How does that old saying go about ‘Fair and Balanced’ reporting? The Argus Leader Editorial Board and columnist Jodi Schwan both have endorsed using a TIF for the Washington Square project, something I would expect out of Stormland TV news (who is always sucking up to city subsidized projects) but I found it to be a little strange for our local newspaper.
Then there is the tired old argument that TIF’s are needed for any of these projects to succeed;
But it all comes down to public-private partnerships.
“They’re not important. They’re absolute. They’re critical. You can’t do it without them,” he said. “If you’re setting out to do something transformational for your city, it’s impossible to do it with only private money. You need at least a third of the money … to come from the public sector.”
Let’s think about that. The Houwmans are looking for less than 15 percent of their financing from TIF with no other public funding. Stark is saying one-third is justifiable.
While I am all out opposed to TIF’s, especially when big developers make ridiculous statements about them being the lifeblood of redevelopment, let’s say for a moment I supported them. I think a TIF would be fine for the utility work and cleaning up the alley between Main and Phillips Avenue, but 15% of the total cost? I don’t think so. There seems to be this movement by developers (and investors) in Sioux Falls (who have already seen record growth over the past several years) to feed at government’s trough. While a TIF is certainly not a handout, it is a rebate on property taxes (and they are requesting the rebate for 10 years). While the County struggles to make ends meet (they are considering another opt-out) we want to give another private development millions in tax rebates.
Worst of all, they have suckered our local paper into believing that somehow we need more parking in that area (that can only be used at night and weekends).
I think this project should sink or swim on it’s own. No pulling strings behind closed doors in City Hall or at our local paper. If we really want Downtown to be successful in development we need a stronger concerted effort of helping private homeowners and apartment owners surrounding downtown with fixing streets, infrastructure and community development grants and loans. Neighborhoods and districts are built by individuals helping each other. A couple more condos at 12th & Main in no way should be funded partially through property tax rebates, and shame on the Argus for getting in the middle of the fight that is between the developers and our local government.
I disagree with you on this one Scott. Do the math over the next ten years of what the real estate taxes are today versus what the taxes will be after development even with the TIF. Every tax collection entity will be further ahead with the development. The public will be further ahead with more parking available. The downtown will be further ahead with more housing, more residents, more office space and of course more sales tax revenue. Public dollars are used in cities across the country trying to revitalizing their downtowns. I would be much more concerned how tax dollars are wasted versus how envious people are over how investors are willing to take high risks to improve downtown.
Minnehaha County expects a revenue reduction next year in property taxes of about $56,000 due to TIFs.
While it may help with sales taxes how is the Washington Square project going to help educate more children or prosecute more criminals in our fine city and county? On top of that, more sales tax revenue doesn’t really help me at all, it just makes the city richer, and at the rate they are spending money, I would prefer we hold back the purse strings a bit. Let’s admit it, this is a private development project, funded by private investors the public has NO business intervening in it. If the Washington Square wants to charge for parking on nights and weekends, more power to them if they keep it all private investment.
Jack Frost nails it, I think. It’s a question of perspective. For you and Jeff to view any of this as “lost” revenue, you first have to subscribe to the mindset that the development would have occurred, and to the same degree, absent any kind of incentive. The incremental revenue is revenue that only comes to fruition if the property is improved. I offer that not by way of explanation – I know you get how a TIF works – but for emphasis.
If the landowner decides not to redevelop or redevelops at a much smaller scale, the real loser there in the long run is the city, for failing to capitalize on an opportunity to bring a parcel to its highest and best use.
To each their own I guess, but if I have an option to do something that dramatically increases the value of a parcel in a way that helps to improve a neighborhood and alleviates tax burden in the long run on other properties, I will take that deal 11 times out of 10.
I read the article online. I’d compare it to a political press release. A formal way of presenting a bad idea so it sounds good. Shame on you Argus. You presented one side without the other. Taxpayer subsidies seem to get redirected into the developers con. What comes first, the chicken or the egg? Build this turkey, then taxpayers will assist with where you can put egg-shaped cars.
How about a TIF escrow account contingent on 75% completion of the project?
The business acumen now is fraud. Pyramid schemes where millions get diverted to Switzerland waiting for the MBA after he serves 6 months of a 5 year term in a country club prison.
Try the later payment process. Wait till you’re sure it’s gonna happen. It used to be the garage got built but left empty because the project was all on paper. Another empty garage is fine but fast forward to 2015. Now, there will be no project and no garage with a few executives lighting Cuban cigars with hundred dollar bills from the TIF.
if a project “can’t” get built without a tif, how can it be a good project? how is it the doctor can renovate the old railroad office building with no tifs, and the great craig lloyd “can’t” make it work without one?
From what I have seen in pictures the project doesn’t look like it belongs in the downtown area. It is way too modernistic looking.
Thank you Scott & Joan for your valuable input. Points I’d not contemplated. Worthy as elements city planning and council should consider.
No such thing as “too modernistic” (is that even a word?) particularly for downtown. Downtown is where Architects are able to stretch their creative wings and make buildings look more like artwork than dormitories. Have any of you ever been to a large metro like Minneapolis? The IDS tower looks right at home next to the Foshay building.
Also, again TIF’s level the playing field where the ROI becomes attractive enough for a bank to greenlight a project in the core (which offers more challenges to build) than say another huge, beige rectangle with Menards quality finishes on the edge of town where last year corn was growing. That is a key benefit as there’s always competition for investment dollars. You want investors like the Lloyds and Houwman’s to assume risk when they build downtown, the City should encourage that in an effort to never let the core begin to rot because when it does there’s no amount of money you can throw at it to stop the suburban flight, see Detroit for exhibit A.