Public weighs in on TIF bonds, district
Published 12:00 am Thursday, December 3, 2009
By Joanie Morris
With comments ranging from concern about retired neighbors to questions about legal action on self-financing bonds, Kannapolis City Council got an earful Monday night.
People within the tax increment financing district were notified in November, and a notice was placed in local newspapers.
Rowan and Cabarrus counties also received notice of the development financing plan. Each county had a 28-day review period. Neither county rejected the plan and as of Monday’s public hearing, all of the conditions for the district and adoption of the financing plan were met.
Jerry Lewis, a retired resident of Kannapolis, asked council during the public hearing what the bond would cost the taxpayers.
“Why are you building another park,” Lewis asked. “We have parks out the ying-yang.”
He also wanted to know how the city would keep people on fixed incomes from losing their homes.
“There’s a breaking point somewhere,” Lewis said. “I’m just tired of being pushed.”
Members of a new group in Kannapolis, South Piedmont Economic Action for Recovery (SPEAR), also spoke. The group promotes economic recovery through organization, advocacy, political education and training to impact public policy on opportunities and justice for working people. Connie Leeper, organizer of the group said the development is “not just bricks and mortar.
“We’re very excited about the N.C. Research Campus,” Leeper said. She asked about the impact of the lawsuit spearheaded by Robert “Bob” Orr against the constitutional amendment allowing self-financing bonds.
She wanted to know if businesses that received money from the venture capital fund “also receive public economic incentives.
“In terms of the city of Kannapolis, we definitely want to have some say-so on how (public) monies are used,” Leeper said. She suggested that incentives to businesses in Kannapolis be attached to local jobs for local residents. She also questioned how tax incentives — or rebates — would affect the repayment of bonds for businesses that receive incentives within the bond district.
“There are a lot of people that are retired,” Peggy Cleveland, another member of SPEAR, said. “When you are talking about self-financing bonds, people know what you are talking about.”
She said the money won’t fall out of trees planted on the campus or any other sources. “It’s going to come out of people’s pockets.”
Cleveland suggested a program for people on limited incomes so they don’t lose their homes. She also suggested the city provide a predicted percentage of increase for those who want to plan ahead for payments.
Joyce Gibson of Kannapolis praised council for progress that will benefit the whole city.
“I hope things are done equally,” Gibson said about redevelopment. “We’ve been left out of the picture a little bit” in the past.
Ryan McDaniels, director of economic development in Cabarrus County, spoke on the benefits the county is already seeing as a result of the N.C. Research Campus.
“As I travel across the nation and meet with colleagues, we often talk about this project,” McDaniels said. “It’s just amazing. … Because of this Research Campus and the work under way … we’ve already had projects visit us that wouldn’t have considered Cabarrus County, wouldn’t have considered Kannapolis, without the Research Campus.”
After nine people spoke to council, City Manager Mike Legg and council members tried to answer questions.
“In reality, being inside the bond district will have no impact on taxes,” Legg said. The only impact will come from revaluation or restoration of property within the district that would increase values. “It does not have anything to do with being inside this district.”
Legg said there is no question that things have to be done up front in order for the project to go smoothly. In addition, once projects paid for by the bonds are completed, and even before, excess funds — which are expected to be an average of $3 million to $4 million annually — will likely be “reinvested in our neighborhoods, especially ones in and around downtown.
“That money can be reinvested in our community,” Legg said. “This process will allow us to invest so that we, the citizens, own the investments. Mr. (David) Murdock never asked for a tax incentive. He asked for a partnership.”
Now that all requirements have been met, city council can approve the bond plan. It will not become effective until approved by the Local Government Commission, later this month or in January.
Once approved, the development financing plan confirms:
* The boundaries of the district.
* The proposed public and private development of the district.
* The costs of the proposed public activities.
* The sources and amounts of funds to pay for the public activities.
* The base valuation of the district.
* The projected incremental increase in property valuation of the land within the district after completion of the improvements.
* How the proposed development of the district will benefit the residents and business owners in terms of jobs, affordable housing or services.
* Any action which will be taken if the proposed project has a negative impact on residents or business owners in terms of jobs, affordable housing, services or displacement.
The proposed district for paying the bonds can’t be more than 5 percent of the city’s total municipal jurisdiction. For Kannapolis, that is 1,007.732 acres. The proposed district is composed of 864.548 acres or 4.255 percent of the city’s municipal jurisdiction.
The proposed district contains 34.179 acres in Rowan County and 830.369 acres in Cabarrus County. It consists of the North Carolina Research Campus in downtown Kannapolis; stretches of Main Street reaching north into Rowan County and south into the Midway area of Kannapolis; legs west down Mooresville Road, where the new Kannapolis Parkway is; and an area off N.C. 29 near Kannapolis Intermediate and A.L. Brown High schools. City leaders believe the residential area is poised for new growth.
Once the district is set, the city can start making money to pay for the bonds. If the property value of a house is $100,000, and the owner is paying 49.7 cents per $100 in valuation, they will pay $497 in taxes for 2006. That money will go into the general fund to run the city as it always has.
When the value goes up in the district — either due to revaluation or improvements — and it is then worth $150,000, the homeowner would pay $497 to the general fund for the original $100,000 and $246 for the additional $50,000 in value. The $246 would go to pay off the bond. Revaluation will occur in Cabarrus in 2008, to go into effect in January 2009.