« An opinion... | Main | Where to start?? »

April 09, 2018

Comments

Leslie B.

I don't disagree with what your saying, but all we need to do is get someone from Amazon here while the streets are in this condition, and we'll be off their list forever.

Natacha

We taxpayers wouldn't see any property tax benefit from TIF handouts for at least 25 years after a project is built. That's because the increased property tax value resulting from the improvement on the parcel goes to pay back the bonds. I question what the value of some of these cheaply-built apartments will be after 25 years, when the full property value is supposed to start being paid. It might well be a wash--in other words, due to wear and tear over the course of 25 years by multiple transients, the project may not have much of an assessed valuation. Vinyl windows and plastic doors don't hold up well.

TIFs were intended as a means to stimulate redevelopment in distressed areas of a City where a developer couldn't get conventional financing because of risk. The idea is that if the City helps a developer fix up an abandoned factory, for example, by selling bonds, if the developer puts in a quality retail or housing development, other conventionally-financed developments in the area would follow, and an entire distressed area could be turned around. Ideally, the increased property taxes from conventionally-financed projects mitigates the property tax hit on the TIF parcel. A win-win for everyone.

Used this way, TIFs are a good tool, but, of course, that's not how TIFs are used in Indianapolis. The qualification that an area be "distressed" and not otherwise qualifying for conventional financing is simply ignored, because once developers heard that the City would borrow money to pay for their projects, they all have their hands out for money. They whine and argue about how wonderful their project will be, how it will benefit the City, how it will create jobs. As today's piece points out, where's the proof? How about the Angie's List fiasco? Although it didn't involve a TIF, Angie's List promised 1000 permanent jobs. Now, it's been sold to Home Advisor.

TIFs aren't being used to improve economically-distressed areas at all. They are being used to prop up profits and eliminate risk for developers. Taxpayers bear the risk of failure. After all, why go out and borrow money on your own if you don't have to? Why not take all kinds of risk with other people's money, if there aren't any consequences? Why bother to consider whether there are already too many apartments Downtown, for example, or whether Millennials are opting to purchase starter homes, rather than pay thousands of dollars every month for rent? Why look to the future when planning a project, which you would do with your own money?

In California, where TIFs started in the 1950's the same thing happened. So much property was eventually encumbered with TIFs that schools struggled to even pay utility bills. Because of competition between cities, no mayor had the guts to be the first to say "NO", risking loss of jobs or whatever alleged benefits the developers argued their project would bring, so it took action on the state level to stop the abuse. Gov. Schwartzenegger issued an executive order stopping TIFs, and it was carried over by Gov. Jerry Brown.

After all of the TIF-funded projects are paid off, California property taxpayers will see a huge decrease in their property taxes and improvements in schools. That, in an of itself, will increase property values.

Indianapolis is on the same path. Why can't we learn from the mistakes of others? Why doesn't the local media investigate and question the value of ignoring the criteria for TIF handouts and demand some accountability? Is it because they are all part of the Greater Indianapolis Progress Committee? Is that why the local newspaper and television stations all provide essentially free publicity for all the sports teams and things like the Indianapolis 500, certain restaurants, and new developments and don't report on more serious issues, like the infrastructure crisis and failure of the public schools to educate children?

The comments to this entry are closed.