Washington City Council Chambers

Only two downtown property owners are benefiting from the city’s small TIF program, but officials say they had expected more to take advantage of the tax incentive. 

Last week, the Washington City Council approved only the second “mini-TIF” (Tax Increment Finance) since the program began in 2012. The agreement allows for the developers of the Mroz property, located at 18 E. Front St., to recapture a portion of the increase in property tax after the property is developed through rebates.

The mini-TIF program expires in 2030, and those approved to participate can seek rebates annually until that time. 

The developers, Riverfront Leather, plan to rehabilitate four commercial units on the street level along Front Street and an additional six residential units on the upper floor.

Sal Maniaci, community and economic development director, said by using the mini-TIF program, Riverfront Leather will bring new life into a historic building and incur savings in property taxes.

“It is an excellent program that is meant to encourage owners of historic buildings in the downtown TIF District to redevelop and take full advantage of everything their building has to offer,” Maniaci said. “The program can assist in façade improvements and when an owner wants to renovate their upper floors for residential or commercial uses.”

Riverfront Leather president Ed Mroz, the building owner, is working with contractor Matthew Flagg, Flagg Enterprises LLC.

City Administrator Darren Lamb noted that any property owner considering facade or rehabilitation work should look into the mini-TIF.

“They would be getting tax rebates for work they already intended on doing,” he said. 

According to Maniaci there are several buildings in Downtown Washington that could benefit from the program, if owners are in the financial position to move forward with a renovation project.

“There are a number of historic buildings downtown that could potentially apply for this program,” he commented. 

“It’s not for everybody, but if an owner is doing significant renovations I would definitely recommend applying,” Maniaci added. “The application fee is only $150 while savings could be over $100,000 for certain projects.”

First Small TIF

The only other mini-TIF in Washington was approved last year for Rick and Karen Marquart to rehab the Langenberg Hat Building for a mixed-use building with a restaurant and apartments on the bottom floor and apartments on the second floor. The building now houses Streetside Tacos at 330 W. Front St.

The project included the remodeling of both the first and second floors of the Front Street building. The first floor was renovated for the restaurant and two apartments, as well as a patio and other renovations.

The second floor is being converted into four apartments. The city’s historic preservation commission backed the plans in December 2016.

Under the program, the developer would be eligible for $70,000 in assistance. The $70,000 is split between the historical facade renovation ($40,000) and upper floor residential units ($30,000).

Once the $70,000 is met, the money generated would reroute back into the Bank of Washington TIF fund that expires in 2030.

Mroz Building

Riverfront Leathers is eligible for $40,000 in possible rebates through the facade program, and $30,000 in possible rebates through the Upstairs Residential Program. The rebates are only available up to those amounts, or until the program expires in 2030, whichever comes first, Maniaci noted.

The applicant is estimating an increase of $4,029 in property taxes annually, allowing them up to $3,223 in rebates each year. The estimate is based off the Franklin County assessor’s current records.

If an assessment increases dramatically, the 80 percent rebate increases. Sales tax is collected in its entirety and placed in the existing TIF district, Maniaci said.

Under that estimate, he explained, Riverfront Leather would not “max out” the program, but it would continue to request rebates until 2030.

Since Mroz will be utilizing funds from the small TIF program, the design plans are mandatory review and mandatory compliance through the Washington Historic Preservation Commission.

“Of the two active projects, we won’t know exactly what their rebates will be until they receive their first tax bills after renovation is complete,” Maniaci added. “But just economic impact downtown from both, together they will add 12 residential units and four commercial spaces that didn’t exist prior. 

“They both bring life and revenue to buildings that were previously severely underutilized.”

Options

Listed below are the four options for mini-TIFs and an explanation of what renovation must occur:

• Historic Building Façade Renovation —  Assistance to the property owners with renovations to historic building facades within the Downtown District. Up to $40,000 will be provided for historical renovation projects for buildings that are either located within a National Register Historic District or recognized as a local “landmark” by the Washington City Council;

• General Façade Renovation — Assistance to the property owners with renovations to building facades within the Downtown District. Façade assistance up to $30,000 will be provided for general façade renovation projects for buildings not eligible for the Historic Façade Renovation Program;

• Residential Unit Assistance Program — Assistance to property owners that want to develop upper floor residential spaces within the Downtown District. The city will participate in the project for reasonable residential-related rehabilitation costs for upper floor units. The city will provide up to $30 per square foot for eligible rehabilitation costs with a maximum award of $30,000;

• Commercial Unit Assistance Program — Assistance to property owners who want to develop upper floor commercial spaces within the Downtown District. The city will participate in the project for reasonable commercial-related rehabilitation costs for upper floor units. The  city will provide up to $30 per square foot for eligible rehabilitation costs with a maximum award of $30,000; and 

• General Building Rehabilitation Program —  Assistance to property owners who want to restore and rehabilitate properties located in the Downtown District for projects that do not qualify for Program Options 1 through 4. Projects that rehabilitate interior first floor spaces, address safety or code compliance issues, encourage LEED (Leadership in Energy and Environmental Design) or environmental sustainable construction, or provide new or reinvestment in critical building systems will be considered. Projects will be eligible for up to $20,000.