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Tax Increment Financing (TIF) allows a developer to be reimbursed for a portion of their redevelopment costs out of the incremental increase in certain property and sales taxes generated by a redevelopment project.
A TIF district may only be created in areas designated as a state Enterprise Zone, including blighted or conservation areas.
- Redevelopment costs are paid from incremental increases in property and sales tax revenue generated by new development.
- Existing property and sales tax revenue is “frozen” until the project generates sufficient revenue to pay for redevelopment costs in an agreement between the City and the developer of the project.
- Under Kansas law, redevelopment costs may only go toward:
- Demolition of existing structures.
- Public infrastructure improvements such as road and utility construction.
- Land acquisition
- Under Kansas law, redevelopment costs may not go toward:
- Private building construction.
- Ongoing maintenance costs
City Council Policy F-7: Tax Increment Financing Policy