The Marion Board of Aldermen began the process of seeking a Tax Increment Financing bond Tuesday as town officials work to bring a grocery store to the town.

 

Mayor Larry Gill said TIF bonds are a type of incentive where the town reimburses a business for some of the costs for the public infrastructure, such as water and sewer lines, sidewalks and roads, that is built along with the development. The bond, which is borrowed funds, is then paid back using tax revenue generated from that new business.

 

“Say they need $500,000 to help with some infrastructure needs,” he said. “We give them the $500,000 through a bond, and we pay it back through the tax.”

 

Gill said the first step in the process is an in-depth analysis of the proposed grocery store to generate preliminary data about what potential revenue could be generated by the new business. Once the town has some numbers to work with, he said, aldermen can decide how much they are willing to tie up in debt service to pay back the TIF bond.

 

“Basically you’re letting them borrow money on the tax revenue they’re going to be bringing in, and we’re just paying the bill while they pay their taxes,” Alderman Stacy Blalock said.

 

With the TIF bond process, the town also has some safeguards in place to make sure taxpayers’ money is protected, Gill said. The grocery store will have to be open for at least several months and show revenue consistent with the analysis before the town hands over the funds.

 

“We’ve got to actually see that it’s making what it’s making before we issue the bonds,” he said.

 

Aldermen voted Tuesday to engage Butler Snow to assist with the TIF bond process. The Jackson-based law firm has handled previous bond issues for the town, as well as the City of Meridian and many other communities throughout the state.

 

Gill said there is also an opportunity for Lauderdale County to get involved with the TIF bond as it will receive a portion of the property taxes generated by the grocery store. That decision will be up to the Board of Supervisors.

 

In other business, Gill said the town on Monday closed on the purchase of property directly east of Town Hall. The property, which has several old homes and some trees, will need to be cleared before it becomes usable, he said, and that request will be coming before the Board of Aldermen in the future.

 

Clearing the property, however, will create a large open space, Gill said, and some thought needs to go into how best to move forward to avoid a negative aesthetic.