CEDAR FALLS - The city will consider a sales tax increment financing district to help jump-start business at College Square Mall.

Unlike all current Cedar Valley TIF districts, this would apply to the one-cent local option sales tax collected by merchants in the mall and at other properties on mall property. Current TIF districts all work from property tax dollars.

In a sales tax TIF district, the city would collect all of the 1 percent option tax that exceeds the current taxes collected at the time the district is established. That money could be used by the city to make improvements, such as along University Avenue or in mall parking lots. It also could be sent back to the mall as a rebate, where the mall could make improvements to the mall or offer rebates to merchants.

"That gives the businesses incentive to want to grow," said Ron Gaines, city director of developmental services. "We're trying to figure out how to make this work in the College Square mall area."

The trick is, mall properties would have to generate more sales tax money.

In a Monday City Council committee meeting on the issue, mall manager Jeremy Larsen said the retail climate hasn't been good for growing revenues.

"The challenge in retail right now is no one is expanding," Larsen said.

The 1-cent sales tax was first approved in Black Hawk County in 1991. It has been renewed every five years since then, and will be up for another referendum Nov. 3. Cedar Falls' share of the option tax money has been used only for road repair work to this point.

City Administrative Services Director Richard McAlister said if a sales tax TIF is established at College Square, it would not affect the current tax revenues from College Square.

"It would not be on anything of the 1 percent paid by taxes today," McAlister said.

At the Monday committee meeting, Councilman Kamyar Enshayan indicated he thought investment in College Square might make sense.

"I really think College Square is an important center of commerce, surrounded by residential areas," Enshayan said.

The Iowa Legislature just made sales tax TIFs legal last year.