After the City of Owensboro activated two separate Tax Increment Financing (TIF) districts for downtown and Gateway Commons last year, City officials announced Tuesday that reimbursement funds will be paid out this year, marking the first time the City of Owensboro will receive return payments from the state of Kentucky.
The downtown TIF contains two incremental areas, also called footprints. The state footprint contains 230 businesses while the local footprint contains 280 businesses.
Angela Hamric, director of finance and support services for the City of Owensboro, said the state does not provide reimbursements toward the local footprints because the larger local footprint is used to pull together a number of capital investments and required a minimum of $20 million to be activated. The area was slightly larger than what the state required, which Hamric said was necessary so that the amount of capital investment needed would be included within the boundaries.
The Gateway TIF district, which encompasses Gateway Commons off of Highway 54, included 65 businesses the city finance department had to reach out to, including various construction companies. All in all, the finance department reached out to 575 different businesses in order to secure reimbursement for the City of Owensboro.
“It was a monumental undertaking for the finance department,” Hamric said.
The TIF reimbursement will be used to pay for state-approved infrastructures, such as the Bluegrass Music Hall of Fame and Museum, Hamric explained. The state will reimburse Owensboro $24.5 million for the downtown TIF district and another $20 million for the Gateway TIF district, 20 percent of which will go into the City’s general fund.
The next step for the finance department will be formally requesting reimbursements from the state. Three different state departments will assess the reports turned in by Hamric and her team, including the property tax, withholding tax and sales tax divisions.
After an expected deliberation period and additional contact has been made with each and every one of the 575 businesses included in the two TIF districts, the City of Owensboro should expect the reimbursements to be paid out before the end of the year.
Although city officials were happy for the TIFs’ outcome, City Manager Nate Pagan also acknowledged the City’s finance department for their hard work and organized efforts in what officials called “an arduous task.”
Hamric echoed Pagan’s description in her own words.
“It was tedious, and it was a lot of work,” Hamric said. “It was a whole lot of mailings, phone calls, assisting with form preparation, online research trying to find contacts and information — hours upon hours to get where we are. But I’m happy to say we have successfully pulled together this massive amount of information required of the state for us to submit for reimbursement.”
Hamric recognized two of her colleagues, Dane’ Galloway and Whitney Brown, for their combined efforts along the way. Hamric added that a project like the one her team had undergone required the “utmost organizational and tracking skills.”