If you owned two blocks of highly valuable commercial land, would you borrow money to give to someone else to build on it and keep any profits in the hope some money would trickle down to you? Or would you sell the property to the highest bidder, confident the property taxes the development generates will come to you?
There area couple of blocks on Massachusetts ("Mass") Avenue on which a fire station, for years, has stood. The City—i.e., th Mayor and his cronies—appears to want to position over one hundred (100)—that’s right, as in the square of 10; as in the Century mark—to be included in a Tax Increment Financing district ("TIF") to develop those two acres. Maybe the City intends to develop other parts of Mass Ave with that TIF because a developer has a brilliant and unique idea.
That is one problem with TIFs as run in Marion County. We don’t know the details. Everything is hush-hush when it comes to TIFs.
At least word is out about the shape of the proposed TIF. It resembles stereotypes of gerrymandered political districts. Beyond that, there are few details.
Bloggers Pat Andrews ("Had Enough Indy?"), Matt Stone ("Indy Student"), and Gary Welsh ("Advance Indiana") have broken this story open and have valuable pieces on their websites. Blogs, and a couple of local television and radio stations, are where the local news is covered in any depth these days. We discussed TIFs with Pat and with Jeff Cox, also a blogger ("No-Boxes-Allowed") and a local attorney, yesterday on "Civil Discourse Now."
One question prominent in the minds of many is—why? Mass Ave has boomed on its own. The free market has worked there. Sure, the City has paved streets, provided fire and police protection, etc. That would be true in any part of the City. But a TIF usually is used to rejuvenate an economically depressed area or an area in which no development has taken place. Neither is the situation in the case of Mass Ave. TIFs originated in California in 1952. The State since has discontinued use of TIFs. They had grown to over 400, with more than $28 billion in long-term debt, $10 billion in annual revenues, covering $674 billion of the assessed land valuation. California has been in a financial pickle for a few years. The property tax caps pushed by Howard Jarvis had a strongly negative effect. TIFs did not help. TIFs capture the tax revenues from a specific area. That money is deprived from the City’s—in Indy’s example—general fund. The idea is the money will be pumped back into development of the TIF.
Why should the taxes of over 100 blocks be focused on the development of only a couple of blocks in a part of the City that currently thrives?
I have an idea.
Instead of screwing up the City’s finances by creating a TIF from which a few people—I am sure none of whom has close tie with the Mayor or who are owed favors from the Mayor for help in his recent campaign for re-election—gain financial benefit. After all, Indianapolis will buy a parking garage in Broad Ripple for one business that then will derive all the income from parkers, and rents from businesses in other spaces of the building.
Instead, let’s sell those couple of blocks. There can be requests for bid let out, in which a best-use clause is placed. Or, hell, just hold bids and see who pays the most. That way, the City makes money, and there’s no screwy set-up of a TIF.