Tax increment financing (TIF) is taxpayer money that is intended to improve areas that are blighted and would not be otherwise developed but for the use of this money. Neighbors for a Livable Saint Paul (NLSP) contends that the Ford site is neither “blighted” nor undesirable, and it is likely that the property could be developed without the use of TIF or with minimal TIF investment. In fact, the City has stated that the Ford site is the best real estate parcel in the Midwest.
TIF diverts taxpayer money from the general fund for 25 years; money that would otherwise be used for schools, libraries, roads, and public safety. Furthermore, inappropriate use of TIF for the Ford site is likely to reduce availability of TIF for other projects in Saint Paul where it is more legitimately needed.
TIF projects interfere with free market forces that bring about a more efficient allocation of capital and better location decisions. In the situation of the Ford property, the city is forcing the use of TIF because they up-zoned the property making it more expensive and more valuable for Ford. The city did not allow the property to be developed at a lower level of zoning and allowing free market forces without the use of TIF.
Theoretically, TIF builds the tax base, but inappropriate use of TIF can actually have the opposite effect. TIF projects promise to promote vibrancy, employment, more development, and broader tax base, yet many TIF projects fall short on these promises. The use of TIF is risky under the best circumstances, but Saint Paul’s weak economic climate makes this TIF investment especially dangerous. Cont. next column
Does this sound familiar?
"Twenty years into this grand experiment, residents are bucking against what all this growth has wrought: high rents, displacement, and a gutting of the very character of their cities. In some US cities, the squeeze has begun to hit the very people who helped spur this urban development in the first place, the very people that city after city are working so hard to attract." It ain't the Twin Cities...yet. Click here
Reading the most recent articles describing funding for the Ford site, one could be forgiven for being confused. Is public funding going to be over $100M as Ryan initially requested (which set off quite a clamor), or is it $53M or some variant as both the Strib and PiPress announced.
Review the articles and then spend a bit of time on our TIF page where you're more likely to find the real stuff.
Cont. Many U.S. cities which have traditionally used TIF for development, are experiencing extreme problems as a result. Chicago has experienced drastically reduced educational funds. Kansas City and many other cities in the nation have had to raise tax revenues to offset losses in TIF developments that did not perform well. Saint Paul has had several years of double-digit tax increases. Will we find end up like these other cities in the future?
TIF funds have been used for development projects in St. Paul since the 1960’s; after all of this time and widespread use (60+ TIF projects!), what has been the overall economic impact of TIF funding? After all of these years shouldn’t St Paul taxpayers have started seeing tax reductions rather than double digit increases?
Prior to the widespread use of TIF, commercial property in St. Paul experienced 5% vacancy rates; now commercial vacancy rates typically exceed 20%. Has TIF had a positive or negative effect on business and therefor employment in St. Paul? Specifically, have TIF projects created sustainable jobs or reduced the number of Saint Paul residents who live below the poverty level?
TIF is the primary tool St. Paul is using to create affordable housing. After more than 40 years of using TIF, has St. Paul had an increase or decrease in levels of affordable housing? Have we experienced increases or decreases in average rents? Cont. TIF page
What's Happening at the Ford Site?
You can reach AUAR material by clicking here. The comments section is the final section of this 635 page document. Each section has its own numbering system. The numbers in this entry are all pdf page numbers, that is page number within the total document.
Thank you for staying engaged in these very important community issues!
- Neighbors for a Livable Saint Paul