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W.Va. OKs Martinsburg's request for Tax Increment Financing District

September 23, 2008|By MATTHEW UMSTEAD

MARTINSBURG, W.Va. -- A key part of Martinsburg's financing plan to relieve traffic congestion in the city's northern end was approved by the West Virginia Development Office, Martinsburg Mayor George Karos announced Monday.

The city was notified via fax late Friday afternoon of the state's decision, which empowers officials to channel tax money generated from development near the Raleigh Street extension project to help pay for the north-south connector into downtown Martinsburg, City Manager Mark Baldwin said.

State approval of the city's request to create a Tax Increment Financing (TIF) district for the city's north end allows the city to move forward with a plan to adopt an ordinance to formally establish the district and the project plan, Baldwin said.

"The city will not consider issuing bonds (for the Raleigh Street project and other infrastructure needs) until we're sure there's going to be economic development" in the TIF district to support repayment of the bonds, Baldwin said.

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"It's a two-way street," Baldwin said of needed private sector economic development to spur the infrastructure improvements.

As proposed, bonds would be issued to help pay for the Raleigh Street extension, along with improvements to other roads in the TIF district, including Lutz Avenue, Meridian Parkway, Court House Drive and Forbes Drive, and water, sewer and other utility needs for development.

The additional tax money generated by development in the city's TIF district would be committed to paying off as much as $20 million in bonds that the state allowed to be issued for the project.

The city is proposing an issue of $14.2 million in bonds, with $9.6 million going toward infrastructure in a district comprised of 37 pieces of property in northern Martinsburg.

Thomas Burke of Mid-States Financial Group said the timing of the state's approval couldn't have been better, but acknowledged the national economy has squeezed his and partnering developers' plans to develop Meridian Pointe, a 54-acre project that has been billed as a new northern gateway for the city.

Burke said he still intends to build Class A office space, but admitted it will take a lot of prelease activity to move the project forward and some amount of time for the market to absorb an overabundance of housing.

Even with the slowdown, Burke said he has spoken with hotel companies and retailers who have approached him about locating in the TIF district, which he remains "very excited to be part of."

"I'm ever the optimist," Burke said of his belief that the economy will improve in the months ahead.

Projected to cost $32.5 million as of February 2007, the Raleigh Street extension is being designed by the West Virginia Division of Highways and that phase of the work is expected to be done by next year, Baldwin has said.

The concept for the extension includes upgrades to traffic signals at Raleigh Street's intersections downtown and bridges over two railroad company's lines that pass through the city, Baldwin said. Portions of the extension are expected to be two and three lanes, with the possibility of additional turn lanes at the junction with Edwin Miller Boulevard. Built as a 25-mph street, officials expect it to improve emergency response as well as alleviate notorious congestion along North Queen Street.

What is a TIF?



Tax Increment Financing is a tool that banks on future gains in taxes to pay for current improvements that will create the gains in revenue. TIF is designed to channel funding toward improvements in distressed or underdeveloped areas where development might not otherwise happen. TIF creates funding for public projects that might otherwise be unaffordable.

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