Spartanburg TIF Rating Up

Spartanburg’s tax increment financing bond rating was raised to A from A-minus by Standard & Poor’s.Tuesday’s upgrade affects about $15.8 million of outstanding debt and reflects improved coverage on the TIF bonds, said a report by analyst Eden Perry. The A rating also reflects the city’s strong manufacturing-focused economy, growing income levels that are above the state’s average, strong coverage of maximum annual debt service with the pledged franchise tax revenue, an adequate 1.35 times additional bonds test of the franchise-tax revenues alone, and sound financial operations.“The stable outlook reflects our expectation of continued stable franchise-fee tax revenue trends, providing strong coverage,” Perry said. “The outlook also reflects the adequate annual debt service coverage of the bonds, with the tax increment revenues and without the franchise tax revenues.”The TIF bonds are secured by a 0.3% franchise tax levied on telecommunications and cable television, a 3% franchise tax on public utilities, and by tax increment revenue in the project area. One Spartanburg’s TIF projects, known as the St. John-Daniel Morgan development area, encompasses 98 acres with a combination of retail, residential, and entertainment properties.In the Broad Street TIF, covering about 76 acres, three major developments have occurred since its inception — Advance America Inc. built a $6.6 million office building, Extended Stay America moved its headquarters into a $13 million building in the district, and QS/1, a pharmacy software specialty company, moved into the TIF from outside the city.