TfL to set out business case for Tax Increment Financing
By Jamie Carpenter Friday, 12 March 2010
Mayoral agency Transport for London is to publish a report next month to make the case for using a US infrastructure funding tool to fund a £600 million extension of the Northern Line to the Nine Elms area in Wandsworth.
Speaking yesterday in London at a conference organised by real estate advisers CB Richard Ellis, Matthew Hudson, head of corporate finance at TfL, said the report would set out a "concrete example" of how Tax Increment Financing could be used to unlock the regeneration of the Nine Elms opportunity area.
The Tif model, widely used in the US, finances infrastructure projects by borrowing against future tax revenues resulting from regeneration.
"We have a report coming out in five weeks time, that will set out a concrete example of Tif, Hudson said. "It will have all the cashflows, all the structures, which I hope will stimulate the debate and move things forward."
He said that the Nine Elms area – which includes key regeneration projects such as the redevelopment of Battersea Power Station, the revamp of the New Covent Garden Market and is intended to be the site of London’s new US Embassy – would be a "great case study" for Tif.
He said: "The area is clearly defined, you can draw a line round it, you can see the massive increase in business rates that is going to occur. We need to start capturing these revenue streams."
In last year’s Pre-Budget Report, chancellor Alistair Darling pledged to "continue to examine" the framework needed to introduce the Tif tool.