Communities become great because they undertake great initiatives, says Aiken County Councilman Chuck Smith. This is why he and six of his colleagues voted to move ahead on a bold new plan to meld private development with TIF, a South Carolina acronym for Tax Increment Financing (in Georgia, it's Tax Allocation Districts, or TADs).
Here's how it works: Local government freezes taxes in a defined tax district, usually in a blighted metropolitan area, and then issues bonds to fund redevelopment there. The bonds are paid back with higher and more plentiful property taxes, generated in excess of the district's frozen rate, by increased values that come with redevelopment.
The good thing about TIF, if all goes right, is that there's no extra pain to taxpayers. But there's plenty of gain: population and economic growth, improved infrastructure and a more vibrant community.
TIF programs aren't new to the Aiken area. The city of Aiken floated $1.5 million in bonds in the mid-1990s to revitalize an eight-square-block downtown area, and that seems to be working out OK.
But the plan the county council is looking at - which still has to go through public hearings and two more readings, plus get the school board's approval, before it's implemented - is much more ambitious, and different, than most TIF programs.
Yet, this is what makes it exciting and shows that the council is visionary enough, in Smith's words, "to think outside the box."
Instead of applying TIF to a decaying inner-city neighborhood, the council would enter into an innovative public-private partnership that wouldn't redevelop - it would actually develop about 2,400 acres in rural parts of the county in the Graniteville area. This may mark the first time that a TIF would be used to develop undeveloped land. It's certainly unusual.
Under a tentative agreement reached with the Fine Deering Development Group, $92.4 million would be spent on the project before it's completed in 2030. Aiken County's share, $36.3 million, would fund infrastructure needs such as roads, sewers and the like.
That money will be paid back over a 10-year period by the tax revenues from homes and businesses being built with $56.1 million of Fine Deering's money.
Estimates are that if the development succeeds, acreage now yielding $4,400 in annual tax revenues would be worth $1.15 billion and generate $14.4 million in yearly revenues. That's a terrific return on investment. But it's not without risk.
Two county council members are concerned that services such as police, schools and fire - already available to residents of blighted neighborhoods - would have to be paid for from scratch in newly developed areas. Who'd pay for that?
There are other questions, too, that need answering before granting final approval. The point is that the project should not be rejected just because it's new and unusual, or because there's some risk involved. Taking sensible risks is what moved this nation ahead. It's also what makes some communities great, while others flounder.
© 2018. All Rights Reserved. | Contact Us