Major changes are on the way involving Nashville use of a tax incentive that has helped pay for the booming growth downtown.
Mayor Megan Barry is supporting a proposed ordinance that is on third and final reading Tuesday night.
It would put new restrictions and regulations on how Metro uses tax-increment financing (TIF).
The changes follow a series of reports by NewsChannel 5 Investigates that revealed many downtown buildings are essentially off the property tax rolls.
Mayor Barry said she heard lot of concerns about tax increment financing on the campaign trail.
In an interview with NewsChannel 5 Investigates she discussed the ordinance that she is supporting.
"It's always a good idea when you're mayor to come and take a fresh look at things -- and we were able to do that, working with the Metro Council who were very focused on this issue," Mayor Barry said.
Our investigation revealed Metro has diverted property tax money from many downtown buildings to the Metro Development and Housing Agency (MDHA).
Instead of paying for police and fire and schools, the property tax money from many buildings pays for more development.
For example, Nashville's iconic AT&T building. Its TIF loan was paid off in 2002. While it generated $1.7 million in property taxes last year, only $49,000 went to the general fund to pay for city services.
The Renaissance Hotel generated $1.2 million last year, but the entire amount went to MDHA for development -- contributing nothing to the general fund.
We found the Ryman, the SunTrust Building and dozens of downtown buildings were basically off the property tax rolls.
"Concerns about where the money was going was always part of the conversation and understanding what happened to the money was something I heard a lot about," Mayor Barry said.
Councilman-at-Large Bob Mendes sponsored the ordinance which requires that, once a TIF loan is paid off, all the property tax money from that building goes to the general fund.
It applies to only to future projects.
NewsChannel 5 Investigates asked the mayor, "Do we still need this economic development tool downtown?"
Mayor Barry responded, "I would never want to take a tool away from potential development."
Barry stopped short of saying we need to end giving tax breaks to developers downtown.
Despite Nashville's thriving downtown economy, Metro continues to declare downtown as being "blighted," claiming it is "detrimental to the safety, health, morals and welfare of the people of Nashville."
That designation allows the city to give tax breaks to developers.
NewsChannel 5 Investigates asked Barry, "Is downtown blighted right now?"
She responded, "There are still pieces that can use some development, but I think overall if you were to look at downtown from a vantage point, you would say downtown is doing really well."
Although the mayor credits tax-increment financing with helping fuel Nashville's growth, TIF projects often got little scrutiny by the council.
This new bill would require more transparency and regular progress reports.
"It's up to us as a government to make sure people do understand, and this is going to be helpful," Mayor Barry said.
