The Vermont Economic Progress Council (VEPC) has unanimously approved South Burlington’s tax increment financing proposal for the development of a proposed “City Center.”
The approval of this financing mechanism sets the groundwork for a 30-year-old vision for a downtown in South Burlington, said Ilona Blanchard, project director for the city.
“Because we have this in place, it allows us to move forward,” Blanchard said. “It gives everybody confidence.”
That confidence is important for private investment in the area, she said. Private investments will create tax revenues that will be used to pay for the debt incurred by public infrastructure development in the TIF district.
This is how tax increment financing, or TIF, works: Public investment in infrastructure projects will attract taxable private development projects, which will subsidize the city’s debt on the project.
The city will set aside 75 percent of the property tax revenue from new development in the district to repay debt incurred from public investment in the project. In addition, 75 percent of the statewide education property tax due on the new development will go toward retiring the debt.
However, the vision for the city’s downtown is still far from fruition. The first stages of construction are tentatively scheduled for 2018.
Blanchard said the TIF district is currently overgrown and saturated with stormwater. The city will first need to invest in environmental and transportation infrastructure in the area before the private sector comes in to set up new businesses.
“We don’t have anything,” she said, referring to the current state of the TIF district. “You are putting all this stuff in place that can support the type of development we want.”
Currently, the City Center does not even have a street. Potash Street or Garden Street, the name for the conceptual thoroughfare yet to be decided, will connect Dorset Street to Williston Road. This will mark the main artery for what is to be the 106-acre “heart” of South Burlington’s downtown.
The street will likely be the first of the project’s development, Blanchard said.
The city applied for TIF district funding in August and VEPC put the application through the wringer, Blanchard said, a process that has taken nearly a year and totaling seven meetings.
According to Blanchard, this was the council’s longest review process to date.
The city will still need a financing plan approved by VEPC. Aside from developing further design and engineering plans, the city will also need voter approval before any project can be built.
TIF district funding will not pay for entire project. A federal grant will be used for the market street area and impact fees will be used for the design and engineering of the street, Blanchard said.
