How much TIF leftover money is there lying around Lincoln?
On Monday, the Lincoln City Council was asked to approve using $400,000 worth of “leftover TIF” funds from an old redevelopment project to do a streetscape project a few blocks to the south.
The redevelopment project was at the Lincoln Star back — back when it was called the Lincoln Star and not the Lincoln Journal Star. The redevelopment project dates to 1996, and the value of the property involved has increased from $800,000 then to more than $4 million now.
Anyway, this is an example of a TIF project where the bonds have been paid off, and extra TIF money is sitting in a bank account. So the Urban Development Department comes up with a plan to use the money, by expanding the border of the original TIF district to include a new area, therefore allowing them to spend the money over there. In this case, they’re expanding from the Journal Star area to M Street from Seventh to 17th streets.
Today, I called for a full accounting or report from the city on all of the TIF funds that have this kind of “leftover” money in them. How many are there? How much money is in them? Can it be used for infrastructure needs in the area of the TIF districts? Should it be returned to the original taxing entities instead of used by the city? These are my questions.
This is not the first time the city has used leftover TIF funds for a nearby pet project. The city also plans to use leftover money from a Lincoln Mall project for Centennial Mall.
Here’s how the city sometimes ends up with extra TIF dollars: The city buys the TIF bonds, which are usually 15-year bonds, and if the project generates more property tax revenue than projected (which is often the case, since the city used to be very conservative in their estimates), the bonds can be paid off earlier than that. But the money that would have otherwise been property taxes instead accumulates in the TIF account.
Back when I was a reporter, I asked some council members about these TIF pots of money, but they seemed clueless about them. And uninterested. Well, I’m interested. Perhaps the money could be used for street work — but I wouldn’t blame the school district, county and NRD (to name the big ones) for feeling like they’d like some of this leftover TIF money, too.
In the Lincoln Star case, if the city chose to give the extra money to the taxing entities that would normally receive it, the city would only get $56,000, whereas the school district would get about $240,000. So you can see why the city prefers to keep the excess money all to itself.