AUBURN — A partial tax incentive plan for a south Auburn industrial park won City Council approval Monday.
Councilors voted unanimously to approve a Tax Increment Finance district for Hartt Transportation’s $5.3 million facility.
“I support it because I think this is the first time the council has supported a 40 percent/60 percent split, and that means money will go into the general fund to help pay for services,” Councilor Tizz Crowley said.
The development calls for office space, a maintenance facility and an automated commercial truck wash and the surrounding park off Kitty Hawk Road.
Hartt Transportation’s project includes $1.2 million in new roads in the Kitty Hawk Business Park, including work extending utilities, high-speed fiber-optic Internet service and the paved section of First Flight Drive. Work on that development began in August.
“Our investment here in Auburn has not been taken lightly,” Joanna Bradeen, chief financial officer for Hartt, said.
The company purchased the property in 2007.
“But the economy really fell apart after that and this felt like kind of a white elephant sitting on our shoulders,” Bradeen said. “After some failed attempts and putting some money out there, it became clear to us that we could not do this ourselves.”
According to the TIF agreement, Hartt would continue to pay all taxes on the current $1.2 million value of the land. The first 40 percent of new taxes paid would go back to Hartt to pay for extending the utilities and other site work.
TIF districts allow cities to hide new developments from the state’s property valuations. State valuations determine how much aid to the schools and revenue sharing a community can get: Higher property values mean a city gets less help from the state.
When a city creates a TIF district, it sets a baseline value on all property within the district’s borders. Property owners continue to pay property taxes on that baseline value.
Taxes based on the new — or incremental — construction can be given back to the developer as an incentive or can be put into a special city account and earmarked for certain purposes, such as economic development. Councilors decide how much of that incremental tax revenue is set aside and how it can be used when they first create the TIF district.
Economic Development Director Roland Miller said the company won’t get any rebates until new developments go up on the land.
“It will be up to them to market and attract new investors to this area,” Miller said.