ACC to reap rewards of Seaholm TIF without the risk

The City of Austin is making the rounds of its fellow taxing authorities this week with a resolution that allows them to opt out of the Tax Increment Financing Zone, or TIF, the city is using to redevelop the Seaholm Power Plant area in Downtown Austin.

 

Last night, the Austin Community College Board of Trustees approved a resolution stating that it will not participate in the Seaholm TIF, but will still benefit from tax revenues generated by the Seaholm renovation. ACC officials estimate that the district will receive an additional $200,000 in tax revenue per year once the project is completed.

 

“What this agreement does is waives ACC’S right to appoint a member to the TIF board, and waive a 60-day notice rule for the city before it holds a formal public hearing on the TIF,” said Ben Ferrell, ACC’s Vice President of Business Services. “It also names a member of the ACC staff, Bill Mullane, as our contact person for matters involving the TIF.”

 

Tax Increment Finance Zones are widely used by local governments to finance redevelopment projects. The concept is that the redevelopment of property in a specific zone will lead to increases in property and sales taxes over time within that zone. The increased tax revenues are the tax increment that the local government leverages by pledging it towards service of the debt that was issued to fund the redevelopment. 

  

The city’s Rodney Gonzales told told trustees that the tax revenues they collect would be theirs without a financial commitment.

 

“You are allowed to collect the revenues for the increased value that will go on your tax rolls,” he said. “We estimate that the tax base on the Seaholm Redevelopment will add about $117 million to the tax rolls.”

 

Gonzales, acting director of the Economic Growth and Redevelopment Services Office, said that the Seaholm project will be public-private partnership in which the Art Deco building on Cesar Chavez will be redeveloped into a meeting center with shops, restaurants and meeting spaces. Also on the grounds will be office space, condominiums and a hotel.

 

Board Member (and former Council member) Raul Alvarez asked if the land would still belong to the city.

 

“Under our current development agreement, the city will continue to own the land, but the developer will hold a long-term lease on it and will own the buildings,” Gonzales said. The city signed a Master Development Agreement with Seaholm Power LLC, lead by Southwest Strategies Group, in June. The entire project is expected to cost $113 million, with construct expected to begin in early 2009. 

 

Gonzales said he had already made a similar presentation to the Travis County Health Care District last week, and would be visiting with the Travis County Commissioners Court today and the Austin Independent School District next Monday.