Athens City Hall

Athens has created its second tax district designed to give the city a way to recoup what it invests to improve a blighted sections of U.S. 31 North.

City Council members this week gave the go-ahead to create a second tax-increment financing district in the city, this one will include the old Kmart site. Creating the TIF will give the city a way to recoup what it spends to improve the area and make it more appealing to developers.

Among the improvements mentioned in the resolution are a signalized intersection along U.S. 31 North next to Athens Middle School, a roundabout on Pryor Street, sewer improvements between Hobbs Street and U.S. 31, lighting improvements along U.S. 31, and sidewalk and intersection improvements along U.S. 31 North and Elm Street. The council has already given permission for a Publix-anchored shopping center to be built at the old Kmart site.

The council approved the city’s first TIF district in January 2018 at the former Pilgrim’s Pride chicken plant property off Pryor Street. There, city officials are planning a mixed-use development with some green space for a park or some other amenity.

Shane Black, attorney for the city, said the TIF would not increase the property taxes of people living in the district. Under Alabama law, only voters can approve a change in property tax rates. Black said there would be a natural increase in property value inside the TIF district and that the city would use only that increase to pay itself back for public improvements it makes within the district.

In short, property taxes do not automatically increase when a TIF is created, but if property values increase, that generates additional property tax revenue, and that increase is what goes into the TIF fund.