What Chuck Repke is describing is how TIF is supposed to work, but over the years has been abused in many if not most cases, particululary in Saint Paul.. When TIF began to be used the rule of thumb was for TIF projects to be paid off from 8 to 10 years now in St. Paul we talk like 20 years is appropriate.
To take one example, look at what happened to the US Bank deal on the Westside Flats. In this case virtually all the new taxes are considered part of the increment because so little taxes were generated from this property prior to development. Our mayor and four members of the City Council in 2000 agreed to this TIF funding but without an assessment agreement. That is what is needed to assure we will get at least the necessary dollars "in lieu of taxes" to pay off the TIF bonds. Without this the taxes US Bank pays is comparable to other similar properties. This will likely never cover its own bonds and the taxpayers have to make up the difference. US bank vacated most of four buildings Downtown when they moved to the Westside. This in turn created an enormous decrease in tax valuation for those buildings and therefore less taxes not only for the City, but also the County and School district. In fact these same buildings are now used as comparables in valuation of the US Bank development. An equally egregious example of this kind of TIF abuse is with the Minnesota Life's new 401 Building. Here again there was no assessment agreement. Minnesota then proceeded to appeal for lower taxes on both their new and older 1982 building. Considering this specific development created lots of unnecessary office space which was then dumped at below rate prices and devalued the entire Downtown, everyone including the City, County, School district and even Minnesota Life is a loser. Also lost in these discussions are the lost opportunities for redevelopment at market rates which generate real property taxes when sites are not given up too quickly. I believe TIF Financing in theory is a valuable tool for redevelopment providing honest long term benefits are kept in focus and realized. John Mannillo Downtown and Highland Park _____________________________________________ To Join: St. Paul Issues Forum Rules Discussion Email: [EMAIL PROTECTED] ____________________________________________ NEW ADDRESS FOR LIST: [EMAIL PROTECTED] To subscribe, modify subscription, or get your password - visit: http://www.mnforum.org/mailman/listinfo/stpaul Archive Address: http://www.mnforum.org/mailman/private/stpaul/
