THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: THURSDAY, June 2, 1994 TAG: 9406020491
SECTION: LOCAL PAGE: D4 EDITION: FINAL
SOURCE: BY MAC DANIEL, STAFF WRITER
DATELINE: 940602 LENGTH: SUFFOLK
On a unanimous vote, the council created a special taxing district for the development. The council will take another vote June 15 to approve spending about $4 million on the project.
{REST} Former Mayor Andrew Damiani said the council should make the entire Harbour View development into a special taxing district to help pay for future services.
``Do it now,'' he told the council. ``Do it before Harbour View gets developed.''
The partnership between Harbour View and the city has been in the making for several years.
Before revamping the partnership plans, Suffolk was to become home to Virginia's first ``tax-increment financing'' district. The council approved creating the district last December on a 5-2 vote.
Under that plan, the city would pay for and build roads, sewer and water lines in the private development. As businesses moved to the development in northern Suffolk, the city would use money from increased real estate tax revenue to pay its debt.
Under the plan approved by the council on Wednesday, Suffolk still creates a taxing district and uses city money to build roads, sewer and water lines. But the city now plans to pay off its debt by charging businesses within the district a special tax in addition to the normal real estate tax. This special tax will be increased or decreased over the years, depending on how much revenue is needed to pay off the bond debt.
``This is a much better mechanism,'' Mayor S. Chris Jones said.
Harbour View has long been touted by Suffolk officials as a key to the economic future of the city. But the 2,000-acre residential, commercial and industrial development has been slow to grow. None of the commercial or industrial sections have been developed.
The old plan was scrapped after some council members said the tax-increment financing plan was too financially risky and depended too much on guarantees from the developers of Harbour View.
The revamped private-public partnership gives Suffolk more control over the project, city officials said. The new plan also does not rely on any guarantees from developers.
The new plan cuts the amount of money used in the project. Developers originally asked for $10.5million in improvements. The plan now calls for $3.6 million to $4 million in improvements.
{KEYWORDS} SUFFOLK CITY COUNCIL HARBOUR VIEW DEVELOPMENT
by CNB