Birmingham approves £119 million TIF scheme
Wed 15th August 2012, 3:02 pm
Greater Birmingham and Solihull Local Enterprise Partnership has revealed its plans for the UK's biggest tax increment finance scheme.
The LEP's investment plan for its enterprise zone, made up of 26 sites in Birmingham city centre, has now been approved.
It will see Birmingham City Council undertake around £119.3 million of prudential borrowing to support capital investment for development up to 2018, with receipts from the expected uplift in business rates repaying the loan over 25 years.
Andrew Round, assistant director for planning and development at the council, said: "We have taken the TIF model and applied it to the enterprise zone. We cottoned on very early that the EZ would enable us to do this and have been working on the model for a year."
The bulk of the cash - £61.3 million - will be spent on site development and access at the city's Paradise Circus development. A further £15 million will be spread across the other 25 sites for similar infrastructure work.
The extension of the city's Metro line from Snow Hill to New Street Station will take £25 million, while £18 million will be used to create attractive routes from the city centre to enterprise zone sites at Snowhill, Digbeth, Jewellery Quarter and Eastside.
In addition to the borrowing for capital projects, the investment plan budgets for £8.78 million over the period for revenue projects, which will come directly from business rates as they are collected.
The council estimates that by 2038 the development of those EZ sites benefiting from the initial investment programme will be generating £1.35 billion of GVA each year.
Receipts from business rates paid within the enterprise zones will be exempt from periodic resets, which could take place every 10 years under government reform plans.
Birmingham's TIF borrowing almost equals the £133 million announced by the government for the three ringfenced TIF schemes outside enterprise areas.
The project is due to begin operation in April 2013.
Thu 20th December 2012, 10:21 am
SocInvest's top ten most popular stories during the past year.
Thu 13th December 2012, 10:27 am
SocInvest has updated its intelligence section to help users find documents related to regeneration finance more easily.
Wed 11th July 2012, 9:48 am
The new raft of city deals announced for the UK's core cities provide new ways for private and public sector to work together. Grant Thornton's Phil Woolley and Nathan Good examine the landmark agreements.