Hurricane Katrina swept through the City of New Orleans on Monday, August 29, 2005 with sustained winds of 125 mph (205 km/h). Within a day, the hurricane had leveled or flooded large portions of the City, leaving 100,000 people homeless and many either temporarily or permanently unemployed. As a result, the City had to pursue every source of financing possible to help rebuild its neighborhoods, business and retail centers, industrial complex, and its infrastructure.
Tax increment financing (TIF) is a development financing mechanism that had only been used by the City on two occasions. As a result of its limited use, the City had never established procedures for designating specific areas that might be suitable for redevelopment using TIF, nor had they adopted specific policies and procedures for reviewing and evaluating development proposals.
As a result of the great need for tools to help finance redevelopment efforts throughout New Orleans, the City Council retained PGAV to review the TIF legislation already in place and to help establish policies and procedures for dealing with TIF incentivized projects that would support rebuilding efforts.
Pursuant to a Resolution adopted by the City Council, PGAV worked with a City Intergovernmental Task Force to develop recommendations for reviewing and selecting TIF areas to function as City economic development vehicles. The Task Force interviewed economic development finance experts, reviewed related state laws and local ordinances, investigated best practices from other cities, and met with and solicited comments from local stakeholders.
The result of this effort was the adoption of a Tax Increment Financing Manual which sets forth the official City policies and procedures, relative to their respective authorities, for establishing and administering City-Initiated Tax Increment Districts and to responsibly harness TIF for public-benefitting projects throughout the City. Dedicating TIF for public-benefitting development is a major policy-making decision with significant impacts both to taxpayer generated revenues and economic and community development throughout the City of New Orleans. Given this, it was essential that the Mayor and City Council jointly establish uniform and transparent governing principles and criteria by which the City of New Orleans would dedicate TIF in furtherance of public-benefitting aims.