06/03/1985 Meeting - Laserfiche WebLink

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M E M 0 RAN DUM - May 31,1985 TO: Mayor and City Council FROM: Eugene Development Department SUBJECT: TAX INCREMENT FINANCING At the May 20 meeting of the City Council, additional information was requested from staff on tax increment financing. This memorandum reviews how tax increment financing districts are established, how tax increment financing works, the process for establishing a district, and the financial considerations of tax increment financing. . - Background and History of Tax Increment Financing Tax increment financing for renewal projects was passed by the Oregon Legis- lature in 1961 following a constitutional amendment in 1959. Since that time Eugene has established three renewal districts: the downtown Central Eugene Project, a residential project near the University of Oregon, and the State Street project in the Bethel-Danebo area. The two residential pro- jects have been completed and were closed out. The Central Eugene project is still operating and continues to address downtown goals and objectives. Establishing Tax Increment Districts Tax increment districts are established by action of the governing body of the City or County. The districts are administered by a renewal agency which has certain powers under the provisions of the State statutes. The Eugene City Council is the official renewal agency for the City of Eugene but the council may, as it has done in the past, appoint a separate body to administer a renewal district. A renewal district is established upon completion of a renewal plan. The first step in setting up a renewal district is determining an area which contains certain deficiencies as outlined in the State statutes. These blighting influences form the basis for the objectives of the proposed district. Most important, a financial analysis is undertaken to determine the cost of correcting the blighting influences and to determine the cost of other projects which implement the goals and objectives of the district. In the case of the proposed Riverfront Park, the blighting influence would be the lack of adequate access, the absence of adequate utility systems, deficient building conditions, and areas subject to flooding. After the costs are estimated, a financial plan is put together to show how the projects will be financed. This is where tax increment financing becomes ,important as it can provide the primary means to finance the projects. e