Committee Discussion on TIF District Process - March 12, 2026
Committee Discussion on TIF District Process - March 12, 2026
The committee continued discussion on creating a formal policy/ordinance for establishing Tax Increment Finance (TIF) districts. City Attorney Catherine Walker presented a draft policy based on Fort Worth and Olathe, Kansas policies, with modifications for Norman. Discussion focused on application process, stakeholder committee composition, economic analysis, and criteria for residential development.
Discussion Items
- Draft Policy Overview: The draft policy outlines the purpose of TIF districts as tools for strategic investment in eligible areas (historic preservation, reinvestment, or enterprise zones). It includes a "but-for" test requiring that development would not occur without dedicated TIF funds, even for projects in per se eligible areas.
- Multi-Property Requirement: A proposed requirement that TIF districts support development across multiple properties of separate ownership. Councilmember NoFire raised concerns about rural areas (e.g., Ward 5) where a single-property TIF might be needed for a small business like a bait shop/coffee shop. The committee agreed to differentiate urban vs. rural areas, allowing single-property TIFs in rural contexts.
- Economic and Risk Analysis Timing: Councilmember Gainesbury preferred conducting the economic analysis after an applicant has shown vested interest (e.g., after application fee is paid) to avoid wasting resources on unlikely projects. The city attorney confirmed the analysis would occur after application submission and fee, not before council involvement.
- Stakeholder Committee Composition: The draft proposes a 7-member ad hoc stakeholder committee representing businesses, residents, and nonprofits within the proposed project area or a 350-foot radius. Councilmember NoFire noted that rural areas may lack enough residents within that radius. The city attorney will adjust language to allow a larger radius, similar to zoning notice provisions.
- Application Process: Applications will be submitted to the city manager. They must include an economic feasibility study, four years of assessed value data, a project and financing plan with proformas, tax increment projections, and an outreach plan (or a pre-development meeting). The committee favored a pre-development meeting over an outreach plan because it provides a formal venue and minutes.
- Application Fee: Set at 1% of proposed project cost, not to exceed $10,000. The fee is refundable if the project plan is adopted and the city can reimburse its costs from TIF revenues. If not adopted, the city retains the fee.
- Assistance and Development Financing: The policy includes criteria for developers seeking TIF proceeds after district creation, such as demonstrating a financial gap, providing market feasibility studies, and job creation details. Councilmember Gainesbury asked about small business facade grants, which would not require a full market study. The city attorney will add language to allow flexibility for smaller projects like facade grants.
- Residential Development Preferences: The draft expresses preferences for affordable housing, walkability, and aging in place. Councilmembers discussed using HUD's definition of affordable housing, referencing the city's visitability ordinance (recently made permanent) for aging in place, and using engineering design code for walkability definitions. The committee agreed to flesh out these definitions and align with existing city initiatives.
- Cannibalization: If a TIF application involves relocating a business from another area of the city, sufficient justification must be included. Existing businesses that relocate into a TIF district will not be counted for sales tax increment purposes.
- Future Steps: The city attorney will bring the policy back in ordinance form at the April committee meeting. A study session is planned for June, with first reading and adoption by second reading. The committee will also review a map of eligible areas to discuss rural opportunities.
Key Outcomes
- Direction to City Attorney: Revise the draft policy to:
- Adjust multi-property language to allow single-property TIFs in rural areas.
- Modify stakeholder committee radius to accommodate low-density areas.
- Add language for small business facade grants and other flexible assistance.
- Clarify definitions for affordable housing (using HUD), walkability (using engineering design code), and aging in place (using visitability ordinance).
- Reorder the economic analysis questions to prioritize financial success of the TIF district.
- Next Meeting: April committee meeting to review the revised ordinance form and discuss the eligible area map.
