Tax District Underperforming

Plan that funded Mountain Inn demolition lagging in payments

Posted: September 4, 2011 at 5:38 a.m.

Severed electrical cables and a concrete pad are all that remain of the crane that loomed over a failed development just off the Fayetteville square. A fairly unusual financing mechanism, called tax increment financing (TIF), was used to demolish the old Mountain Inn to make way for what was going to be the Renaissance Tower hotel.
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Severed electrical cables and a concrete pad are all that remain of the crane that loomed over a failed development just off the Fayetteville square. A fairly unusual financing mechanism, called tax increment financing (TIF), was used to demolish the old Mountain Inn to make way for what was going to be the Renaissance Tower hotel.

The 18-story Renaissance Tower hotel two developers planned downtown in 2004 never came to pass, but property taxes of about 1,300 downtown landowners are still paying for the demolition that cleared the way for its construction.

At A Glance

What is Tax-Increment Financing?

Tax-increment financing captures increases in property taxes within a predefined district as a way to pay to remove blight, provide infrastructure and encourage development within the district's boundaries. Typically, bonds are issued to pay for infrastructure improvements. City officials determine a baseline of property values on land and structures within the district. Any tax dollars derived from future property value growth beyond the baseline goes toward repaying the bonds.

When the project is complete and the bonds are paid off, property tax proceeds return to local governments, schools and other taxing entities at their full, increased value.

Source: Staff Report

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