When cities want to fund a large-scale project, but don’t want to dip into general property taxes, chances are they’ll look at using a Community Revitalization Levy (CRL). Essentially, it’s a way of using future property tax revenue from new development inside the CRL zone to payoff the project costs.
The idea is that the new public project will encourage private sector investment that otherwise would not occur in the area. The resulting new development generates tax revenue that would not otherwise occur and raises property value within the area. It’s this new tax revenue that is used to pay off the project costs – not the property tax being collected prior to development. It’s basically a way of making sure there is no impact on tax payers and no taxes are taken away from crucial services elsewhere.
Once the initial investment has been repaid, development revenues are directed to the City’s general tax levy.
If City Council supports the development of an area and if they support using a CRL as a source of funding, then the City formally requests The Province (Alberta Municipal Affairs) to establish a CRL.
From there, City administration prepares a CRL plan that includes details of public consultation, costs, project scheduling and risk and presents it to Council.