Meeting Transcript
Committee for March 12th. First and only item on the agenda is continued discussion of the city process when creating a tax increment finance district. And I want to represent our recognize city attorney Catherine Walker to present. So we talked last time about how it might just be easy to get something going on paper and go from there. And so that's what I've tried to do. And I know I'm still needs work in terms of encompassing all of the feedback, but I wanted to kind of go through this and talk about how it's looking and areas where I need feedback because I don't have it yet. And things like that. So the purpose I've got it at policy/slash ordinance. I think the direction is to do an ordinance. I just haven't found a place to put it yet, but next month I'll bring it back in ordinance form to provide direction for establishment and approval of TIFF districts and set forth an application process. The policy includes, you know, these are tools for strategic investment of revenues that directly support revitalization and growth of those three areas that are per se defined as eligible areas by the local development act. Our TIFF revenue use should support efforts to concentrate public resources for substantial and significant public benefit, including but not limited to projects that will strengthen the employment and economic base of the city, increase property values and tax energy type revenues, facilitate economic self-sufficiency, promote projects that are of community-wide importance, entice catalyst projects to an area and to accelerate the improvement of market conditions to support desired development that would not otherwise occur in the area within a desired time span. That came primarily from a combination really of the Fort Worth and Olatha Kansas policies. My recollection is at the last meeting we really liked those, so I tried to include those in here. But in addition, in this 3A 2 section, not starting on page one, these are the additional things that we would be looking for. But for the dedicated funds from a TIFF district development, uh development or redevelopment would not occur. Currently, the way the local development act reads is if it's if a project is in a historic preservation area, reinvestment or enterprise area, it per se meets this but for test. So when it's already in one of those areas, that's not a test you necessarily have to analyze, but we're adding that to uh the process so that it's analyzed for all projects. Um use of a TIFF district is an appropriate incentive tool. The area is projected to increase in real property taxable value within the first five years. So this isn't something that's just gonna sit without seeing the benefit for more than five years. Uh the proposed TIFF district is expected to support development and revitalization across multiple properties of separate ownership. That's from Fort Worth. Um so just to kind of flag that one for you. In some cities, they'll do a TIFF district on a single property, and that will enable that property to uh receive some of the taxes that they're generating back. This is mirroring Fort Worth, which which is envisioning larger project areas, larger assessment districts. Um I was talking to somebody in Ward 5 about how there are certain corners and opportunities that are lacking there now, like uh a place where you know our farming community could go have a cup of coffee and a breakfast or um just some other things. If let's say there are places in Ward 5 where you can create it statutorily speaking, but it only benefits maybe one property because it's like a bait shop slash coffee slash donut place. How would that work? Yeah, that's why I wanted to flag this because I wasn't sure if that works for us. And that may be something we want to reconsider including. Um because I don't hate it. I like it because in general, but I just think of exceptions. Um, would there be a way to put an exception? If it's like this is a rural TIFF district, and um we recognize that the density for multiple properties to be uh benefited, you know, may not be the same as a highly dense urbanized area. Yeah, so what if we just say proposed TIFF districts in urban areas are expected to support development or revitalization across multiple properties? Yeah, address it that way. Um although it would be amazing if there were several people who wanted to go in on different parcels on a corner area, and it's not a strip mall per se, but you know, there's uh a little development, that would be great, but I could see it that also not happening. Yeah, yeah, if I think with that fix, we can we can make sure that that would that would still be allowed. Okay, yeah, okay. Okay, um, then the TIFF district is expected to support and encourage development that'll have a positive net fiscal impact on the city as a whole. Um, once an application is received and the application process is addressed a little further down, I might want to flip that uh to be earlier in the document. But uh the city staff will undertake an economic and risk analysis. This might be where we depending on the project seek outside help if it's a fairly straightforward project, maybe we don't need to, uh but this is that stage where we'll be able to do that. Um, and what how it's written here? Um, it's highlighted, I think, on your document because I have a question about timing. So, do we want this to what we did um on prior TIFFs? And and it's not been consistent, so I don't want to say it's happened on all of them, but when it's been proposed, we've gone to council and sought authorization to uh convene the statutory review committee work on the project. Would you rather us do this analysis first? And then if if the analysis goes well, then move forward and go and just bring it to council when the project plan is complete, or you know, what stage do we want to do this analysis?
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