MATTHEWS – A developer with land under contract within Matthews' entertainment district has asked town staff about the potential of using tax increment financing to build out the area's road network.

Assistant Town Manager Becky Hawke explained to commissioners Oct. 25 how tax increment financing can be used to build out Independence Point Parkway with connections to the Greylock Ridge Extension and the Sportsplex at Matthews.

The town has talked about this being an important alternative to getting traffic off of John Street providing an alternative connection throughout town,” Hawke said. “Of course, there is no funding that has been identified to date.”

Tax increment financing allows the town to finance public improvements that will attract private development without tapping into its operating budget. Loans are repaid through the incremental increase in property tax revenue from the improvements. This involves creating a tax district around the project.

Hawke said some communities don't pursue tax increment financing because it can be complex and there are no guarantees. If a development project falls short of expectation, the town would have to find a way to make the debt service payments.

On the other hand, a tax increment grant allows communities to reimburse developers for the construction of public improvements through property taxes generated from new private development. Hawke said there is very low risk to the town with this strategy because funding isn't put upfront. If a developer doesn't come through, the developer doesn't get reimbursed.

Hawke said Mecklenburg County is open to tax increment grants but avoids tax increment financing due to the risk.

Mecklenburg County would have to approve a tax incremental grant in Matthews. Hawke said the county would prefer a public improvement that promotes increased connectivity to a county-owned asset, such as the sportsplex.

The county would also be favorable to an affordability component if the project involves housing as well as the developer committing to supporting Minority, Women and Small Business Enterprise-certified businesses for the project.

Hawke told commissioners the public improvement would have to include a connection to the county-owned sportsplex to meet the county's criteria. She acknowledged this was quite a bit of road and doesn't know how the developer feels about it.

Town leaders are leaning toward tax increment grants as opposed to tax increment financing due to the reduced risk and preference of Mecklenburg County.

Commissioner John Urban supported continued talks with the developer about tax-increment grants because the financing mechanism will act as a catalyst for growth. This could open the conversation up to more desirable development.

Commissioner Ken McCool asked Hawke if there was any downside to using tax increment grants.

Hawke said the only downside of tax increment grants is committing new tax revenue for up to 10 to 15 years toward reimbursing the cost to the developer. Other than that, she said the burden of the improvements falls on the developer.

Grants are typically capped at 45% of new tax revenue ranging from 10 to 20 years, Hawke said. 

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.