During Monday's City Commission Meeting, commissioners engaged in a discussion about the renewal and a proposed five-year update, along with a boundary area amendment request, submitted by F&W Tractor Company, Inc. These changes pertain to the City's Neighborhood Revitalization Plan and may potentially involve authorizing the distribution of the updated plan to other local taxing jurisdictions.
The statutory foundation for designating a neighborhood revitalization area within a municipality is established by K.S.A. 12-17,114 through 12-17,120. These statutes grant municipalities the authority to identify specific areas as neighborhood revitalization areas based on the determination that certain conditions are met and that the rehabilitation, conservation, or redevelopment of the area is necessary to protect the public health, safety, or welfare of the residents.
The statutory provisions further allow for property tax increments generated by improvements in these designated areas to be returned to taxpayers in the form of rebates. For the purposes of the Kansas Neighborhood Revitalization Act, the term "municipality" encompasses various local entities supported by tax funds.
Prior to designating an area as a neighborhood revitalization area, or a structure as a dilapidated structure, the governing body is required to adopt a plan that includes specific elements such as a legal description of the area, assessed valuations, zoning classifications, eligibility criteria for property revitalization, and more. Additionally, a public hearing must be held before the plan's adoption.
Salina's Neighborhood Revitalization Program:
The City of Salina and several local taxing jurisdictions have been implementing a Neighborhood Revitalization Plan since 1996. The most recent version of this plan took effect on June 4, 2018, and remains in force until December 31, 2023. Any renewal or amendments to the plan must receive ratification from all affected taxing jurisdictions, which, in Salina's case, include Saline County, USO No. 305, Salina Public Library, Salina Airport Authority, and the Central Kansas University Extension District.
Changes Made in the 2018 - 2023 Neighborhood Revitalization Plan:
In 2017, the City Commission considered four requests for amendments to the existing plan. The resulting 2018 - 2023 Neighborhood Revitalization Plan introduced several significant changes:
- Removal of downtown properties from the Neighborhood Revitalization Area due to potential conflicts with property tax value increases and rebates, mainly due to Tax Increment Financing district development.
- Introduction of a new category of projects eligible for an increased percentage of property tax rebates and an extended term.
- Inclusion of property south and west of North Ohio Street and Interstate 70 within the Neighborhood Revitalization Area.
- Expansion of the Neighborhood Revitalization Area to encompass property bounded by Iron Avenue, Indiana Avenue, Gypsum Avenue, and Delaware Avenue to promote infill housing.
- Various clarifications and edits to enhance the communication of the original plan's intent.
Current Tax Rebate Formula:
The Neighborhood Revitalization Program utilizes specific formulas to determine the rebate amount and eligibility duration for different project categories. The formulas distinguish between eligible residential, commercial/industrial projects, and Projects of Exceptional Community Significance. The latter, as designated by the City Commission, are eligible for a 95% rebate for 15 years.
Proposed 2023 Plan Changes:
For the upcoming 2023 plan renewal, the staff does not propose substantial alterations to the Neighborhood Revitalization Program or Area. However, they have received a request from F&W Tractor Company, Inc. of Hutchinson, Kansas, doing business as Agri-Center, to modify the Neighborhood Revitalization Area's boundary to encompass their 5-acre parcel at 1097 West Old Highway 40.
The request from Agri-Center stems from their intention to establish an Agri-Center agricultural implement dealership in this location. The property was annexed in July 2022, but it lies outside the existing Neighborhood Revitalization Area boundaries. Agri-Center's request seeks to include their property within the revitalization area due to their significant contributions to the local community.
The financial impact of these changes hinges on whether the projects under consideration would proceed without the proposed tax incentives. If the incentives are deemed essential for the projects' viability, they can be seen as an investment, potentially bringing in additional tax revenue. However, if the developments would occur regardless of the incentives, the tax abatements may be viewed as a cost or expense.
As of now, there is not enough information to estimate the value of the rebates for Agri-Center. Both items discussed at the City Commission Meeting were unanimously approved with a 5-0 vote.