You've probably heard of Tax Increment Financing (TIF). But do you understand what it is and how it benefits the Hiawatha community?
The increment is the difference between taxes on underdeveloped properties and newly developed facilities. The total amount of TIF funding awarded depends upon the new taxable property value added to a property.
While TIF was originally intended for the redevelopment of blighted areas and for properties with depressed property values, Iowa law began to expand and change in the 1980's. Local control became the norm and city officials became the governing bodies who could decide if TIF financing made sense for their economic development and public improvement plans.
Hiawatha was an early and active champion of TIF.
Iowa law states that cities may have numerous TIF areas. The advantages for Hiawatha are clear. Among many favorable outcomes, TIF:
- Promotes public and private partnerships.
- Increases property values and broadens the city tax base.
- Promotes private investment and development.
- Permits the city to make decisions, rather than state or federal bodies.
- Creates jobs and supports training programs.
- Allows other businesses outside TIF to grow.
Interested developers can apply to the Hiawatha Economic Development Corporation, or HEDCO. On average, between 5-8 businesses accept Hiawatha TIF financing per year. The scale and scope of each project varies.
Over a 7-year time span, the city of Hiawatha has invested more than $57 million dollars in private and public projects promoting economic growth.
The Tax Increment Financing program is a discretionary program in Hiawatha. Start the process by filling out an application. The term of a TIF program is from 1-5 years and the amount of the TIF varies based on the City's policy and committee determinations.