Councilors adopt Urban Renewal Authority resolution, pushing project forward
Craig city councilors adopted a resolution Tuesday to establish the City of Craig Urban Renewal Authority.
The resolution was the next step in creating an Urban Renewal Authority in Craig. Establishing an area gives incentives to a developer to make improvements, build or fill an empty building and spruce up an obvious eyesore in the city, such as the mall. In fact, the mall is a big reason why Craig is interested in such a plan.
Currently, the city is in the presentation process with other tax amenities in the area, and once that is complete, they’ll move into the negotiations with the tax amenities and establish intergovernmental agreements formed as needed to fully implement the authority.
Negotiations with other taxing bodies such as the county and the school district, would include “meeting and attempting to negotiate an agreement” on what tax revenues may be included in the plan, and plan how revenues would be split.
There is a 120-day negotiation period, and if an agreement cannot be reached it would move to mediation, which is a structured, interactive process where an impartial third party assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques.
This is the first time Craig’s looked at establishing an Urban Renewal Authority.
In an Urban Renewal Update presentation Tuesday night from Carolynne C. White, a zoning and land use attorney from Brownstein Hyatt Farber Schreck, she told councilors that the first step is adopting a resolution to establish an Urban Renewal Authority within Craig.
Prior to adopting the resolution, the city of Craig had to complete a conditions survey, determining if blight exists with the city. According to White’s presentation, the city completed that survey on Oct. 15, 2020 and determined that blight did exist.
Following the survey, the city conducted an authority petition that required 25 signatures from citizens supporting an Urban Renewal Authority. That was completed in mid-January, according to White’s presentation.
White added that part of the overall goal behind the Urban Renewal Authority is to increase all of the property values over time, more than they otherwise would have increased without the URA.
In previous Craig Press reporting, city leaders have expressed hopes to offer so-called property tax increment financing in those districts, and that means all the entities that benefit from property taxes, such as the fire department, the library and the county, will have to agree to the proposal. A board of individuals representing those taxing entities would run the authority.
Tax increment financing is essentially a deferral on the property tax increase that comes when developers improve an area. Property taxes are set based on the value of that property, and improving it immediately makes that value jump, if not skyrocket, in value, making the taxes jump as well. Developers would agree to pay that increase back in a time period of, say, 25 years or so, rather than getting hit with that cost all at once. The agreement allows developers to make money off their investment first and, in theory, set some profits aside to cover the increase in property tax. The agreement eases the tax burden — and a big expense — that comes with improving a piece of property.
Following White’s presentation, Axis Steel Operations Manager Chris Thome asked if those that own property within the possible URA areas would see an increase in current property taxes.
“As part of this Urban Renewal area, do we face an increase in property taxes? A decrease? Flatline? What do we expect?” Thome asked.
White said that the answer might be a maybe.
“What I mean by that is, the Urban Renewal Authority does not have the authority to increase a tax rate,” White said. “Tax rate stays the same. If the school district has 30 mills, it stays 30 mills. If the city has 11 mills, it stays at 11 mills. What could happen is your property value might increase if the assessor assigns a higher value to it in the future, so you might pay more taxes because your property value has increased, not the property tax rate.”
Councilor Steve Mazzuca brought up some concerns he has heard from residents about the URA possibly giving the government more control over property owners.
White stated that the URA does not give the government more power over property owners, it just gives the government more tools to provide more incentives to property owners for upgrades and cleaning up other properties.
Following nearly an hour-long discussion regarding URA, the decision to adopt the URA resolution passed by a 6-1 vote. Councilor Paul James was the lone “no” vote.
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