I am generally not in favor of TIFs. I do not like the idea of subsidizing free enterprise with public funds, and forcing businesses to pay taxes to their competitors. I also feel that if a project won’t be profitable without public money, it’s not a worthwhile project.
However, there are some facts that are unique to our situation that mitigate these concerns. For the first concern, our community has only two other businesses that might be affected, and I would be in favor of requesting that no businesses go into the development that compete with our existing commercial properties. As a landlord, I am not particularly concerned with rental competition: I feel my location and property are not in direct competition with any rentals the condo might contain, and they would fall into a higher price range than Grandview.
For the second concern, I think it’s important to ask if THIS developer will go ahead with the project if the TIF is not offered. This question is important because if Maxwell does not do the project, the right of first refusal falls to the University. If the University buys the property, it definitely falls off the tax rolls and many of the benefits associated with developing the property are lost. It will continue to be exempt from the tax rolls, and you can be sure the University will not solicit the amount of input into whatever project they decide to build that Maxwell has. While there is no way to know for sure the answer to “will it go ahead without public money?”, my guess is “no” because despite the amount of money Maxwell has already spent in development to date, he has disclosed his profit margins to us with and without the financing. If I were Maxwell, I would use my time and resources to complete a project with a margin more consistent with industry norms instead of this one if the TIF is not granted.
What are we receiving in exchange for TIF? This is difficult to quantify, because we would receive both tangible and intangible benefits from our investment. Easily enough to quantify is the benefit of the community room, the improvements to the Sunset/Melrose intersection and the opportunity for increased tax revenues. What else are we receiving? It is more difficult to quantify the diversification of neighbors, increasing commercial opportunities exponentially, or having a “downtown”. I understand that those may not be seen as benefits to everyone, that some would like to keep University Heights a sleepy bedroom community. I am not one of those: I find the opportunities a business district would offer exciting and evolutionary. How much I am willing to part with my tax dollars to fund those opportunities is a matter for consideration and will be based on the numbers.
As a landlocked community with limited opportunities for growth, I feel that TIF is a tool to purchase a much-needed benefit. The current structure limits the City’s liability upfront by refunding only the tax revenues generated, and I believe there is enough public good in this for-profit enterprise to justify the use.
However, there are some facts that are unique to our situation that mitigate these concerns. For the first concern, our community has only two other businesses that might be affected, and I would be in favor of requesting that no businesses go into the development that compete with our existing commercial properties. As a landlord, I am not particularly concerned with rental competition: I feel my location and property are not in direct competition with any rentals the condo might contain, and they would fall into a higher price range than Grandview.
For the second concern, I think it’s important to ask if THIS developer will go ahead with the project if the TIF is not offered. This question is important because if Maxwell does not do the project, the right of first refusal falls to the University. If the University buys the property, it definitely falls off the tax rolls and many of the benefits associated with developing the property are lost. It will continue to be exempt from the tax rolls, and you can be sure the University will not solicit the amount of input into whatever project they decide to build that Maxwell has. While there is no way to know for sure the answer to “will it go ahead without public money?”, my guess is “no” because despite the amount of money Maxwell has already spent in development to date, he has disclosed his profit margins to us with and without the financing. If I were Maxwell, I would use my time and resources to complete a project with a margin more consistent with industry norms instead of this one if the TIF is not granted.
What are we receiving in exchange for TIF? This is difficult to quantify, because we would receive both tangible and intangible benefits from our investment. Easily enough to quantify is the benefit of the community room, the improvements to the Sunset/Melrose intersection and the opportunity for increased tax revenues. What else are we receiving? It is more difficult to quantify the diversification of neighbors, increasing commercial opportunities exponentially, or having a “downtown”. I understand that those may not be seen as benefits to everyone, that some would like to keep University Heights a sleepy bedroom community. I am not one of those: I find the opportunities a business district would offer exciting and evolutionary. How much I am willing to part with my tax dollars to fund those opportunities is a matter for consideration and will be based on the numbers.
As a landlocked community with limited opportunities for growth, I feel that TIF is a tool to purchase a much-needed benefit. The current structure limits the City’s liability upfront by refunding only the tax revenues generated, and I believe there is enough public good in this for-profit enterprise to justify the use.
