A Personal Opinion!
I'm Not In Favor of:
promotion of a developer's dreams of using public money
for private retail projects via legal blight methods.
a TIF* Commission board then its city council taking
school district tax money to fund retail projects.
Why should some businesses have a tax break while
others pay their share for public improvement?
Should consumers boycott TIF developed businesses?**
Help start a community study group to get the facts and deal with the issues!
Send comments by email.
* Tax Increment Financing
The WCC Story As I Saw It:
The West County Center Redevelopment Proposal provided by Westfield Corporation to the City of Des Peres, Missouri and its modifications during the Fall of 1997 became a TIF (Tax Increment Financing) Project in December 1997.
This Westfield TIF Project uses approximately 30 million dollars of potential new public revenue funds to develop West County Center (WCC). Various estimates of the magnitude of change that will occur in the property value for WCC run from around 3.5 to 5.5 times its present value. Initial estimates for increased sales run from around 3 to 4 plus times the 1996 annual value. A new West County Center could be up and running in the year 2001 or 2 but will have some value during construction time since some stores will remain open.
As a parent of children attending the R-7 School District and a faculty member of the Community College District I became interested in how much these and other districts* would stand to loose from the potential new revenue, i.e. bonded revenue of a WCC TIF.
R-7 Kirkwood School District provided a copy of "Taxes Paid to District -- WCC 1991-1996" in which the 1993 amount was just under 1/2 million while 1994, 1995 and 1996 were a tad over 1/2 million each. The copy did not list other districts nor did it specifically exclude them. If we take a multiplier of 4, which is between the 3.5 and 5.5 above, as a reasonable estimate of an increase in WCC property value and within the bounds of its increased sales times 1/2 million dollars 1996 annual taxes paid we end up with around 2 million dollars a year. This 2 million dollars is on the low side of some of the estimates given in TIF redevelopment proposal comments. We learned that R-7 Kirkwood School District made some arrangements with the City of Des Peres and Westfield Corporation to have some continuation of tax money and even an increase over present annual amounts. But in the long run of the TIF (15 year) plan it looks like the District(s) lost in the neighborhood 15 million dollars or more of new tax revenue.
I attended some open meetings and indicated a loss of increased better education for my children as well as pointing out that Des Peres may not be able to fund a community center for its children in the near future. I noted the loss for the Community College District as well.
I noticed that R-7 School District, which includes WCC area of Des Peres, plans to ask voters for higher taxes this Spring 1998 and I plan to vote for that increase. However I wonder about three things.
1. Will the citizens of Des Peres return the 15 million dollar favor given them last fall by voting in favor of a new school taxes?
2. Will School Districts start to "Just say NO to 'legal blight'!" and reserve all public school money for our children and adults here in Kirkwood and other places (Webster)?
3. WCC indicated their sales run around 100 million dollars per year now and they look forward to an estimated over 300 million dollars per year with its new WCC after 2001, not to mention other centers around St. Louis owned and operated by the same corporation. Why does 1 or 2 million dollars per year need to come from our WCC area children's education?
I am under the opinion that TIF methods of 'legal blight', as I feel were used in a WCC project, are shoddy and a "social blight" on a scale not needed in this part of town!
District and Levy
R-7 Kirkwood School District - - - - - - - - - 3.790
Special School District - - - - - -- - - - - 0.620
St. Louis County District(s)+ - - -- - - - - 0.580
Community College District - - - - - - - - - 0.240
Zoo Museum District - - - - - - - -- - - - 0.232
Metropolitian Sewer District (& H2O) - 0.160
St. Louis County Library - - - - - - - - - - 0.140
Sheltered Workshop - - - - - - - - - - - - - 0.085
State of Missouri - - - - - - - - -- - - - - - 0.030
Total - - - - - - - - - - - - - - -- - 5.877
+ includes parks
June 1998 - Some Questions and Answers
** Anti-TIFRS: Those against Tax Increment Financed RetailerS
for lack of public support for our children.
MORE COMMENTS FROM OTHER ANTI-TIFRS:
Tax increment financing (TIF) if used properly, can be a benefit to some cities and to the developer. It may be helpful to finance the construction of necessary public improvements, such as infrastructure, and to improve truly blighted areas that otherwise would not be developed.
Concerns for the city called ABC where ABC's city council has a proposed TIF to develop SUBABC Business District:*
Legal blight may produce areas of community concern when SUBABC Business District may not show blight in the ordinary sense:
- School districts and the city suffer from loss of potential new revenue from the new development for up to 23 years. School districts get less state money as a secondary result. One state will not allow school district funds to be used in tax abatement developments.
- Other districts, law enforcement, fire districts, public universities, two year colleges, parks, museums, zoo, and more also suffer from loss of potential new revenue.
- Many other taxes may need to be raised to pay for additional services and infrastructure required by the new development. This is a fundamental part of urban sprawl problems even when new development seems to pay for its apparent full development.
- The developer/city can have an intimidating advantage to negotiate with property owners because the city can use the power of eminent domain to condemn property. When eminent domain is used this way it begins to look as though private enterprise has the power of eminent domain.
- When eminent domain is used: Improvements to the interiors of the properties are not considered in making appraisals. Property owners have diminished power to negotiate a fair market value.
- TIF may tempt a developer to build a project that may not be successful. Not enough funds seem available now for the project to stand on its own in a community where the majority of businesses are successful businesses.
- If a period of economic decline occurs, what impact would that have on the city's ability to pay off the bonds? Even with no apparent economic decline ABC suffers from loss of potential new revenue from the new development so that it may not be able to respond to improvment in a normal growth pattern tward a richer community. Then it has suffered an economic decline.
- If the development languishes, would city ABC have been better off with the successful businesses which were moved out? In this case, ie the present successful businesses, the community growth pattern may be slower but at least it is a positive pattern.
- In the SUBABC Business District area, improvements are being planned to develop some vacant properties without the use of TIF. Increased revenue would be generated immediately. How do these developers and current successful area businesses feel when those relatively few members of the ABC community serving on the city council and TIF commission give public funds to a single developer.
- TIFs can easily be abused by the developer/city if its power is used to arbitrarily remove successful businesses that generate their fare share of full revenue.
- Forming a TIF commission and identifying a TIF area, can lower the value of residential and business properties within the TIF area and can deter property owners within the area from making needed costly improvements that will never be realized in the sale price and increases the chance of blight creeping into the surrounding area, especially if it is to be done in stages.
- If a TIF is established for the SUBABC Business District, it should be run by commission members chosen from that business district and surrounding residential areas as well as school commission members.
- The TIF process tends to destroy the sense of place and stability.
*The main outline of ideas presented in this list were developed by others willing to share them with me and I take full responsibility for any comments I furnished that may have changed the point of the origional idea. You may use these comments in your "letter to the editor" or web anti-tif page but let us know about your results. Any good suggestions on how to stop a TIF will be nice!
- Residents and businesses have been attracted to ABC for its stability.