A Step in the Right Direction, Part 2

A couple of weeks ago, I wrote a post on this blog, which I called A Step in the Right Direction, which commented on a new development on Maple Street where a real estate office will be built, and without the TIF loans which characterized other downtown developments.  I noted I have been strongly critical of TIFs, for a number of reasons.

Since then I have had a some comments about how even this project involves what I have called "corporate welfare", that is taxpayer giveaways to do a particular development.  And they are correct, this project does do that. Some of those so-called incentives for this Maple Street project include:

• A sale price for the land of $25,000.  The Redevelopment Commission appears to have paid $175,000 for the property, then about $12,000 to demolish the existing structure built in 1940. The land has an appraised value of $95,500, so the new owner is getting it at a considerable discount. 
• Waiver of impact fees amounting to $58,000.00. 

The City was prepared to award TIF money, which it would borrow on its own credit, but that did not happen.  That was the point of my comment in the original post.  Again, this is a step in the right direction, but serious scrutiny needs to be given to other incentives.  At a minimum, the return to the taxpayer should be a net positive, not a negative. City Administration would doubtless argue (and have, publicly and privately) that the long-term benefits will be both tangible and intangible.  That is a conversation worth having.  

There are long-term liabilities to all the TIF and other taxpayer funding in the downtown redevelopment. Our total debt is skyrocketing.  The last total I was able to get, and then only by an official Public Records Act request, was over $250 million.  Per capita debt rose about 700% between 2007 and 2013, a period of time when our population also rose. Developments in TIF districts do not add to the tax base available to fund local government (including some impact on the schools) until the debt is paid off, even if a particular project did not get a TIF loan. Some of the TIF-funded projects, such as the Depot, Switch, and others, generate less in new tax revenue than is needed to make the debt service payments. 

And again, the Maple Street project does not do that. But there is nothing to prevent TIF funding from happening again unless citizens speak out, and make their voices heard at the ballot box.