By Jim Fausett
Tax increment financing, a mechanism authorized by Iowa law, allows local governments to use future projected taxes to finance current improvements, including economic development and urban revitalization.
This has proved to be an essential tool for cities in Iowa allowing them to expand the property and sales tax base while spurring job and income growth.
Coralville, which remains among Iowa’s fastest-growing cities, successfully has used TIF for infrastructure improvements such as streets, sanitary sewer and water, employment retention and growth, economic growth and redevelopment.
Recognizing that employment retention and growth are critical to a community’s well-being, Coralville has used TIF or direct business assistance to attract and grow interstate commerce companies in several areas of the city, including the University of Iowa Research Park.
In 2012, employment in the research park (excluding the State Hygienic Laboratory) totaled 1,210. The average annual salary at the research park is $62,613; employees reside in 45 Iowa counties and 161 cities.
The city’s use of TIF for installation of the original infrastructure, including streets and utilities throughout the park, also has supported its growth.
Employment at other businesses that received city support totaled 696. These employers include CIVCO, Zero Energy Systems, Protek, Innovative Software Engineering, Sedgwick, Integrated DNA Technologies, C.H. Robinson and West Music Distribution Center.
SALES TAX SPIKE
Economic growth also has fueled an increase in taxable retail sales in Coralville. In 1997, the year before the opening of Coral Ridge Mall, sales totaled $167 million. In 2011, sales totaled $722 million. (Note: TIF was used for development of the streets surrounding the mall and was not paid to mall developers as an incentive). This growth in taxable retail sales represents an increase of more $33 million in annual state sales tax revenue from Coralville. The state sales tax supports the state general fund, a portion of which is distributed to school districts.
TIF fuels economic growth throughout the greater community as well.
Taxable retail sales grew for Johnson County and for Iowa from 1997 to the present, as they did in Coralville. From 1995 to 2011, growth in valuation of properties outside of urban renewal areas in Coralville was 35 percent higher than valuation growth in other areas of the county outside of urban renewal areas.
TIF also has allowed for redevelopment of areas that have become blighted, suffered actual or perceived environmental contamination, or are not being put to their best use.
One example in Coralville is the 12th Avenue Urban Renewal Area, now home of Town Centre and the Coralville Center for the Performing Arts. A $40 million private redevelopment is planned for this area and made possible by the purchase of flooded homes in 2008 using TIF.
Another example is Iowa River Landing, a former industrial park that is home to the Coralville Marriott Hotel and Conference Center, Backpocket Brewery, a University of Iowa Hospitals and Clinics facility, wetlands park and more. Cleanup of this area has included treatment and removal of 197,000 cubic yards of arsenic-impacted soils and fills, 74 cubic yards of lead-contaminated soils, and 103,000 gallons of petroleum-impacted groundwater.
Coralville’s leadership in brownfields redevelopment has received national and regional recognition for solving critical environmental challenges and transforming blighted and contaminated areas into productive new uses.
This year, we anticipate continued progress in the Iowa River Landing with the opening of Von Maur and restaurants 30hop and Charlotte’s. Other plans include the opening of Sedgwick, a claims management service that will employ more than 300 people, just south of Forevergreen Road; completion of the Oakdale Boulevard extension to Dubuque Street; completion of several flood mitigation projects; and the beginning of private redevelopment work in Old Town.
Through the allowed use of TIF and communitywide comprehensive planning, Coralville has become an economically vibrant community where people want to live, work and play. I am proud to be a part of it.
Jim Fausett is mayor of Coralville. Comments: firstname.lastname@example.org