The Downtown Development Authority is seeking a share of sales tax revenue from central Casper, with an annual guarantee of $150,000, to help fund its work.
The agency, which is semi-public, is almost done fundraising for the David Street Station plaza project, and chairman Brandon Daigle said private donors have little left to give.
“If the city does not continue to invest downtown, the private sector’s well is dry,” Daigle said. “We have tapped them out.”
The plaza, which will open this summer, received $3 million from Casper and $1 million from the Wyoming Business Council. An additional $5 million was raised from private donors.
Daigle spoke to Casper City Council on Tuesday and requested “tax increment financing,” or TIF, for the agency.
Under a TIF, the agency would receive 50 percent of any additional sales tax revenue, above a certain benchmark, within a particular zone.
The DDA is composed of roughly 22 blocks bounded by David and Ash streets to the west, Collins Drive to the south, Kimball and Durbin streets to the east and A and C streets to the north.
That zone generated about $20 million in taxable sales this year, according to Daigle.
If Council approves a TIF, any new local sales tax revenue would be split between a special fund for the DDA and the city’s general fund.
For example, if the zone generated an additional $70,000 after the creation of a TIF, Casper would receive the same amount as this year plus $35,000. The other $35,000 would go to the DDA.
A TIF would change only the allocation of tax dollars. The actual tax paid by shoppers in the district would remain the same.
“It’s not a new tax,” Daigle said. “It’s just an increment of an existing tax.”
Any revenue the DDA received from a TIF would be deposited in a fund that Council would retain some authority over.
TIFs expire after a maximum of 25 years.
DDA CEO Kevin Hawley said he would prepare an annual report to Council with a proposal for how to spend any TIF funds.
Daigle said that a TIF would lead to exponential sales tax revenue growth in the area, as DDA would use the additional funding to support business development.
But Daigle also asked Council to approve $150,000 in guaranteed annual funding. That amount would be gradually reduced as the TIF begins generating money for the DDA until it hit zero.
For example, if the DDA received $50,000 from the TIF, the city would contribute $100,000, and if the DDA received $200,000 from the TIF, the city would contribute nothing.
Daigle’s projections show the TIF generating at least $150,000 for the DDA by its fourth year.
The projection also claims that creating a TIF would lead to hundreds of thousands more in tax revenue for Casper than without it.
According to the numbers Daigle presented to Council, Casper will receive enough of this additional revenue that by year eight or nine of the TIF, the $150,000 funding guarantee would effectively be paid back.
Hawley said the DDA first requested a TIF two years ago but was told the timing was wrong.
Councilman Bob Hopkins said this was a good year to impose a TIF because sales tax has been low enough that it has room to grow — and help fund the DDA — in coming years.
“It makes the pie bigger for them quicker, assuming we have a recovery in the oil business,” he said.
Daigle said any funding received from a TIF would go toward staffing, project promotions, development recruit and infrastructure.
City manager V.H. McDonald said that if downtown sales grew in line with DDA projections, the city would be forced to spend more on streets and other maintenance.
“As downtown activity picks up, our costs pick up for patrol, streets wear and tear, things like that,” McDonald said. “If we were capped and we weren’t getting that money... that money won’t pay for street projects.”
Daigle noted that any TIF funds that went to the DDA would be reinvested in downtown projects.
He said the agency is especially interested in improving gateways to downtown for visitors and is looking at installing more public bathrooms.
Councilman Chris Walsh said he supported the TIF, though noted he was less comfortable with the $150,000 guarantee.
“The downtown is turning into a neat place, and it looks to me like it’s going to keep progressing,” he said.
Council agreed to consider the DDA request as it begins the budget process next month for the fiscal year that begins in July.