The City Council was told Tuesday that use of Tax Increment Financing (TIF) is the only feasible method for financing an extension of MLK Boulevard across Riverfront Parkway to the Riverwalk.
Cherita Allen, deputy economic development administrator, said the project is not on the current capital projects list. She said the $6 million the city got from Alstom when it failed to carry out a tax abatement pledge is reserved for workforce job-creating projects.
Ms. Allen said the site is within the 21st Century Waterfront, but she said only $3.2 million in cash reserves are in that fund that is supplied by proceeds from the hotel/motel tax. She said $4.7 million was used for Walnut Street Bridge repairs and $400,000 for the Holmberg Bridge.
She said bond counsel states that the project is so small that it would not be cost effective to issue bonds for it.
Ms. Allen said extending MLK Boulevard (formerly Ninth Street) to the river has been in the planning stages for over a century.
She said it would provide a tree-lined boulevard that would give all citizens access to the river.
Concerning part of the adjacent project by Nashville's Evergreen Real Estate that is already under construction, the council was told that will work to the city's benefit.That will accelerate the pace the city and county can begin getting higher taxes from the four parcels involved, it was stated.
Ms. Allen said TIFs are not just for blighted areas, but that may be the focus of future TIFs.
She said it is anticipated that the TIF will be paid off prior to its 15-year term.
Jermaine Freeman of the economic development department said $500,000 for affordable housing was pulled from the TIF so the project would be scaled back from $4 million to $3.5 million.
He said the county is going to need to retain 65 percent of the tax revenue for debt service and schools, though the city can give up 60 percent of its take.
The remainder will go to the developer to pay off his loan for building the road.
Blythe Bailey, city transportation director, said the city analyzed the developer's cost for building the road and said it appears the developer can do it cheaper than the city could.
The city is paying $2 million for the road right of way and for loss of income from the strip of land.
The City Council is due to vote on approving the TIF next Tuesday.
Ms. Allen said the project cannot go forward unless both the city and county approve it.