South Charleston City Council passed a resolution Thursday night to set a public hearing on a tax increment financing district that would cover much of the city.
South Charleston Mayor Frank Mullens said the TIF district could bring in a projected $350 million for public and private developments in the city, ranging from an educational complex to a wellness center.
The public comment session, the first step toward establishing the TIF district, will be held at noon on Feb. 23.
“We expect people that might have some concerns about the TIF,” Mullens said. “But the public hearing is going to help get people on the same page. It can be complicated because there are so many moving parts, but it’s important for everyone to understand.”
The TIF would not create a new tax or change the tax structure, which is what Mullens said currently is the concern among South Charleston residents. Rather, the district, officially known as The South Charleston Park Place Economic Opportunity Development District, would have sales tax revenue generated by new private businesses go toward various public projects.
The public projects that would receive funds through the TIF include: an educational complex at the West Virginia Regional Tech Park; the Jefferson Road expansion project; an access road at The Shoppes at Trace Fork; and the Thomas Hospital Wellness Center. The funding would total $155 million.
New private businesses would be expected to settle in at one of two locations.
One would be across from Southridge Center at the Little Creek Village shopping center, which still is in its development stage.
The other location would be the fly ash pond once owned by FMC near the Kanawha Turnpike exit off of Interstate 64, in which excess fill from the Jefferson Road project would fill the pond to create land for commercial use. That district, referred to as Redevelopment District I, also would have a real estate TIF.
Commercial development has been planned before for the pond. In 2007, THF Realty announced its plans to buy the property with the intent of filling it and building restaurants and retail stores on the space. However, THF Realty was unable to find enough retailers willing to establish a location at the planned shopping center and let its purchase option expire.
TIF districts are a common way for municipalities to bring in new private businesses, typically larger retailers, by having local tax revenue go toward their development. The state drew Cabela’s to open a store in Wheeling in 2004 via a TIF district.
The city plans to finance the projects through a $155 million bond on a 15-year term with a 3.5 percent interest rate. An incremental sales tax increase and additional tax revenue through new private development as a result of the TIF district would go toward the bond.
Setting up the public hearing was just the first hurdle for the TIF district to clear. The next step is approval of its application by the West Virginia Department of Commerce, which would be submitted at some point after the hearing, and then by the Legislature in its upcoming session.