BELOIT—The City of Beloit may soon be poised to lower tax rates for residents, while still being able to offer incentives enticing developers and businesses to the area with the anticipated closure of multiple tax increment financing districts next year, according to City Finance Director Eric Miller.
In a presentation to the Beloit City Council, Miller informed councilors that due to debt service payments and financial restructuring, the city is anticipating closing five Tax Increment Districts (TID) by April of 2022.
Up for closure next year would be: TID 8 (Casino/Willowbrook), TID 9 (former Beloit Mall), TID 10 (Gateway Business Park), TID 11 (Sager Lane) and TID 12 (Frito Lay).
Increment financing districts are a tool used by municipalities across the country to attract development to certain areas, offering incentives like infrastructure improvements, along with offering no tax rate changes over a period of years specified in development agreements. Tax revenue generated in a district can only be used within the area for planned improvements.
By closing a TID, all tax revenue generated within the district would be transferred to the city’s general tax roll, and Miller said the multiple closures could lead to potential reductions in overall tax rates for residents and businesses.
The move would also allow the city to open a new TID area, if needed, Miller added.
“That’s the big news we’ve been waiting for: To be able to help to continue development and provide incentives to people who want to come to Beloit,” Miller said. “It’s really significant in terms of economic development for what it can do for the tax base.”
The Gateway TID is the city’s largest increment financing district that has seen an average annual increase of approximately $2 million in overall value since 2017. Overall, the city’s total TID value for all districts is $301.6 million as of January 2020, the date most recent data was available.
Beloit’s 2020 increment value, what the land in a district is worth above the base after a property is improved, is expected to balloon from $257 million to reach $480 million after the Amazon distribution center is added to the city’s TID log.
“It’s the largest increase I have ever seen in my career,” Miller told councilors.
In 2021, 707 building permits worth a total of $16.5 million have been approved as of July 1 in the City of Beloit. In 2019, 1,170 building permits were approved worth a total construction value of $153.2 million. Those figures remained higher than normal even in pandemic-struck 2020, as the city approved 1,217 building permits worth $87.3 million in overall construction value.
Those figures do not include building projects like the addition of a future Kwik Trip on Prairie Avenue; the storage unit development at the former Shopko building on Prairie Avenue or the Spray-Tek project in the Gateway Business Park. The Spray-Tek project will represent a $30 million investment in Beloit over the next three years.
Major projects hit the city’s development numbers in 2019 and in 2020, which pushed figures to new heights from past years, from the addition of the Amazon fulfillment center, ABC Supply Stadium, and the Lincoln Academy charter school.