Community Redevelopment Agency: How It's Supposed to Work
Last updated 5/26/2020 at 3:23pm
This is the second installment in the Lake Wales Renaissance series. Robin Gibson is a city commissioner and deputy mayor, who chairs the Lake Wales Community Redevelopment Agency.A Community Redevelopment Agency (CRA) is a proven commodity adopted in 44 states and over 220 areas in Florida. CRAs can be the vehicle for spectacular success or they can be badly abused. Succeeding articles will cover Lake Wales' history of CRA mistakes, lessons learned, and the way we can turn those lessons into the basis for success.
First, how the CRA is supposed to work:
Purpose. A CRA has been given by Florida law some special tools for bringing back declining commercial and residential areas to enable them to reach their highest and best uses for the benefit of the community as a whole.
Governance. The CRA is created by the City Commission as a "legal entity, separate, distinct, and independent from the governing body of the municipality" to carry out its redevelopment purpose. A CRA has its own 5-7-member board to direct the agency. The board can either be appointed by the City Commission or the Commission may designate itself as the CRA board. The CRA must adopt a Community Redevelopment Plan that addresses the unique needs of the targeted areas, as well as identifying the types of projects planned for the areas. The CRA may not do anything that is outside the scope of the Plan.
Tools. The most important tool in the box is a CRA's unique method for funding its projects, known as Tax Increment Financing. It starts by fixing the value of property in the CRA district as of the date the CRA starts its business. If the CRA's redevelopment is beneficial, its acceptance in the market will cause CRA property values to increase. The resulting increase in tax revenue from both the City and County (increment) is deposited into a CRA Trust Fund for use with further redevelopment.
NOTE: 1) the whole thing is keyed to increase in property values, and 2) the County makes a significant contribution by writing a check to the CRA for what would normally stay with the County.
The Trust Fund can only be used for redevelopment purposes, and cannot be used "for general government operating expenses unrelated to carrying out the CRA plan." In other words, the City may not use the Trust Fund as its own cookie jar.
Other tools enable the CRA to: partner with private enterprise, purchase and sell property, attach redevelopment conditions to property it sells, borrow and lend money, zone and rezone property, apply for and accept grants and financial assistance, and more.
The next articles will focus on lessons learned from the Longleaf Business Park and Walesbilt Hotel sagas, and how we can use those lessons to make better decisions for success going forward.