Tax Increment Financing (TIF) is a real estate development tool used to reimburse certain eligible costs for commercial development projects. TIF uses the increases in real estate tax revenues within a TIF district to reimburse the developer on a “pay-as-you-go” basis (in other words, as such revenues are generated over time). The City of Salina has created a TIF district and approved a TIF project plan in order to allow for application of these revenues to incentivize new commercial and infrastructure.
Community Improvement Districts (CID) can accelerate new development and redevelopment, enhancing the quality of life and the economic well-being within the district through the use of an add-on sales tax throughout the CID. The City of Salina has established a CID in downtown Salina. An additional sales and use tax of 1% will be charged throughout the CID with a portion of the revenue generated to reimburse developers and other businesses for some of the cost of eligible improvement projects within the CID. Developers/owners of proposed new projects in the CID and owners of existing businesses in the CID are encouraged to apply for use of the CID funds through the process described here.
Opportunity Zones, established by Congress in December 2017, promote long-term investments in low-income areas, with the goal of stimulating development in these economically distressed communities. This program allows taxpayers to re-invest private capital gains and postpone or decrease federal capital gains taxes in low-income communities designated as “Qualified Opportunity Zones.”
Opportunity Zones are intended to be accessible to all classes of investors and businesses, and not just select developers and properties within the designated zone. In addition, there is no cap on gains made on investments in an Opportunity Zone.
Salina2020 and the City will both serve as resources for questions potential applicants have as they evaluate a potential request for these incentives. However, neither Salina2020 nor the City can offer legal advice and so recommend applicants procure legal counsel for the interpretation of any statutes or legal documents involved in this process.
Allocations of incentives will be approved jointly by the City of Salina and Salina2020, Inc., the master developer of the downtown project.
Each project approved for an allocation of incentive funds must be completed prior to eligibility for receipt of such funds. After project completion, funds will be distributed on a pay-as-you-go basis (i.e., as revenues are generated over time) pursuant to a priority system.
The City of Salina administers the disbursement of funds within the TIF and CID districts.
There is no specific deadline—application for these incentives may be made on an ongoing basis.
The TIF project plan was approved in 2016 and will be in place for 20 years. The CID district sales tax will commence on July 1, 2019 and will be in place for 22 years. It is anticipated the districts will be terminated following the expiration of these periods.