If things go as planned, Farmington could soon get a major retail shopping complex including a Target, Home Depot, large nationally-recognized grocery store and numerous restaurants and smaller retail shops and service businesses. &#8220Farmington Crossing” is slated to be built west of U.S. 67 just north of Maple Street.
The proposed development seemingly has the support of Farmington Mayor Charles Rorex. The mayor released a press release Tuesday outlining his involvement with the project so far.
&#8220It’s clear that a number of high-profile businesses are interested in the west side development,” Rorex said. &#8220According to figures that have been provided to me, there may be as many as a thousand new jobs involved. Obviously, the sales tax revenues would also be very substantial for the community.
&#8220And we’re looking at as much as $81 million in new construction,” he added.
Plans call for a roughly 50-acre development west of U.S. 67 and north of Maple Street which would include a 570,000-square-foot complex. Developing the center would require use of Tax Increment Financing funding. TIF districts are established to use a portion of new tax revenue generated within a specified area to help pay for improvements to the area to foster new growth in a community.
TIF funds are used only for projects within a pre-determined TIF district. Likewise, funding to pay for TIF-based improvements comes only from tax revenue generated within the localized district – and does not come out of the city’s general fund.
As with other large developments throughout the nation, realization of the new development is likely dependent on adoption of a workable TIF agreement, Rorex said.
The area in question is already part of a pre-established TIF district approved last year. The TIF commission has been reconvened in recent weeks to start working through the process of amending the projected cost and future profits of the TIF district since the &#8220Farmington Crossing” development was not part of the initial TIF plan in 2005. Both costs and potential profits are significantly higher than the numbers set down in the original TIF agreement.
That requires that the initial TIF district plan be amended.
&#8220In order to make this development a reality, folks in this area need to express their support for bringing these businesses to Farmington. I have taken this project as far along as I possibly can without further support from the city council and community at large,” Rorex concluded.
It was originally estimated the retail outlet could start generating as much as $1,091,370 annually in new sales tax revenue for the city within a couple years. For the first 23 years an additional equal amount would go into the TIF district fund to offset infrastructure and development improvements needed to build the center.
TIF funds are being asked for by the developer, Koman Development, Inc., to assist in getting the proposed shopping built. The dollars would be recouped in the form of a portion of the future sales tax revenues generated only within the TIF district boundaries for a period of 23 years.
As a matter of explanation, it’s been estimated the complex would, after a few short years of growth, bring in $145,516,425 in retail sales. Under the agreement, half of all new sales tax revenue growth from that particular development for a period of 23 years would be given to the city. The remaining half during that time would be part of the TIF agreement and repay the development costs involved in building the center, as mentioned previously. And after the 23 years the TIF agreement would go away and the city would receive the full sales tax revenue amount it was entitled to.
During the life of the TIF, the other taxing entities would receive their proper amounts as a &#8220pass through” of funds to those taxing entities – ambulance district, school district, etc.
Using the city’s current sales tax rate, the city would stand to make an additional $1,091,370 in new sales tax revenue per year once the center was built and up to complete operations. The other $1,091,370 annually for the first 23 years would pay for development costs. At the end of the life of the TIF agreement, in 23 years, the city’s sales tax portion would be $2,182,740 annually if the development in fact brought in $145,516,425 as anticipated by the developers.
The TIF commission met on May 9 to start the process of amending the TIF plan.
It’s likely that if the retail development was to eventually be approved by the council construction could start as early as 2007.