First printed in the Lincoln Sentinel on March 3, 2016
There are several different business and property development assistance programs that have been in the county for a number of years. Because they came along before I began working at the economic development foundation, I am unsure if these programs are common knowledge, buried deep in the back of people’s minds, or completely forgotten by now. So I thought I would take a minute to go over one of the simpler programs someone looking to invest in their property could tap into, the Neighborhood Revitalization Program (NRP).
At its core, the NRP is a property tax rebate program to property owners who make improvements to either their residential or commercial properties within the city limits of Lincoln or Sylvan Grove. Eligible improvement projects include new construction, rehabilitation, renovation, and/or alterations of either residential or commercial structures. Projects not eligible are accessory structures like garages or storage buildings, site improvements like swimming pools, or structures used for public utility or railroad purposes.
If you or someone you know has a project in mind, here’s a brief checklist of criteria the project must meet (there are a few others but these are the biggies):
- Will the minimum investment in the improvement be $20,000 (for Lincoln) or $15,000 (for Sylvan Grove)?
- Will the minimum investment in the improvements increase the property’s assessed valuation by 20%?
- Will you file the NRP application with the city clerk 60 days before the project begins? (The NRP application is available on the LiveLincolnCounty.com website under Work > Business Incentives if you want to check it out.)
- Will the project be completed within 24 months after the application has been filed with the city clerk?
- Are you current on the property’s taxes? (Sorry folks, if you haven’t paid your taxes, you don’t get to benefit from this tax-based program.)
If you answered ‘yes’ to all these questions, congratulations, your project may qualify for the NRP property tax rebate!
So what exactly is this rebate? Well first of all, it’s a rebate so you pay your full taxes up front and then you are rebated back what is owed to you. Second of all, the rebate is based on the INCREASED value of the property after the improvements have been completed and NOT the original value of the property pre-improvements. And lastly, the rebate starts at 100% on the increased value and gradually steps down every few years by 25% over the course of 10 years.
As one example (and I am using totally made up numbers for the sake of having very easy math), let’s say I own a commercial property and the taxes are $5000 per year. I make some renovations to the building that meets all the criteria above. After the project is completed, the value of my property has increased enough that my taxes are now $7500 per year. Based on the NRP program, I will still pay the original $5000 in taxes but I will be rebated 100% of the $2500 increase in taxes for several years. Then a few years later, I will be rebated 75% of the increase, then 50%, then 25%. After 10 years, I will be paying the full $7500 in property taxes.
If I have a vacant piece of property and the taxes are $200 per year and I build a house or business on it so the taxes jump to $5000 per year, the rebate will start at $4800 and drop down over the 10 years. If I have a property and the taxes are $4000 per year and I make improvements so the taxes jump to $5000 per year, the rebate will start at $1000 per year.
The taxing entities involved in the NRP are the county, city (either Lincoln or Sylvan Grove), and schools. Both the Lincoln and Sylvan Grove NRP plans are up for renewal by the end of 2016. If you have any thoughts about the program or how it could be improved, I am interested to hear your ideas as I get ready to work with both city councils on the renewal process.
If you have any questions or have a potential improvement project in mind, please feel free to stop by the LCEDF office in the county courthouse basement at 216 E. Lincoln Avenue in Lincoln, give me a call at 785-524-8954, or email me at [email protected].
Lincoln County Economic Development Foundation