A TIF district is a Tax Increment Financing tool utilized to fund public improvements by capturing an increase in property tax or sales tax revenue in a defined geographic district. Local government establishes a baseline for property taxes or sales taxes. As development increases the property values and/or sales tax revenue , the additional tax collected over the established base line is dedicated to pay for projects within the district.
Currently Shreveport has a downtown economic development area that includes all of the Red River District. City sales taxes collected within this district, over and above a prior year baseline, are remitted to a downtown entertainment economic development district special revenue fund. Reportedly the income generated from this entertainment economic development area is diminis. A public records request has been made for an accounting reflecting all income deposited and expenses made from this special fund. Hopefully this information will be provided before the next Council meeting.
The ordinance establishing this area has been on the books since 1999. Since that time the Red River District has fallen on hard, as in very hard, economic times. Currently three businesses are open in the district with a fourth to open in coming months, probably in October.
Money deposited in this special revenue fund is dedicated " for economic development purposes in the downtown entertainment economic development area." These funds can be pledged "in connection with tax increment financing revenue bonds for projects "in the designated area. No revenue bonds have been issued by this existing TIF.
The Shreveport City Council will have on its agenda for Sept. 23 Ordinance 97 which will create an economic development district for local, and potentially state, sales and use taxes dedicated to finance economic development projects. The annual tax base for this district will be the aggregate amount of existing sales and use taxes collected by the City of Shreveport within the district for the most recent Fiscal Year prior to the establishment of the district. Taxes collected over this base will fund this TIF.
This proposed TIF is solely planned for the benefit of Curtis "50 Cent" Jackson. TIFs that have been created locally were planned to benefit certain businesses or areas in Shreveport, but not solely for one individual who other than the purchase of downtown property and holding a festival has not conducted any business in Shreveport.
This new 50 Cent Tif district will include the Red River District PLUS properties owned by or leased by Curtis "50 Cent" Jackson: Millenium Studios and Expo Hall (leased), two buildings on Texas Street, along with one building , a dirt lot and a paved parking lot on Spring Street (all owned). And like the existing TIF the City's sale and use tax collections above a base line will be deposited into a special revenue fund.
The current Tif ordinance provides that the sales tax special revenue fund may be pledged "in connection with tax increment financing revenue bonds for projects in the downtown entertainment economic development area." To date NO revenue bonds have been issued for this area.
The proposed 50 Cent Tif provides that the collected sales tax funds will be used to provide support for film and/or television services, enhance entertainment and quality of life offerings in the district, create 10 new full-time jobs, or result in $1 million of new capital investment. This new TIF can also issue bonds to provide funds for the cost of any of the designated development projects from "sources specifically designated by the City in said cooperative endeavor agreement as amounts that are hereafter pledged to pay such bonds."
The cooperative endeavor agreement (CEA)is to be executed AFTER the TIF is approved. THE PROPOSED CEA WAS NOT ATTACHED TO THE ORDINANCE ON THE AGENDA RELEASED FOR THE LAST COUNCIL MEETING. Soooo....what funds may be pledged for any bonds is NOT known at this time. The proposed ordinance does provide that the City will have no liability for payment of any bonds other than for the funds pledged.
It's obvious that a new 50 Cent TIF will not generate much sales tax revenue. Jackson's three buildings are currently vacant and in need of renovation before being opened with the possibility of generating sales taxes. Sales at any events at Expo Hall will generate sales taxes but that will be a limited amount. If 50 Cent installs a dome--temporary or permanent--then additional sales taxes will be realized.
So, the big question is what other sources of income will the City pledge to support bonds to create the magical kingdom for 50 Cent? More details are certainly needed for a full review before a vote by the Council.
Additionally, the plan is to abolish the current TIF and replace it with the proposed 50 Cent TIF. Why this legislation does not accompany this ordinance is unknown and not explained. Seemingly these should be companion ordinances,--one to dissolve the existing TIF and one to establish the new 50 Cent TIF..