Community Redevelopment Agencies (CRAs) play an important role in the partnership between the city, the county, the state and the federal levels of government in addressing the needs of communities. They are created at the local level by either the city or the county. The plans that are developed to oversee how the funds are spent, and on which projects, are also created at the local level. The redevelopment plan is created through a series of community meetings, public hearings and is also reviewed by the planning agency. That way, each plan is unique and is developed individually to increase the value of the area.
One key thing to understand is the revenue that is being generated that the CRAs are using is locally-generated revenue. This tax increment financing (TIF) is a CRA’s primary financing tool and when investing this money, the CRA will follow the same principles used in the private sector. As a CRA goes in and invests the money in an area, it puts in infrastructure, and the value that is created from that is then used to repay the original investment. CRAs are based on the idea of a return on investment that is used to actually fund the improvements they are making. Central to all plans is the idea that the CRA will create an increase in value to sustain reinvestment.
The base value is established when the CRA is created. The increase in taxable value that is generated because of the improvements and increases in value is then reinvested back into that CRA area. It does not involve state or federal money nor do all taxing authorities contribute to the TIF. For example, school boards, water management and fire districts all enjoy the benefit of increased property values, but they do not contribute any TIF to the CRA.
A CRA can add a critical element to what a city or county can do. A typical project can involve the stacking of revenue from local, state and federal sources. The beauty of a CRA from a redevelopment concern is that there will be a continued and sustained level of investment in that particular community. That offers a great deal of support when you are asking the private sector to make an investment in an area that typically has suffered from disinvestment.
Click the button below to see how Fort Myers CRA helped our community in 2016: