Hoping to boost Minden’s economy, the Minden City Council will consider increasing the sales tax in the newly created Tax Increment Financing Districts as a means of funding for the sectors.
The districts, which are made up of commercial property, were approved at the October Minden City Council meeting. The next step is to levy sales and occupancy taxes in the four new districts.
The additional two-cent tax will be charged at businesses in the TIF districts, which will stay in the district it was collected and used to fund projects and fund incentives to help lure business.
“This will help attract new investors from outside our area, as well as offer incentives to property owners and existing businesses,” Economic Developer James Graham said. “Not only are we nearly the only small size city to implement a program like this, but we are the only one to demand that TIF fund support Minden jobs for Minden people. If a business receives TIF funds, they must employ people who live in Minden.”
Thomas Adams, owner of Main St. Barber Shop and Her’s Bridal with wife Alicia, opted out of being included in the downtown TIF district.
“While being part of the TIF district may be beneficial to some businesses, I could not justify passing on an additional 2 percent tax to my customers,” Adams said. “That would have increased sales tax at my business to 12.5 percent, just so I can contribute to a fund to help restore my building. It didn’t make since for my business, but TIFs may assist other entrepreneurs.”
If the council members approve the resolutions at its November meeting, consumers will pay a sales tax of 12.5 percent at businesses located within the districts across town. Visitors who stay in hotels in the districts will pay 16.5 percent beginning in January 2017.
The Webster Parish Convention and Visitors Bureau partnered with the City of Minden in support of creating TIF districts.
Lynn Dorsey, Webster CVB Executive Director, said the board agreed to pay legal fees for the creation of TIF districts.
“We felt like it was an investment in our future,” she said.
The Webster CVB generates revenue from an hotel/motel occupancy tax of 4 percent, which is then distributed through grants in Webster Parish to attract tourist and market the area.
“Although there are no current hotels in the TIF districts, the hope is an investor will build a hotel within a district. The investor would have a 2 percent tax returned to them, while tourism then has additional rooms generating funds through the existing 4 percent occupancy tax dedicated to tourism. It is a win for the investor and for tourism.”
Dorsey said the current occupancy rate for Webster parish has remained steady, but more hotels are needed to grow.
“I get calls from tour buses, conventions, and so forth asking us to help them block 40 or more rooms,” she said. “But at this time, our hotels are not sufficient to accomplish that. The need is here. Hopefully it will be built and they will come.”
Graham said he met with business owners in the district to get their feedback and support before moving forward with the program.
“Within those boundaries there are properties for sale and these incentives are tied to the properties,” he explained. “It makes all the world of difference when trying to grow an area.”
Graham said Minden’s current population is near 13,000 and needs to rise to 20,000 before major retailers would be interested in locating in the area.
Minden-South Webster Chamber of Commerce has been following the development of TIF districts closely.
“We realize Tax Increment Financing can be an effective economic development tool that has the ability to entice new businesses and assist our existing businesses within each district,” Stephanie Barnette, chamber president said. “The chamber board will continue discussion on this topic and will work with the City to help keep local businesses informed.”
Graham feels local shoppers’ pocket books will not see effects of the 2 percent sales tax increase, which are only imposed on businesses in a TIF district, but will see the positive affects on the local economy.
“Everyone has been supportive of this,” Graham said. “It’s not normal for Minden-size cities to have these incentives. We should be thankful Minden is wise enough to see benefits of TIF districts, and that Minden is not looking in the rearview mirror.”
