Tax Increment Financing is a complex system that allows local governments to finance development projects with the revenue generated by the development. It is a part of South Carolina Community Development Law because the legislature found that: 

Incentives must be provided for redevelopment in areas which are, or threaten to become, predominantly slum or blighted. (1) 

The process is highly controversial because the revenues generated by TIF come at the expense of future tax revenues, the system has led to a lowering of criteria for determining blight and its precursors,  it generally functions as a taxpayer subsidy for developers, and the program is open to abuse and subject to corruption. (2). 

In Aiken County, TIF has earned a bad reputation from two instances. More than a decade ago there was a failed effort to convince County Council to use TIF for residential developments on undeveloped land.  The City of North Augusta has used TIF to fund its Riverfront Park (originally “Project Jackson”) development after the Aiken School Board approved it, which provoked litigation against the city that ultimately was decided in the South Carolina Supreme Court. 

So TIF is a touchy subject, and city officials like to defend Project Pascalis plans by speaking negatively about TIF. For example, during the May 9, 2022 Aiken City Council public hearing regarding privatization of Newberry Street, council member Kay Brohl emphatically declared: 

 We are not North Augusta, we are not doing TIF.

The Aiken Municipal Development Commission (AMDC) and City of Aiken insist that TIF is unnecessary for Project Pascalis, mostly due to the existence of $25 million in South Carolina Plutonium Settlement funds allocated to “Downtown and Northside Development.” 

As it turns out, the City of Aiken is not as different from North Augusta as Ms. Brohl asserted. On April 27, 2021 AMDC Executive Director Tim O’Briant wrote the following message to Weldon Wyatt and Chip Goforth: 

Here is the proposal for a full market study related to Project Pascalis from AECOM. Such as report would be required by law if the County considers a TIF for the project. I’d like to get these guys, or another firm if you have suggestions, started so we can be ready for the TIF debate ASAP. Let’s discuss.(2) 

At no time have AMDC officials acknowledged that TIF was even an option, but clearly it was enough of an option to provoke a call for a legally required study. While City officials vehemently deny that TIF is an option for Project Pascalis, this email reveals the AMDC was considering it as a backup plan and preparing to use it. 

With rising costs facing the development, will the City attempt to backtrack and return to a TIF scheme? 

---

For Reference

(1.) Tax Increment Financing for Redevelopment, which the city could attempt apply to the “conservation area” in the Project Pascalis project area, is at: 
https://www.scstatehouse.gov/code/t31c006.php

(2) For more information regarding TIF, these sites provide a variety of perspectives:  
Sterling CRE Advisors
Wikipedia – Tax Increment Financing
ERIS Blog: Tax Increment Financing – Pros. Cons and Examples

(3) April 27, 2021 email obtained via South Carolina Freedom of Information Act request.