FREMONT – Some local businesses in Fremont will soon reach the end of their Tax Increment Financing (TIF) periods.
According to Scott Meister, Market President for Pinnacle Bank in Fremont, Tax Increment Financing is a way for a developer to fund some of their project costs, such as infrastructure costs.
“They can utilize the taxes that would be assessed on the increased evaluation of that property,” said Meister. “They get reimbursed for those taxes that are on just that part of it.”
This is a method for cities to entice developers to come to their communities and set up shop and do business. TIF periods can last from seven to 15 years, depending on the project. The City of Fremont currently has five businesses utilizing Tax Increment Financing.
Those businesses are Fremont Contract Carriers, Christensen Lumber Company, Powerhouse Apartments, the building for the State of Nebraska Department of Health & Human Services, and Eagle Distributing.
Meister says it may look like the city is giving something up, but TIF is actually a positive thing for the community.
“It’s an incentive for businesses to come here and businesses to stay here,” said Meister. “Those businesses wouldn’t be here if it weren’t for that tax increment financing option. It is used as a tool for economic development to attract businesses here.”
Fremont Contract Carriers have reached the end of their TIF period, and will begin paying the excess taxes this year. Both Christensen Lumber Company and Powerhouse Apartments will start paying in 2019, Eagle Distributing will begin paying in four years, not counting 2017, and the developer for the building leased by the State of Nebraska Department of Health & Human Services will start paying in eight years, also not counting 2017. When all of the Fremont businesses currently utilizing this option roll off their TIF period, the city will see an estimated $300,000 coming back a year from the excess taxes.