Community Redevelopment Agencies: What, When, and How
What is a Community Redevelopment Area or District?
There are currently 178 Community Redevelopment Areas in the State of Florida. The designation is used by Florida cities of all sizes, from Jacksonville and Tampa to Madison and Apalachicola. Many familiar locations, such as Church Street in Orlando, Ybor City in Tampa and the beachfront in Ft. Lauderdale are successful examples of Community Redevelopment Areas.
What is a Community Redevelopment Agency?
What is a Community Redevelopment Plan?
Examples of traditional projects include: streetscapes and roadway improvements, building renovations, new building construction, flood control initiatives, water and sewer improvements, parking lots and garages, neighborhood parks, sidewalks and street tree plantings. The plan can also include redevelopment incentives such as grants and loans for such things as façade improvements, sprinkler system upgrades, signs, and structural improvements. The redevelopment plan is a living document that can be updated to meet the changing needs within the Community Redevelopment Area; however, the boundaries of the area cannot be changed without starting the process from the beginning.
What is Tax Increment Financing?
Tax increment financing is a unique tool available to cities and counties for redevelopment activities. It is used to leverage public funds to promote private sector activity in the targeted area. The dollar value of all real property in the Community Redevelopment Area is determined as of a fixed date, also known as the “frozen value.” Taxing authorities, which contribute to the tax increment, continue to receive property tax revenues based on the frozen value. These frozen value revenues are available for general government purposes. However, any tax revenues from increases in real property value, referred to as “increment,” are deposited into the Community Redevelopment Agency Trust Fund and dedicated to the redevelopment area.
It is important to note that property tax revenue collected by the School Board and any special district are not affected under the tax increment financing process. Further, unlike in some states, Florida taxing entities write a check to the CRA trust fund, after monies are received from the tax collector. In California, the increment is sent to the CRAs directly out of collected county tax revenues, before they are distributed to each taxing entity.
The tax increment revenues can be used immediately, saved for a particular project, or can be bonded to maximize the funds available. Any funds received from a tax increment financing area must be used for specific redevelopment purposes within the targeted area, and not for general government purposes.
How does the CRA Process Work?
A public meeting begins the designation process. Several steps will have to be accomplished before the Community Redevelopment Area becomes are reality. These steps are briefly outlined below.
I. Adopt the Finding of Necessity. This will formally identify the blight conditions within the targeted area and establish the area boundary.
II. Develop and adopt the Community Redevelopment Plan. The plan addresses the unique needs of the targeted area and includes the overall goals for redevelopment in the area, as well as identifying specific projects.
III. Create a Redevelopment Trust Fund. Establishment of the Trust Fund enables the Community Redevelopment Agency to direct the increase in real property tax revenues back into the targeted area.
The Florida Legislature addressed CRAs in 2002 from an intergovernmental point of view, to strengthen the ability of cities and counties to manage CRA creation, notices and term issues. Disputes between cities and counties involving CRAs can be resolved locally by interlocal agreements, and should be, since they usually involve growth management issues other than just funding.
Florida Redevelopment Association Legislative Position
The FRA supports the ability of local governments to create and effectively use community redevelopment agencies to redevelop and revitalize their urban areas. This includes the use of tax increment financing. We further support local control and disposition of any disputes between local governments over the use of such agencies and financing. The Florida Redevelopment Association is available for technical assistance, legislative advocacy and redevelopment educational resources.
For copies of current or past bills, statutes or further legislative information, you may visit www.leg.state.fl.us or call the FRA. at (800) 616-1513 ext. 115.
About the FRA
Summary
CRAs are a specifically focused financing tool for redevelopment. CRA Boards do not establish policy for the city or county - they develop and administer a plan to implement that policy. The CRA acts officially as a body distinct and separate from the governing body, even when it is the same group of people. The CRA has certain powers that the city or county by itself may not do, such as establish tax increment financing, and leverage local public funds with private dollars to make redevelopment happen. The CRA term is limited to 30 years, 40 years if extended. After that time, all revenues (presumably much increased from the start of the CRA) are retained by each taxing entity that contributed to the CRA trust fund.
See Also: Redevelopment Acronyms
Source: Florida Redevelopment Association Web Site (http://www.redevelopment.net/)