Business owners with commercial property in McMinnville can now apply for a property tax freeze as an incentive to move forward with renovation projects.
An expansion of the McMinnville Downtown Revenue Finance Corporation’s PILOT program has been approved by the full Warren County Commission and McMinnville Board of Mayor and Aldermen.
“These resolutions give MDRFC the authorization to expand the boundary in which we can offer the PILOT program to include all property parcels zoned commercial within the city limits of McMinnville,” said representative Mike Weatherspoon.
The PILOT program (payment in lieu of taxes) provides an incentive to owners and developers to rehab an existing building or start new construction. Qualified applicants will have both city and county property taxes frozen at pre-development rates for up to 15 years for building renovations and up to 10 years for new construction projects.
For example, a vacant lot in the city could have a property tax value of $100,000. A developer could construct a $5 million hotel on that property, thus increasing its value. But if the property was accepted into the PILOT program, the value of the property would be frozen at $100,000, a tremendous tax savings.
The PILOT agreement on the property continues for the approved number of years. At the end of the tax freeze, the title is automatically transferred back to the property owner and full property taxes are reinstated.
Property owners can opt out of the program at any time, but the tax benefit ends when that happens.
“At any time, the applicant can terminate the PILOT tax-freeze agreement and we give the title back to them,” said Weather-spoon. “However, if that happens, full property taxes are reinstated at that time. If they decide halfway through they want the title back because they are going to sell the property, then we give back the title and the tax freeze stops. By our charter, we never hold the title once it has been requested.”
Before the expansion, the program was only available to properties in and around the downtown historic district.