The Lowdown on Springfield’s New Chapter 99 Tax Abatement Program

After months of planning and discussion, Springfield City Council decided in late March to tweak how Chapter 99 tax abatements are granted through a new workable program. Sarah Kerner, Springfield's economic development director, explains the changes.*

Projects must need the help.
One of the biggest changes is developers must write a financial analysis to show their expected return with and without the tax abatement. Council uses this to evaluate how crucial it is to the project. “If you don’t need it to be financially feasible, we are not going to give you this incentive,” Kerner says. 

Projects are scored.
Previously, the city granted 100 percent tax abatement for all projects. Now, a scorecard helps determine how much is granted, the minimum being 50 percent. Depending on the scorecard total, that percentage could increase if a developer adds job creation, affordable housing, retail sales tax and more. The maximum is 75 percent in most cases.

There are exceptions. 
The second biggest change is the addition of multiproject redevelopment plans. These are for large areas (designated by City Council) with multiple owners who might want to take advantage of the incentive separately. Plans of this nature are exempted from the “but for” test and, if approved during a five year period, are granted 100 percent tax abatement for 10 years unless renewed. 

Notification is required.
If a developer receives a tax abatement, others within that project area are notified, such as property owners within 500 feet, registered neighborhoods and taxing jurisdictions. 

*Editor's note: A previous version of this article incorrectly stated when the workable program took effect. The City of Springfield is currently operating under these rules. We regret the error.