How are urban renewal projects funded?

Funding occurs through tax increment financing; a taxing concept for economic redevelopment. The basic idea is simple: future tax revenues pay for revitalization efforts. The City Council, acting on the recommendations from the Ketchum Urban Renewal Agency (KURA), draws a line around an area (Revenue Allocation Area) and identifies desirable improvements or concepts within that area (Urban Renewal Plan). The KURA issues urban renewal bonds to pay for the identified improvements, or pays for these improvements directly out of the tax revenue, often called “pay as you go”.  As property values increase in the area due to new investment, the rise in property tax revenues (called “tax increment”) is used to pay off the urban renewal bonds. This financing method is called tax-increment financing, and it is the most common method of paying for improvements in an urban renewal area.Tax Increment Financing

Comments are closed.

Clean Web Design