Community Redevelopment Agency -
Frequently Asked Terms & Questions
Q: What is TIF?
A: Tax Increment Financing (TIF) is a unique tool available
to cities and counties for the redevelopment of urban areas. It is used
to leverage public funds to promote private sector activity. Property
values in certain areas are capped or frozen at the assessed value for
a particular base year. Thereafter, any tax revenues due to increases
in property value in excess of the base year value are dedicated to the
redevelopment area. Taxing entities, which contribute to the tax increment,
continue to receive property tax revenues based on frozen value and are
available for general government purposes. Any funds received from a tax
increment financing area must be used for specific redevelopment purposes
outlined in the statute, and not for general government purposes.
Tax increment financing was originally developed over 30 years ago as
a method to meet the local match requirements of federal grant programs.
With the reduction in federal funds available for local projects, tax
increment financing is standing ever more on its own as a method to finance
local redevelopment. The Community Redevelopment Act calls for private
sector involvement to the maximum extent possible, to coordinate public
and private sector initiatives and successfully revitalize communities
which would otherwise further decline.
See
also page 255 of the Downtown Redevelopment Plan.
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Q: What is Tax Increment Financing (TIF)?
A: TIF is a revenue mechanism that pledges the anticipated
future CRA revenues to pay the debt service on revenue bonds. Revenue
bonds are used to pay for improvements within the CRA districts as outlined
in the redevelopment plans.
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Q: Who may use TIF?
A: TIF may be used by any Florida city or by any county,
provided that a county can function within the corporate limits of a city
only when the governing body of the city has by resolution authorized
it.
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Q: What can the Tax Increment revenues be used
for?
A: TIF revenues are to be deposited into a separate
trust fund, and separate from municipality general funds, and can solely
be used for redevelopment projects and programs within the areas as specified
in the adopted redevelopment plan.
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Q: What is the Community Redevelopment Agency
(CRA)?
A: The CRA is a dependent taxing district established
by City government for the purpose of carrying out redevelopment activities
that include reducing or eliminating blight, improving the tax base, and
encouraging public and private investments in the CRA. The City Council
is the official Community Redevelopment Agency for Clearwater.
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Q: What is a Request for Proposal (RFP)?
A: A public solicitation to developers and /or property
owners to redevelop a parcel or group of parcels in accordance with specific
guidelines set forth by the CRA. The guidelines may include use, or a
mix of uses, density, building height and setback requirements, parking
and open space standards, or their conditions. These standards are often
set forth in a design for development. RFP's are most often used to attract
proposals for agency-owned parcels.
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Q: What is Redevelopment?
A: Planning, development, replanning, redesign, clearance,
reconstruction, or rehabilitation of all or part of a project area. Redevelopment
is a comprehensive effort to eliminate blight and otherwise improve an
area through a commitment of public funds and actions. Redevelopment usually
entails constructing and rehabilitating housing, improving public facilities,
promoting employment opportunities and encouraging private investment.
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Q: What is the definition of Market Value?
A: The fair value of a piece of property, based on
the "highest and the best use." That is the use (and intensity
of use) permitted by land use and zoning codes which result required by
law to pay the fair market value for property it acquires, and must use
independent private appraiser to set the values it offers to property
owners.
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Q: Will property taxes be raised?
A: It is important to note that higher taxes from the
sale, development or rehabilitation of property reflect a rise in property
value and not an increase in tax rates. Until a property is improved or
sold, assessed values and tax rates in redevelopment areas are restricted
by Proposition 13 limitations.
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Q: Do I pay additional tax for having a CRA?
A: No. The property tax increment from the property
taxes that are currently assessed and repaid for by the taxing districts
with the CRA area.
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Q: If I live outside the CRA area, are my property
taxes being used to pay for redevelopment projects?
A: No. Only properties that are located within the defined
CRA area are affected by the tax increment.
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Q: What is a Special District?
A: A special district is similar to municipalities
and counties. They are more alike than they are different. They all have
a governing board with policy-making powers. They all provide essential
public services. They all operate within a defined geographical area.
What is the difference? The primary difference is their purpose. Municipalities
and counties provide general governmental services. A Special
District provides specialized purpose government and focus only
on those benefiting from the services. In general, the special district
has the following characteristics:
- Have a governing board with policy-making powers
- Operate within a limited geographical area
- Are usually created by general law, special act, local ordinance,
inter-local agreement, or by rule of the Governor and Cabinet.
The following are NOT special districts:
- General-Purpose Governments (Cities and Counties)
- School Districts
- Community Colleges
- Municipal Service Taxing or Benefit Units
- Seminole and Miccosukee Tribe Special Improvement Districts
- Boards providing electrical services that are political subdivision
of a municipal part of a municipality
- Entities with governing boards that do not have policy-making powers,
such as advisory boards
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