TIF to be used for new home build in Grant

by Becky Uehling

Grant Tribune-Sentinel

The City of Grant’s Community Redevelopment Authority (CRA) will work to implement Tax Increment Financing (TIF) to ensure the success of a new home build in the City of Grant, which is being developed by Southwest Nebraska Community Betterment Corporation and other local entities.

Starting in September 2021, the CRA and SWNCBC  came together to secure $462,200 from Nebraska Affordable Housing Trust Fund (NAHTF) grants for the new construction of the homes to be located at 204 Hancock and at 604 Garfield. 

The lots are owned by the Grant CRA with SWNCBC in charge of developing them. 

Additional local matching funds were provided by the Perkins County Community Foundation Fund, the Perkins County Chamber, the CRA, and SWNCBC, bringing the total amount dedicated to the project to $566,000. 

Tax Increment Financing

Because the location of the home at 204 Hancock is in a blighted and substandard area, the new home for that site was eligible for TIF financing, which the CRA pursued, according to Grant City Superintendent Edward Dunn. This will be the Grant CRA’s first TIF project, Dunn said.

 According to the State of Nebraska’s website, Tax Increment Financing (TIF) is a public financing method which has been used for redevelopment and community improvement projects in many communities in United States for more than 50 years. TIF has become an often-used financing mechanism for municipalities. 

TIF in Nebraska is primarily designed to finance the public costs associated with a private development projects. Essentially, the property tax increases resulting from a development are targeted to repay the public investment required by a project.

TIF provides a means of encouraging private investment in deteriorating areas by allowing city governments to devote all property tax revenue increases to repay the public investment. 

Nebraska voters approved community tax increment finance (then known as community improvement financing) in November 1978 and the Unicameral passed enabling legislation in 1979. The legislature revised the TIF statutes over the years. Currently, 45 other states have authorized TIF.

The TIF Steps 

During its September 28 meeting, the Grant City Council heard from the city’s CRA attorney Mike Bacon from Gothenburg before opening a public hearing on the Redevelopment Plan for the project, one of the steps before TIF can be approved by the city. There were no comments from the public during the hearing.

Bacon praised the council for seeking to implement TIF for the new build at 204 Hancock, saying the project was a “great way to use TIF for the first time,” he said.

After the public hearing was closed, the council unanimously approved the usage of TIF for the project. 

Moving Forward

Ground breaking at 204 Hancock was held on Friday, Oct. 7, with several people present who have had a hand in the project. These included representatives from the City Council, Grant CRA, SWNCBC, the Nebraska Department of Economic Development, Doolittle Construction and Noyes Quality Homes. 

According to Dunn, the new home build is a unique opportunity to use TIF for what it was intended for, to greatly enhancing a blighted and substandard area.

“This is the exact function of a thriving CRA,” Dunn said. “To remove a dilapidated structure and replace it with a livable structure, in a blighted and substandard area is a perfect fit for this project,” he said.

604 Garfield Does Not Qualify

Because the new house to be built at 604 Garfield Ave. is not in a blighted and substandard area, it will not qualify for a TIF program, he said. 

The building of the home for 204 Hancock is progressing nicely, and there have been some interest in the purchase of the house, According to Amy Thelander of SWNCBC. The person who buys the house does not have to be a first-time home buyer, but there are income guidelines they must meet. More information can be received from SWNCBC by calling 352-4338.

Thelander said because this is a unique project in the City, there are no comparisons for the new build to help set the assessed value. However, she estimates the home could sell from between $190,000 and $225,000. 

Overview of TIF Process

During the Council’s meeting, Bacon gave an overview of how the TIF process works, which included the following, taken from the State of Nebraska’s website on TIF:

• The CRA reviews the proposed project and determines if the project is not financially feasible without TIF.

• If acceptable, the project is forwarded for preparation of Redevelopment Plan and Cost Benefit analysis and Redevelopment Contract (prepared by TIF attorney).

• The CRA reviews the Redevelopment Plan and forwards to the Planning Commission for public hearing.

• Planning Commission holds the public hearing and passes a resolution making recommendation on the plan.

• The CRA receives the Planning Commission recommendation and takes action to pass a resolution recommending to the City Council.

• Notice of public hearing is made through a public notice.

• City Council passes a resolution approving the Redevelopment Plan.

• The CRA meets to pass resolution authorizing the signing of the Redevelopment Contract and issuance of bond.

• Redevelopment Contract is signed and Notice to Divide Taxes is filed with the County Assessor and County Treasurer.

Anyone with questions on the TIF project can speak to any member of the Grant CRA or to Dunn at the City of Grant.