HUNTSVILLE, Ala. - Huntsville City Council passed a resolution for the city to begin working on a Tax Increment Financing (TIF) District plan for part of Huntsville-annexed Limestone County that could someday include a new auto plant.
Our news partners at AL.com and the Huntsville Times reported the Huntsville TVA megasite located off Powell Road is a place where Toyota-Mazda could locate its highly sought-after plant. Leaders have been mum about the project and its prospects in Huntsville, but residents tell AL.com that the land is being considered.
The megasite is 1500 acres. The new TIF, if created, would envelop the megasite to include a total of 5200 acres, said Shane Davis, Urban and Economic Development Director for the city. It would lie adjacent to a TIF that already exists in the Greenbrier area by Polaris.
Leaders say a TIF would be helpful in recruiting business to the area in a timely manner.
Thursday, the city council approved work to start on a plan for a future TIF there. They're calling it "TIF 7."
What is a TIF?
TIF stands for "tax increment financing," and it is a special district for paying off improvements to land used in big economic development projects.
Within the district, property tax revenue can be turned into debt repayment. It helps an area pay for itself once it becomes developed.
It works like this: The city wants to make improvements out in this area by the new Polaris plant. They can't afford the upwards-of-fifty-million up front, so they issue bonds, basically borrowing money. All new property tax revenue inside the TIF district -- from new development in the area -- goes to paying that money back.
Davis said it creates a win-win situation.
"It provides a competitive edge, not just for Huntsville but for Limestone County. It usually equals jobs, and then it helps offset some infrastructure costs so it's not a burden on budgets," he said. "Most of our TIFs, when you look, they pay off early."
Huntsville has multiple TIFs. You can view them here.
How can it help recruit business?
A TIF would be key, said Davis, because it allows for speed.
"We just want to be able to react to a company's project timing," said Davis. "Speed equals money, and it becomes a big factor."
By already having a TIF plan established at a site, Huntsville can usher a development in without having to start from scratch.
"Think about the projects we have won in the past few years. Remington, Polaris, GE Aviation. Those are highly competitive projects. Blue Origin, Aerojet," Davis listed. "With the economy starting to turn, we are seeing more projects we are competing for. States are getting as sophisticated as they can to act very quickly on those projects. Creating this TIF district plan would allow us to act quicker."
The Huntsville Madison County Chamber of Commerce has 46 active economic development projects in the works at the time this article was published, according to officials there.
They're hoping that a TIF plan could help land one of them.
"It makes us competitive," noted Davis. "We don't comment on any economic development project we are working on, but anything we can do to put an additional tool in our toolbox."
There will be lots of work before a TIF can be created in the area identified.
Thursday, the city council voted to give authorization to staff to start developing a TIF 7 plan. They also approved a public hearing to be set for it. That will be held in January.
That means the public will have a chance to hear more about the plan and what a potential TIF district in that area would mean.