Skip to main content
You have permission to edit this article.
Edit
North Platte’s TIF projects pay off

North Platte’s TIF projects pay off

  • 0
{{featured_button_text}}
North Platte’s TIF projects pay off

This table shows key statistics for the first 10 projects that the city of North Platte approved for tax increment financing between 1999 and 2004. All 10 are now fully on local property tax rolls. “Base value” is the taxable value when each project began, while “% value chg” reflects the growth between that figure and the property’s 2020 taxable value. The “%/city val” figure is each property’s current share of North Platte’s property tax base. The “Sandhills Bank” project represents Sandhills State Bank’s current main location at East B and Dewey streets. The bank site was previously occupied by Pro Printing, which then moved to East Halligan Drive and most recently into the Keith Theatre Building in the downtown Canteen District.

As the millennium turned, North Platte made its first lasting moves into using tax increment financing to prompt immediate local investment and longer-term tax growth.

Of the 18 TIF projects the City Council has approved since 1999, the first 10 — all enabled between that year and 2004 — are now fully on local property tax rolls.

The Telegraph has analyzed the performance of those 10 projects as the City Council awaits a formal TIF proposal for renovating Platte River Mall and expects one for a proposed beef processing plant after that.

Council members Tuesday will decide whether the would-be packing-plant site and other property along Newberry Access should be made TIF-eligible. The mall site already has that status.

If TIF amounts to “delayed gratification” — in terms of property taxes — North Platte’s first 10 projects have delivered.

TIF sets aside property taxes generated by increases in an approved project’s taxable value for up to 15 years. Those taxes help repay a developer’s eligible costs, usually for new or improved streets and utilities.

Meanwhile, local governments continue to share taxes on the property’s “base value” for no more than 15 years.

If the project’s designated costs are covered in less time, TIF goes away faster. If the 15-year clock runs out first, the developer swallows whatever isn’t covered.

Among the findings of our analysis:

» The first 10 TIF projects’ total 2020 taxable value of $56.96 million is nearly nine times higher than their combined $6.48 million in “base valuations” at the start of their projects. (Remember that a 100% increase means a number has doubled.)

» They accounted for 3.5% of North Platte’s citywide 2020 valuation of $1.62 billion and produced nearly $1.18 million in combined real estate taxes.

The Walmart Distribution Center led the group with $20.45 million in 2020 taxable value, 1.3% of the city’s total. Menards was next with a $15.04 million 2020 valuation.

» Eight of the 10 paid off their designated project costs before their 15-year clocks expired, with five of them — including Menards and the Walmart DC — going fully on the tax rolls after just eight years.

The two projects that didn’t quite recoup their full amounts were the 1999 remodeling of North Platte’s former Quality Inn (now Ramada by Wyndham) and Wilkinson Development’s 2004 strip mall just north of the Walmart Supercenter.

» Though all 10 have at least doubled their pre-project taxable valuations, 2020 valuations for seven of them are 10 times their starting points or better.

While North Platte is reaping the projects’ property tax benefits now, two local leaders say, those figures can’t quantify the more immediate tax benefits local governments realized all along the way.

Chief among those are personal property taxes on business equipment — which go on the tax rolls immediately — and city sales taxes those projects pay, collect or both.

The 10 projects “created a lot of new wealth” as seen in current valuations, said Gary Person, president and CEO of the North Platte Area Chamber & Development Corp.

But “think of the other businesses that came as a result of them and the number of houses that have been built (for employees) and the number of cars (for them) that pay property tax and sales tax.”

City officials always weigh the potential for both short-term and long-term tax gains as part of a TIF project’s cost-benefit analysis, said Person and Community Redevelopment Authority Chairman Mike Jacobson.

Its “multiplier effect” through employees’ spending and growth in supporting businesses is “where the real economic development occurs,” Jacobson said.

The NebraskaLand National Bank founder and chief executive also called to mind the “but for” test that state law requires of would-be TIF projects.

“Would these projects have been built without TIF?” he said. “We believe the answer in every case is no.”

North Platte had six of its current eight TIF projects listed at various points in their 15-year clocks in the Revenue Department’s most recent report for the 2020 tax year.

They included Iron Trail Industrial Park, the first stage of Chief Industries’ eventual three-stage development plan, but not the Pacific Place Apartments expansion or DP Management Inc.’s mixed-use project at West A Street and Lakeview Boulevard.

The $53,270 base value of Iron Trail’s site at the north end of Twin Rivers Business Park already had grown by $1.26 million in 2020.

It’s the taxes from that “excess value” that are currently set aside to repay Chief’s eligible TIF costs for the warehousing and manufacturing buildings it has put up.

The nearly $75 million Platte River Mall redevelopment plan, unveiled Thursday, seeks $8.12 million in TIF assistance. Its eligible costs include the $7.15 million that Rev Development LLC of Lincoln paid for the mall in November.

The mall property, however, was valued for tax purposes at just $2.83 million in 2020. It had been $8.87 million as late as 2016.

If the City Council approves TIF aid for the mall, its eventual 2021 valuation most likely will be its “base value” for TIF purposes. Jacobson said the 2021 valuation is supposed to reflect the mall’s actual taxable value on Jan. 1, two months after Rev’s purchase.

But while local governments will continue to collect taxes on that 2021 valuation, they’re getting nothing from the retired city sewer lagoon proposed for Sustainable Beef LLC’s nearly $300 million packing plant.

That’s because the old lagoon is city-owned — for now — and exempt from property taxes. The city will have to sell the site to Sustainable Beef if the project goes forward.

Based on information from that project’s leaders, Jacobson said, about half the estimated $300 million construction cost would go toward buying equipment.

Such equipment, if taxable under state law, would immediately boost North Platte’s tax base through personal property taxes. So would city sales taxes Sustainable Beef would pay during and after construction, Jacobson said.

If the city should approve TIF aid, he said, the other half of project spending would influence the site’s eventual real estate taxable value to be set by the Lincoln County Assessor’s Office.

That entire value would be tapped to repay Sustainable Beef LLC’s TIF costs, Jacobson said, because the site’s current value is zero.

The firm’s leaders have said they’d use TIF to help cover the cost of raising the retired lagoon 4 to 5 feet for the meatpacking plant.

Get local news delivered to your inbox!

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Most Popular

Sarah Talbott, president of the North Platte Downtown Association, thanked the group’s members before Thursday night’s debut of the overhead “festoon lighting” above North Dewey Street in the historic Canteen District.

Recommended for you

Get up-to-the-minute news sent straight to your device.

Topics

Breaking News