The city of Sulphur Springs took the most important step in revamping downtown Tuesday with the creation of a tax reinvestment zone that will fund $5.6 million in improvements to the downtown area.
The organizational meeting of the Tax Increment Financing Reinvestment Zone is the first step toward funding the massive redevelopment project that will change the look of downtown and upgrade and restore deteriorating buildings and an aging infrastructure.
Chris Brown was confirmed as chairman of the Tax Increment Financing Reinvestment Zone One board of directors Tuesday, with Cletis Millsap being named vice chairman and Gary Spraggins secretary of the board. Other board of directors members include Oscar Aguilar and Jan Chapman.
“The downtown area represents the historic heart of the city,” project organizers wrote in the summary of the project and financing plan for the reinvestment zone. “There was a time when it represented the economic heart of the city, as well.”
But the central business district’s economic impact minimized over the years as more active commercial areas moved further and further from downtown, which in turn contributed to deteriorating structures and an inadequate sidewalk and traffic system, the report states.
“As a result of the obvious economic depletion, the central core acted as a dysfunctional factor on the local economic stage, representing and contributing to decline rather than incubating and prospering civic progress,” the summary continued, noting that more than 70 percent of the buildings in the downtown area are in need of repairs, restoration and development.
“At its low point in 2007, the city started its revitalization process, which included creation of TIFRZ #1,” the report continued. “It is the policy of the city of Sulphur Springs to strategically change course and revitalize its downtown core.”
If all goes as planned, the vast majority of work will be completed by 2013. The scope of work includes:
= Reconstructing the streets and sidewalks in and around downtown, using architectural elements and construction methods employed in rebuilding Main Street. The targeted streets are those within or in close proximity to the central square and include Gilmer, Main, Connally, Jefferson and Church streets, along with Oak Avenue. Plans also included a study to measure the viability of returning downtown traffic to two-way.
= Replace all sewer and water mains found to be “economically depleted.” The funding for this work, however, will come from the city’s Enterprise Fund, which is used for capital projects involving the water distribution system.
= Placing electrical utility service lines underground where economically feasible.
= Help business owners repair and improve their building facades in line with the architectural styles and standards established by the city.
= Design and create a park for the downtown square.
= Facilitate business development where possible.
= Design and construct a covered central market on Main Street.
Street work, estimated at $2.2 million will account for most of the costs. Work on the “street transitions” leading into and away from the square will add another $400,000 under preliminary estimates. The central park is expected to cost another $400,000, the Main Street covered market $360,000, and construction on Connally Street — for which planning has already begun — $550,000. Various other projects — railroad crossings, planning and engineering, the water and sewer improvements, etc. — account for the remainder of the budget.
Work could begin relatively quickly. The traffic study is expected to be completed by August and the preliminary master plan by December of this year.
Connally Street, which is undergoing a similar redesign as Main Street did, is hoped to be complete by January of 2010. Following the completion of the final master plan for the entire project, expected to be in place by April of 2010, work on the downtown portion of Gilmer and Main Streets will follow. The central downtown park could be completed by September 2011. Oak Avenue could be completed by 2012 and Jeffer
son Street work the following year.
Other segments of the total project would be fit into the schedule “where expedient.”
The work will be paid for initially through two issuances of Certificates of Obligation — i.e., bonds — the first in the late spring or summer of this year. That bond issue is expected to be $3.8 million.
The second bond of $1.15 million is planned to be issued in 2012 and coincide with the next five-year Capital Improvements Project plan.
Money to pay the debt down will come from the increase in tax receipts caused by property valuations rising as development and interest in the tax increment financing zone accrue. Both the city and the county governments have agreed to allow 100 percent of the increased tax receipts to be plowed back into downtown development; Hopkins County Memorial Hospital is giving up 25 percent of the increase in taxes collected on downtown properties.
The downtown area has already seen property values rise since the city first began addressing the problems in the area.
In 2007, the baseline of taxable value in the TIFRZ was $14.18 million. By 2008, it had grown to $14.5 million — but that market value was calculated after the Hopkins County government had taken the multi-million dollar Fidelity Express building off the tax rolls. The numbers also do not include the current addition being built on to City National Bank or a new dentist’s office on Oak Avenue.
Initially, the TIF zone tax receipts would not be enough to service the debt. The city is supplying $350,000 to pay the expected interest only on the first three years of the first bond issue.
The TIFRZ would cease to exist after 25 years, but the increased property values are expected to more than cover the bond debt and pay back the city any money used to help with debt service.
Should everything not go according to plan, however, the financial planners have also set up various “firewalls” in the budgeting process to allow the city to any needed breaks in spending until conditions improve.
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