrade of existing tracks on existing right-of-way 10 stations 39 Public Crossings 5 trainsets (420 seats each) Service

regis
Download Presentation

North Corridor Commuter Rail The Case For Tax Increment Financing

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. North Corridor Commuter RailThe Case For Tax Increment Financing Mecklenburg County May 2007

  2. North Corridor Commuter RailProject Snapshot • Project • Upgrade of existing tracks on existing right-of-way • 10 stations • 39 Public Crossings • 5 trainsets (420 seats each) • Service • 22 trains per day (Phase 1) • Two-way service • 30-minute headway during rush • Hourly service off-peak • Top Speed: 60-79 mph

  3. North Corridor Commuter RailIgniting The Region’s Economic Engine • 83,000 jobs within ½ mile of North Corridor Stations by 2030 • 10,000 new residential units at planned TODs • $2 billion in identified TOD projects • 250,000 residents within the corridor by 2030 • North Mecklenburg/South Iredell Growth: 179% • 4,600 daily riders • Most riders new to transit • Assumes completion of I-77

  4. The Simple FactsI-77 Headed For Breakdown Lane • Traffic Volume Is Exploding • Interstate -77 • 2007: 87,000 vehicles per day • 2030: 170,000 vehicles per day • Local Trips • 2007: 490,500 • 2030: 1,241,700 • I-77 Expansion A Distant Hope • Cost: $400-600 million in today’s dollars • No funding for design & construction • Completion: 2030 • More I-77 Shutdowns • More than 1,000 traffic accidents on I-77 (Exits 10-42) in 2004

  5. North Corridor Commuter Rail Project Costs & Funding Davidson Mount Mourne Terminus Terminus Project Cost 246 261 Funding State (25%) 62 65 CATS (34%) 84 89 Charlotte Gateway Station 24 24 Iredell County/Mooresville 18 Unfunded 76 66

  6. Leveraging Incremental Tax Revenues To Fund Rail & Local Improvements • Proposal: • Create Tax Increment Finance (TIF) Districts • Use incremental taxes generated within the TIF District to fund cost of rail & other local improvements • Bond Proceeds Would Fund – • Local road, utility & parking improvements to enhance & support transit and downtown development • North Corridor Commuter Rail Station & Crossing Costs • Source of Bonds • TIF (Amendment One) • Local Certifications of Participation (COPS) • Railroad Infrastructure Financing (RIFF)

  7. Justifying The Use of Incremental Tax Revenues • Transit & Local Improvements Generate New Tax Revenue • More multi-family housing (TOD vs. Existing Zoning) • Greater quality & concentration of retail & office • Faster build-out around transit station (3-5 years) • Faster, greater sales tax revenues from construction & commercial activities • TOD property increases value faster than surrounding areas • San Jose: +23% for commercial • Dallas: +39% for residential & 53% for office • Funds Local “Catalyst” Projects With No Near-term Funding Source • Road improvements • Parking • Utility upgrades

  8. Example Of Incremental Tax Revenue Generated By Transit • Griffith Lakes – 70-acre parcel at proposed Harris Station • Plan A: No Transit • 200,000 sq. ft of warehouse • Tax Value: $12 million • Tax revenues: $152,000 per year • Plan B: With Transit • 1,800 homes; 800,000 sq. ft commercial • Tax Value: $610 million • Tax revenues: $7.8 million per year

  9. Example Of Incremental Tax Revenue Generated By Transit • Gandy’s Eastfield Station Project at proposed Eastfield Station • Plan A: No Transit • 460 homes; 25,000 sq. ft commercial • Tax Value: $80 million • Tax revenues: $1,024,000 per year • Plan B: With Transit • 950 homes; 35,000 sq. ft commercial • Tax Value: $158 million • Tax revenues: $2,022,400 per year

  10. Understanding TIF • Bonds issued to fund the transit and catalyst projects • Only incremental taxes – taxes collected in excess of current tax base -- can be used to service bond debt • Only a portion of incremental taxes can be used to pay debt service • Typical TIF: 90-100% or more of taxes used for debt service • North Corridor: 35-50% of new taxes reserved for County services • North Corridor: 20% of new taxes reserved for Town/City services

  11. North Corridor Financial Analysis • Identify TIF Districts Sized To Fund Infrastructure Needs • Analyze Existing Assessed Value of Property Within TIF District • Calculate Future Growth Without Any TIF Investment • As-Of-Right zoning • Existing development plans • National TOD experience • Calculate Future Growth With TIF Investment • Local and adopted plans • TOD projects already underway or planned • Reasonable growth on developable sites • Calculate Bonding Capacity Funded By Incremental Taxes Generated By Future Growth

  12. Building Off Experience • Cherokee Investment Partners • Experienced Master/ Brownfield Developer • Experts in Tax Increment Financing • Significant real estate investments • Major project financing expertise • Cherokee is Helping To: • Quantify future value of the property • Assess availability of TIF to finance rail and local infrastructure needs

  13. Davidson Future Growth Scenario • Current Assessed Value of TIF District • $ 126.8 million • 11.5% of Total Tax Base • Future Build Out • 1,445 residential units • 212,000 sq. ft office • 227,000 sq. ft. retail • Future Assessed Value ($ 2007) • $ 472 million • Incremental Growth Value • $ 345.2 million • Incremental Taxes • $ 2.4 million/year

  14. DavidsonCandidate Projects For Funding • Total Potential Candidate Projects $ 22 million • Rail Improvements ($10 million) • Local CIP Projects • Potts Sloan Area Improvements ($1 million) • Downtown Parking Deck ($6 million) • Downtown Road Improvements ($5 million)

  15. Cornelius Future Growth Scenario • Current Assessed Value of TIF District • $ 32.6 million • 1% of Total Tax Base • Future Build Out • 1,439 residential units • 540,000 sq. ft commercial • Future Assessed Value ($ 2007) • $ 478 million • Incremental Future Value • $ 445.4 million • Incremental Taxes • $2.8 million

More Related