Finance minister John Swinney affirmed Edinburgh council’s plans to revamp the cities stagnant waterfront using £84 million borrowed under a financing initiative completely new to the UK.
In an effort to push the now 6 year old project along, the council proposed the introduction of ‘tax increment financing’, an initiative that marks the first implementation of it in the UK. Using it, the council hopes to create a new hub upon which future business’s can be based.
The development plans boast up to 8,000 new houses, two new neighbourhood centres for local shopping, two new primary schools as well as hotel and leisure facilities.
Focus however is set sternly upon the business opportunities the waterfront hopes to provide and upon which the project itself relies. Tax incremented financing was first used and pioneered in the United States and essentially enables councils to spend money in anticipation of the future revenue that the commercial development will generate and that the infrastructure encourages to pay back.
Introduction of a cruise liner terminal, lock gates, an esplanade and other business use including office buildings, it is hoped will allow the area to become a major employment location was enough to win the full backing of finance minister John Swinney who said:
“Westminster cuts to the Scottish budget have emphasized the importance of finding new funding models to deliver crucial infrastructure projects such as the Edinburgh Waterfront, that can unlock further economic development, whilst ensuring maximum value for the public purse.”
Councilor Jenny Dawe, Leader of City of Edinburgh Council said: “Attracting new investment is critical to the city’s future and I warmly welcome the Scottish Government’s support.
“We produced a clear and compelling business case for the use of TIF to help transform Edinburgh’s Waterfront into a more attractive area for living, working and leisure. Our aim is to kick-start growth, which will protect and create jobs now rather than waiting until the economy recovers.”
“As well as being an innovative step, this shows we are being proactive and looking out for Edinburgh’s long-term success.”
This was later supported by Barry White, Chief Executive of the Scottish Futures Trust, who said: “Tax Incremental Financing is an innovative way to fund growth from growth which supports jobs and aids economic recovery. This pioneering 84 million pounds waterfront development brings TIF to the UK for the first time and will unlock up to 660 million pounds investment from the private sector.”