[Mpls] TIF and city development policy

[Steve Minn]

Title: TIF and city development  policy

My apologies for a ramble here, but Neal St. Anthony has started something that deserves more attention. Greg Abbott's suggestion that we need a TIF task force, etc...is a standard politician's answer to a lot of loud complaining. Task Forces rarely produce the kind of results that satisfy anyone long term...the reports gather dust on a shelf at City Hall, and occasionally they get some attention...usually, they are election year fodder. A case in point...The O'Brien Blue Ribbon Task Force of 1992 pointed out a long laundry list of reforms needed at the MCDA, including structural changes and tighter controls.  Lisa McDonald and I undertook these reforms in 1994-1995 in a sweeping package that included, among other things, rotating 4 City Council Members on the MCDA Board along with the Mayor and several outside board members learned in finance, law or related fields.  The City Council (and in particular the crafty and capable Jim Niland) stripped those reforms from the package, and we passed a weak, watered down set of planning and authority changes. The only way to make TIF decisions practical and accountable is for the elected officials who double as board members of the MCDA to limit themselves to a defined TIF budget each and every year, and a defined number of primary development goals, such as: 1)GSF of new retail, 2)a total number of affordable housing units, and 3) "X" number of related jobs.  Then they should take competitive or comparative bids for projects, batch them into quarterly reviews, and four times a year, rate and fund the winning project based of the primary goals and other criteria on a rating scale for TIF. The other criteria should include secondary goals being achieved in these projects like: 1)abating brownfields, 2) proximity to downtown, 3) quality of construction, 4) proximity to transportation, 5) reduction of dependency on automobile, etc...The MCDA has plenty of capable expert staff to evaluate these criteria.  But, they take direction from elected officials/board members. As a final note, no developer...particularly Brighton Development or any other developer who has had their beak in the pot for so long, should be allowed to apply for TIF more than once every five years, or receive more than $20 million of combined subsidy/aid over that five year period. It just irks me that the same old characters always have their hands out for subsidies,and that they ruin the development business for others by constantly having close relationships politically that cloud the merits (or lack of merits usually) of their projects. The level of subsidy that Brighton has received for the high valued homes in the Mills loft restorations is just criminal. I argued back in 1997 that selling the land at a near-write-down price, and some infrastructure investment in utilities was adequate for their reasonable return, but they hoodwinked the Council into believing that without deep subsidy, they couldn't do the clean-up and the historical restoration...what rubbish.   Every TIF contract should contain an audit clause that permits the MCDA to fully audit the  Schedule E and Schedule 8039 and K-1 federal and state returns of any developer getting TIF.  The MCDA should automatically get a piece of any profit over a fixed 12% cash-on-cash return for such low equity investments, plus allow the developer to keep the 5% development fee.  There would be a long list of applicants waiting to do projects, if the rules were standardized. Steve Minn Minneapolis