Blog: City Blog

Measuring Progress: Story Maps Document TIFs, PILOTs as Successful Redevelopment Tools

Before: The former J.C. Penney building, 412 S. Gay St., at its low point.

The J.C. Penney Building, after an estimated $10 million in private investment, houses two restaurants, a basement bowling alley and 17 residences.

After: The same building, after an estimated $10 million in private investment, now houses two restaurants, a basement bowling alley and 17 residences.

Not many years ago, the former J.C. Penney Building on South Gay Street was a 60,000-square-foot hulking ruin. It was vacant, falling apart, with water running freely through a gaping hole in the roof.

A redevelopment team that included David Dewhirst, Mark Heinz, Mike Hatcher and Tim Hill envisioned bringing the former department store back into grand reuse as a residential, restaurant and entertainment nexis. But the redevelopment costs were too steep to make it a viable project - that is, until 2012, when City Council and County Commission authorized a 20-year Tax Increment Financing (TIF) package that closed the financing gap.

The project is one of 46 made possible by the City's judicious use of two redevelopment tools - TIFs and Payment in Lieu of Taxes (PILOT) assistance. TIFs and PILOTS have made undoable projects financially feasible by closing the redevelopment financing gaps that would have otherwise stopped the projects.

Seeing is believing. Want a quick, easy-to-use digital guide that documents how and where TIFs and PILOTs have been used by the City of Knoxville and that illustrates all the projects now underway?

Click HERE and find two story maps, created by Bryan Berry, a project manager in the City's Office of Redevelopment.

Exploring the story maps, a visitor to the City's webpage can find details explaining how TIFs and PILOTs work, the City's guidelines and procedures, and an application form. Anyone using the story maps also can see the specifics on where past PILOTs and TIFs have been used - thumbnails on each project, the number of years that the TIF or PILOT is in effect, and the "before" and estimated "after" value of the properties.

Bill Lyons, Deputy to Mayor Madeline Rogero and the City's Chief Policy Officer, says the TIF and PILOT tools have been wisely used. The public benefit is clear, he says.

Not only will the projects collectively generate about $5 million more in City of Knoxville and Knox County taxes each year, once the time periods of the projects' TIFs and PILOTs expire, but the transformation of so many blighted, empty buildings has accelerated downtown's momentum and created a sense of vibrancy. New amenities like restaurants and entertainment venues are helping to drive a doubling of the number of people residing downtown. And the new businesses have created hundreds of new jobs.

The appraised value of projects before receiving PILOT assistance was $26.9 million, Lyons said. Once the redeveloped projects are complete, the estimated appraised value will be $185.6 million - nearly a seven-fold increase.

The economic effect of TIFs is even more dramatic. Before the TIFs were approved to close financing gaps and allow the two-dozen projects to happen, the appraised value of those properties was $11.3 million. Once the projects are finished, their estimated appraised value will be $248.7 million.

Please click HERE to learn more about TIFs and PILOTs, and to see how they've been used to generate jobs and add vitality throughout downtown Knoxville and in different sections of the city.

Posted by evreeland On 27 June, 2016 at 3:38 PM