Urban improvement districts exist to help neighborhoods redevelop and, via that fresh coat of paint, reclaim their value. They can have different names, sometimes leading with words such as “community” or “business,” but whether it’s a UID, CID or BID, improvement is always the over-arching goal. Another name is Special Assessment District, which despite its unfortunate acronym can mean many happy returns for residents and businesses alike.
Such districts usually are backed by contributions from area businesses and/or tax-exempt bonds, a key source of community development finance. The Council of Development Finance Agencies (CDFA) has long advocated for communities doing just that, and in its 2017 policy agenda release early this year sounded the call again:
“Tax-exempt bonds are a federally authorized development finance tool that helps stimulate public and private investment in a wide variety of economic sectors,” said the CDFA. “Three-quarters of the total United States investment in infrastructure is accomplished with tax-exempt bonds, which are issued by over 50,000 state and local governments and authorities, representing a $3-trillion industry. Tax-exempt bonds have served as the primary financing mechanism for public infrastructure and have been exempt from federal tax — just as federal debt is exempt from state and local tax — for more than a century. Attempts to curb or repeal the municipal exemption would dramatically increase the cost of infrastructure projects to the detriment of the public who will have to bear those increases, and undermine the efforts of America’s state and local governments to move their communities forward.”
As part of comprehensive tax reform under consideration by Congress and the new presidential administration, CDFA has two recommendations:
Urban improvement districts often are central to the success stories that characterize winners of the CDFA Excellence in Development Finance Awards, most recently announced in October 2016. Among the winners was the Suitland-Naylor Road Development District in the DC-area community of Prince George’s County, Maryland. “The Revenue Authority of Prince George’s County closed a $28-million bond transaction using tax increment financing to raise the funds necessary to purchase land for purposes of kick-starting development in an 1,800-acre [728-hectare] Development District” containing two Metrorail stops and the Suitland Federal Center, which employs some 8,000 employees.
New Ideas in Newark
Newark, New Jersey, is home to the Newark Downtown District (NDD), which in turn is home to the 400,000-sq.-ft. (37,160-sq.-m.) Teachers Village development.
The community targeting educational professionals is located within the boundaries of a special improvement district operated by the Newark Downtown District (NDD). The NDD’s services include improving and maintaining streetscape amenities and horticultural plantings, a “clean and green” program, installation and maintenance of a pedestrian wayfinding signage system, security services, an ambassadors program and hosting of a variety of programs and events such as a seasonal farmers market and a downtown walkers club.
Within walking distance of five universities, Teachers Village was developed by RBH Group and its six buildings are being designed by KSS Architects. The development seeks to connect the city’s downtown arts district to the University Heights district, and includes more than 200 residential units marketed to teachers, three new charter schools and enough retail space for 20 businesses. According to RBH, the development has secured over 20 separate board decisions to finance and entitle the project, and received one of the largest residential Urban Transit Hub Tax Credit allocations in the State of New Jersey.
“Outreach to the universities as well as to leading corporate and institutional entities such as Audible.com, Panasonic, Prudential, PSE&G, Verizon, and area science and business incubators will enable Teachers Village to generate ideas and social capital within the community,” say the developers, “and most importantly, to inspire its students and teachers to learn and earn the skills necessary for the 21st century.”
Adam Bruns has served as managing editor of Site Selection magazine since February 2002. In the course of reporting hundreds of stories for Site Selection, Adam has visited companies and communities around the globe. A St. Louis native who grew up in the Kansas City suburbs, Adam is a 1986 alumnus of Knox College, and resided in Chicago; Midcoast Maine; Savannah, Georgia; and Lexington, Kentucky, before settling in the Greater Atlanta community of Peachtree Corners, where he lives with his wife and daughter.