TAX INCREMENT FINANCING (TIF)

Tax Increment Financing is a common term and tax initiative that's implemented in new developments. The use of TIF is governed by state law. It enables URAs, like P3, to collect the new property and/or sales tax revenues generated within a designated urban renewal area to help finance further improvements. Essentially, TIF is the difference (or the increment) between the amount of property tax collected when a URA is established and the amount of property tax collected after property values have increased.

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LET’S TALK P3: EPISODE 7
TAX INCREMENT FINANCING

WHERE TIF COMES FROM

TIF is not a separate tax but rather the difference in property tax over time. When an urban renewal area is created, the property tax is locked at a specific rate for 25 years. As development activity increases, the property tax increases. That difference between the locked property tax rate and increased property tax revenue becomes TIF dollars.

This increase in property and sales tax revenues would not otherwise be available if it wasn’t for the redevelopment project. This incremental revenue difference is captured and used to fund TIF, which is reinvested in other Urban Renewal Area projects.

After 25 years, TIF collection stops and the original property tax collection model snaps back into place.

THE LIFE CYCLE AND USE OF TIF

This tax increment is collected by P3 and they reinvest that money into the URA to build more public improvements. This, in turn, inspires more private investment, and thus property values continue to increase. Once the lifespan of TIF is complete, all the public entities that receive property taxes (including the Town of Parker, Douglas County, the school district) - they will receive revenue based on the new, higher property valuations.

TIF dollars can be used to

  • Finance the issuance of bonds

  • Reimburse developers for a portion of their project costs

  • Acquire property

  • Make public improvements to support redevelopment efforts

TIF Policy

About the Policy

P3 may provide four categories of assistance within Parker’s three Urban Renewal Areas. These include:

  • Tax Increment Financing

  • Infrastructure Cost Participation

  • Relocation Assistance

  • Other Miscellaneous Tools and Strategies.

Any assistance requested will be reviewed against the listed criteria and the applicable Urban Renewal Plan's goals.

Assistance offered by P3 is not intended to replace other financings from private or public sources. Rather, it is intended to bridge funding gaps created by the difficult and sometimes costly nature of infill development.

Determining the Need for Financial Assistance

To determine if a project warrants financial assistance P3 generally has three questions it asks when assessing the project:

  • Is the planned development feasible?

  • Is there a reasonable expectation that the marketplace could affect an appropriate redevelopment on its own?

  • Are the incremental taxes that are expected to be generated by the site sufficient to close the identified financial gap?

Do you have questions or need help getting started? Contact us today!

Qualitative Investment Filter

The investment filter below provides a framework for P3 staff and committee members to consider the fit and benefits of potential investments and to make recommendations to the P3 Board on proposed activities. It includes criteria that apply to all P3 activities as well as criteria tailored to each district.

ALL P3's DISTRICTS

  • Which P3 Objectives and Strategies does this investment advance?

  • What conditions of blight are removed or reduced with this investment?

  • What elements of the investment offer a compelling opportunity and/or catalyst for other development?

  • How well does the investment fit with the desired character of development in Parker?

IF THE INVESTMENT MEETS THE GENERAL CRITERIA ABOVE IN A SUFFICIENT MANNER, IT SHOULD BE EVALUATED SPECIFICALLY FOR ITS GIVEN URA DISTRICT LOCATION:

Parker Central District

  • Will the investment help bring activity and vibrancy to the heart of Parker?

  • Is the investment mixed use, or does it support establishment of a wider mix of uses amongst its surroundings?

  • Does the investment advance Parker Central’s arts and cultural district niche?

Parker Road District

  • Does the investment bring new jobs within targeted industries in this district?

  • Does the investment help streamline access to and from Parker Road?

  • Does the investment help elevate development quality in this district to match other areas of our community?

Cottonwood District

  • Does the investment help diversify the mix of uses within Cottonwood?

  • Does the investment enhance access or character within this important gateway?

  • Does the investment improve connectivity to surrounding neighborhoods?

TIF Applications

Learn more about the TIF process and how you can apply in the Comprehensive TIF Policy (PDF).

Parker Central

Parker Road

Cottonwood