Community Redevelopment Agencies: What, When and How
CRA’s, as they are known, are quite common but often there are many questions in the minds of those who don’t work with them everyday. How are they authorized? Who oversees them? What is involved in their operation? How are they funded? Following is information intended to answer these questions.
What is a Community Redevelopment Area or District?
Under Florida law (Chapter 163, Part III), local governments are able to designate areas as Community Redevelopment Areas when certain conditions exist. Examples of conditions include, but are not limited to: the presence of substandard or inadequate structures, higher crime rates than surrounding areas, inadequate infrastructure, insufficient roadways, deterioration of site or other improvements, and inadequate parking. To document that the required conditions exist, the local government must survey the proposed redevelopment area and prepare a Finding of Necessity. If the Finding of Necessity determines that the required conditions exist, the local government may create a Community Redevelopment Area to provide the roles needed to foster and support redevelopment of the targeted area.
What is a Community Redevelopment Agency?
The activities and programs offered within a Community Redevelopment Area are administered by the Community Redevelopment Agency. The Lake County Board of County Commissioners will serve as the Community Development Agency, and a CRA Advisory Board comprised of residents and/or owners of businesses within the CRA will advise the CRA Agency regarding priorities, activities to be undertaken within the CRA, and amendments (as needed) to the CRA redevelopment plan.
What is a Community Redevelopment Plan?
The Community Redevelopment Agency is responsible for developing and implementing the Community Redevelopment Plan which addresses the unique needs of the targeted area. The plan includes the overall goals for redevelopment in the area, as well as identifying the types of projects planned for the area.
Examples of traditional projects include: streetscapes, sidewalks, street tree plantings and roadway improvements, community facilities, building renovations, public parking lots, neighborhood parks, trails and trailheads. The plan can also include redevelopment incentives such as grants and loans for such things as façade improvements, signage and structural improvements. Any projects funded with Redevelopment Trust Fund revenue must be identified in the redevelopment plan.
The redevelopment plan is a living document that can be updated to meet a community’s changing needs. However, the boundaries of the CRA cannot be changed without starting the process from the beginning.
What is Tax Increment Financing?
Tax increment financing is a unique tool available to cities and counties to fund redevelopment activities. It is used to leverage public funds to promote private sector investment in the targeted area. The dollar value of all real property in the Community Redevelopment Area is determined as of a fixed date. This is known as the “frozen value”. Taxing authorities, which contribute to the tax increment, continue to receive property tax revenues based on the frozen value. These frozen values remain available for general governmental purposes. However, any CRA tax revenues from increases in real property values, referred to as “increment”, are deposited into the Community Redevelopment Agency Trust Fund and dedicated to the redevelopment area.
It is important to note that property tax revenue collected by the School Board and any special districts are not affected under the tax increment financing process. Florida taxing entities write a check to the CRA trust fund, after monies are received from the Tax Collector. Any funds received from a tax increment financing area must be used for specific redevelopment purposes within the target area, and not for general governmental purposes.
CRA’s are a specifically focused financing tool for redevelopment. CRA’s do not increase tax rates. CRA’s do not change zoning or land uses. The CRA acts officially as a body distinct and separate from the governing body, even when it is the same group of people. The CRA is term limited to 40 years or less as established by governing body.