November 1, 2005-- Posted at 10:17 PM CST
JONESBORO--It's been over a year since the tax increment financing or 'T.I.F. tax' was approved for the Mall at Turtle Creek. Since the City of Jonesboro's approval of the tax, the mall has exploded in growth and in business. Developers of the mall say the T.I.F. tax helped spark a booming business in the region. But opponents of the tax say it takes money away from schools to help pay for private development.
It was a dream; a lifestyle enclosed mall in Jonesboro. It was the dream of Bruce Burrow. But how was he going to pay for it? His company asked the City of Jonesboro in 2004 to form a Turtle Creek Development District in order to use tax-increment financing or T.I.F to pay for the infrastructure. Because the district was allowed to issue its own bonds, 5 of the 30.0 mills the district would pay to the Jonesboro School District annually were instead used for the diverting of Turtle Creek, ditches, culverts and road work; all totaling $7 million.
That's a price that investment banker for Bruce Burrow, Bob Wright says was well worth it.
"It is generating a quite a bit more money for the school district to pay off their debt, than it currently would have been without the project," said Wright.
But what does that really mean. Right now the assessed value of the property is $281,100. This year the area will pay $11,069 in taxes. After completion, the value of the mall will be assessed at $21.7 million, generating $772,000 in property tax alone.
At that point repayment of the bond will start taking away $660,000 of that $772,000 dollars. The City of Jonesboro gets the rest. It may sound like Jonesboro gets the short end of the stick, but as Bob Wright told the Jonesboro City Council Tuesday night, it will be well worth it.
Wright said, "Without the ability to divert that ($660,000) to pay for the debt which allowed the project to go forward and especially at this size. Yes we are diverting $660,000, but it is generating $2.25 million in sales tax alone."