"What we're proposing here is this be what's commonly called a pay-as-you-go tax-increment district . This is the type of plan that is the least risk financially to the city. It does not require us to issue any tax-increment bonds or issue any debt at all. Basically what this provides is the developer will be responsible for financing the cost of the infrastructure and then will be reimbursed over time with the taxincrement proceeds that the district generates over the life of the district"[City Manager Jeff Weldon, quoted by Jill Fier, "Council Approves Valley View TID," Brookings Register, 2008.06.15].
So the developers still put up the money to build the project; Brookings tax dollars don't reimburse the developer until the project is completed and showing results. If the developers don't follow through turn the land into a moneymaker, the developers are left holding the bag, not the city. What a concept!
Fier reports that the Brookings City Council imposed further requirements on the developers, setting a five-year deadline to complete the development and limiting the cost of completed homes in the development at $160,000 -- still not exactly my definition of affordable, but reasonable by the standards of the South Dakota Public Finance Housing Agency, says Weldon.
I'm still not convinced that tax increment financing for residential development is the best use of public dollars. But if we're going to intrude so in the free market, we should follow Brookings's lead: don't hand the money out up front, and don't promise the developers money without requiring the developers to carry out their promise to fulfill their stated public purpose, in this case affordable housing.
If this was not an "economic developement TIF" I believe the schools portion of the taxes wil be "re-levied" over the rest of the school district. Or does this TIF qualify as an "economic developement TIF ?
ReplyDeleteMy wife and I sat at Common Grounds enjoying a local lunch and noticed the disrepair of the Loopy's Building (former Ben Franklin corner) and wondered why Madison has not created a downtown revitalization TIF or MainStreet low interest loan program to fix up these old buildings before they fall down. Pieces of the Loopy's building are falling from the front and side of the building. Someone will get hurt. Madison could have such a nice main drive if it were updated and fixed up. A TIF for downtown would work and more people would benefit instead of just one developer.
ReplyDeleteThe LAIC told us last summer that they would be rolling out a downtown jumpstart program of some sort this spring. Spring ends in two days.
ReplyDeleteWe agree wholeheartedly: downtown is where it's at... and where any TIF should be, to benefit everyone.