Legislation Introduced To Strengthen Laws Authorizing Redevelopment Districts In Nashville
NASHVILLE, Tenn. (Feb. 24, 2016) – Mayor Megan Barry, Councilmembers at-large Bob Mendes and Erica Gilmore are announcing new legislation, reached in consultation with the Metropolitan Development and Housing Agency (MDHA), aimed at clarifying and strengthening rules related to tax increment financing (TIF) in MDHA redevelopment districts.
“MDHA redevelopment districts are a great tool for helping to revitalize parts of Nashville, and this legislation will strengthen that tool in a way that create more clarity and promote transparency in the process,” said Mayor Barry. “Now, once the term of a TIF loan expires, the increment tax revenues previously used to pay down the loan will be returned to the general fund to be invested in areas such as public safety, education, and transportation.”
The legislation, filed by Councilmembers Mendes and Gilmore, revises laws related to redevelopment districts, which created by MDHA and approved by the Metro Council with the purpose of promoting redevelopment that is sustainable from economic, environmental, aesthetic, public safety, and historic preservationist perspectives.
"This ordinance changes the ground rules for tax increment financing in Nashville by letting Metro recover tax revenue more quickly, giving Metro more ability to decide what projects are funded with our tax dollars, and requiring new annual reporting about all TIF loans," said CM Mendes. "I want to thank the Mayor's Office and MDHA for working to improve how tax increment financing works and is reported to the public."
Tax increment financing is a tool used by MDHA in approved redevelopment districts that utilizes incremental increase in property taxes from projects to pay off loans used to get the projects built. Once the loans are paid off, the new tax revenues are available to Metro in the general fund.
“MDHA has a 30 year history of administering TIF for the better of Nashville. This tool has made possible countless projects including Hall of Fame Park, First Tennessee Park, Ascend Amphitheater and a mixed-use project at 1821 Jefferson Street,” said Ralph Mosley, MDHA board chair. “We hope these new refinements will help the general public better understand the program.”
Highlights of the legislation include:
- It clarifies that tax increment financing (TIF) revenues collected for future TIF loans will stay with the Metropolitan Government general fund once the loans are paid off.
- All new redevelopment district plans, and future amendments to existing plans, will require the proceeds from land sold by MDHA to be used solely within that particular redevelopment district area. The ordinance includes an express exception to allow revenues from the three Rolling Mill Hill properties being sold by MDHA to be used as part of the Envision Cayce project.
- All new TIF loans approved after the effective date of the ordinance will require that the debt service portion of the taxes remain with Metro and are not to be pledged toward payment of the TIF loans.
- The ordinance adds specific reporting requirements for MDHA to provide to the Finance Director and Council. This will include information about the terms of each outstanding TIF loan, as well as information about the use of TIF throughout all of the redevelopment districts.
The proposed ordinance, BL2016-157, will be heard on first reading on Tuesday, March 1st.