Majority of North Platte Homes Now Eligible for ‘microTIF’ Incentives | Regional government

TODD ​​VON KAMPEN North Platte Telegraph

NORTH PLATTE – “MicroTIF”, the program born in Nebraska’s North Platte to repair aging non-metro buildings, is about to take on a much wider reach.

After the 2020 revisions to the law, nearly 60% of all homes in North Platte could benefit from microTIF if their owners wanted it, according to a Telegraph analysis.

Although most of these homes are in the historic heart of the city – north and south of the Union Pacific tracks – they are located throughout the city.

Like “ordinary” tax increment financing, the microTIF allows owners of buildings that are at least 60 years old to gradually recover property taxes related to increases in value resulting from their repair, renovation or of their reconstruction.

A bill (LB1065) passed in the recent legislative session increases the maximum allowable taxable value of microTIF after the draft from $250,000 to $350,000 for older single-family homes and from $1 million to $1.5 million dollars for multi-family or commercial buildings.

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This makes every North Platte home built in 1962 or earlier potentially eligible for microTIF property tax refunds. None of those homes had a 2021 assessed value greater than $330,285, according to records from the Lincoln County Assessor’s office.

LB1065 also extends microTIF to long-plateau vacant lots and allows cities to survey large areas for TIF eligibility, but declare as few as a single house or lot at a time as “substandard”. and degraded” to allow the use of microTIF.

The follow-up bill goes into effect this month.

While a handful of Nebraska cities have adopted the program, North Platte — whose former state senator Mike Groene designed the microTIF in 2020 — has only approved three projects.

But LB1065 incorporates a suggestion from some North Platte City Council members to let cities identify small microTIF areas to avoid labeling large swaths of their cities “substandard and degraded” for regular TIF.

Groene, who won final senator approval 49-0 for his original bill in 2020, introduced LB1065 and essentially agreed to its final form before his Feb. 21 resignation as senator for District 42.

Omaha Sen. Justin Wayne, chair of the Urban Affairs Committee and co-sponsor of Groene’s 2020 microTIF, took over as title sponsor of LB1065. He and Groene’s successor, Sen. Mike Jacobson, guided him to final approval 46-1.

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Mayor Brandon Kelliher said city officials will soon initiate the necessary formal study to find out if North Platte’s older neighborhoods meet the state’s legal standard for TIF and microTIF.

This is probably unavoidable, as the prevalence of buildings that are at least 40 years old has long been a determining factor in determining whether an area qualifies as ‘substandard and degraded’.

But true to the board’s suggestion that was incorporated into LB1065, Kelliher said, board approval of such a broad TIF eligibility study would not be followed by application of that label to the whole of the study area.

Instead, the council — which must legally approve microTIF applications that meet the program’s standards — would apply the “substandard and degraded” label to a microTIF property only when it approves its microTIF application.

No more than 35% of land within city limits can be “substandard and degraded” in cities the size of North Platte.

No single-family homeowners applied for the microTIF, although an upper-floor apartment project in the Canteen District and two renovation projects in a former downtown commercial building were approved for the incentives. .

Kelliher strongly encouraged owners of older properties interested in microTIF to first consult with the county assessor’s office before deciding whether or not to apply for the incentives.

Owners need to be sure they think the potential microTIF incentives are worth it before deciding to seek the refunds, Kelliher said.

“You could take a house that’s worth $120,000 and fix the bathrooms and the kitchen and spend $40,000 to $50,000 to do it, but you’d still have a two-bedroom house and it might not change much. evaluation,” he said. “Your microTIF benefit would then be low.”

On the plus side, he said, “what you sell your home for may be different” after doing such a remodel. “But that’s not what the assessor’s assessment is.”

He said higher microTIF gains are more likely if the owner of a qualifying property would gut and rebuild an older home, tear it down and replace it — as the law already allowed — or decide to buy and build on a long vacant lot. .

LB1065 made these lots eligible for microTIF benefits for building on it, provided the lot has been flat and within the city limits for at least 60 years.

If a microTIF property “goes from $10,000 to $280,000 (in appraisal), then you could have a substantial amount coming back on an annual basis,” Kelliher said.

Future owners could also get some of those refunds, he said. The law states that microTIF refunds remain with the property if a project’s expected total refunds have not been fully paid before it is sold.

LB1065 increases the maximum microTIF-related property tax clawback period from 10 years to the 15-year maximum that applies to ordinary TIF.

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