City approves TIF funds for development projects

The Albuquerque City Council approved a tax increment financing district at its final meeting of the year on Monday night in hopes of spurring growth and development Downtown.

TIFs are broadly classified as a public financing and economic development tool used to subsidize redevelopment and community improvement projects, with the generated funds cycled back to the specific district for which the TIF was implemented.

The Downtown TIF that passed will encompass 321 acres — between Marble, Slate and Lomas streets on the north; the railroad tracks and Broadway Boulevard on the eastern side; Coal Avenue on the south; and Seventh, Ninth and Tenths streets to the west. The two resolutions the council unanimously approved allow the redevelopment district the ability to capture both gross receipts and property taxes for the TIF district.

The TIF was proposed by Mayor Tim Keller’s administration and sponsored by Councilor Joaquín Baca. Its passage by the City Council on Monday bookmarks what has been a decades-long effort for city officials.

“We had an effort to create a lot of TIFs in the early 2000s but ... with legal reasons in the state statutes and ordinances, they were unable to figure out how to execute (them), so we really lobbied hard at the last two legislative sessions to get changes in the state statute that allow us to make sure that these get implemented correctly,” Metropolitan Redevelopment Agency director and Keller’s chief of staff, Terry Brunner, told the Journal.

“Tax increment financing has been a kind of a redevelopment technique utilized around the nation for the last 30-plus years, and New Mexico is really late to the game on this method of redevelopment,” Brunner added.

Brunner said Downtown Albuquerque will primarily be focused on for TIF funds, with a special focus on promoting small business growth. An amendment to the bill made by Councilor Renée Grout made it so development projects that have been around longer than five years will not be eligible for TIF funds, such as the Sawmill TIF or East Central TIF.

“What is so important about this legislation is it basically gives instruction to the county assessor, and then eventually the state tax revenue department, to start a one-year accounting of the tax revenue for that area, for the Downtown area, and that’s going to be what we call the baseline assessment,” Brunner said.

Of the assessment, 75% of the funds would go toward the TIF pot while the remaining 25% would remain with the city. TIFs do not increase resident taxes, but instead capture tax revenues for the TIF district.

“We have really struggled for a long time with having any development funding to incentivize private and public development in these areas,” Brunner said. “You can really start to incentivize lots of business activity with those funds.”

Though some business owners believe TIFs would raise taxes for business owners without any true benefit, Brunner said that isn’t true.

“That’s what’s really important about TIFs, is they are only taking a percentage of the growth of taxes,” Brunner said. “The business owners are taxed the same throughout and all we’re doing is hopefully making an area grow, and then taking a portion of that growth in tax revenue and reinvesting in the place where it came from.”

Local elected officials aren’t the only ones giddy about the possible cash infusion the TIFs could bring.

“I think it’s an opportunity for us to reinvest in those areas and get that redevelopment kind of going in that area (where) it sorely is needed,” Ernie C’deBaca, president of the Albuquerque Hispano Chamber of Commerce, told the Journal Friday. “And any investor that’s willing to do that, I think they’re brave folks to try to invest in areas where they hadn’t been invested in a while.”

C’deBaca added that he was optimistic that the TIF would receive unanimous support from the council, which it did Monday night. He also hopes that TIFs can eventually be deployed to spur development across the city.

“I think it’s a reflection of the city’s willingness to help businesses in areas that need help and I think from a business person’s perspective, I think it’s a great thing, so it may give them the opportunity to think about investing in there, as well as other places in the city,” C’deBaca said.

He hopes that policy to help small businesses continues to pass locally.

“Anything we can do to help businesses grow and prosper in this state — we do enough to regulate them — we need to do a lot to incentivize them,” C’deBaca said. “It takes guts to own a small business, and we need to do things that help these people.”