We applaud the move by certain Democrats on the City-County Council last month to advance a proposal to expand the downtown tax increment financing district.
Now we're counting on the full council to pass it when it's eligible for consideration at the council's Sept. 17 meeting . . .
The proposal brought by the Ballard administration has been in the works for almost a year as part of the city's attempt to stoke development in the 500 block of Massachusetts Avenue, promote development in the northwest quadrant of the Mile Square, and create a tech hub along West 16th Street near the old Bush stadium . . .
The important projects the city is trying to jump-start with expansion of the downtown TIF district were conceived with TIF as part of the financial equation. This is not the time to drastically overhaul the city's TIF policy. Officials on both sides of the debate can take a more rational, less politically charged look at the issue when there aren't projects in the pipeline that will succeed or fail based on the outcome of deliberations.While it may be true that the plans as currently conceived were drawn up based upon financing terms that include tens of millions of dollars in public subsidies, if not more, it is a complete fabrication to claim that no development would occur without approving massive taxpayer-funding of private development projects. In the case of the 500 block of Massachusetts Avenue, it would attract many real estate speculators if the city simply put the land on the auction block and permitted real estate developers to compete in the free market to purchase this very valuable parcel of property. For reasons we must assume are related to political cronyism, the city is insisting that a million-dollar real estate commission be paid to a politically-connected real estate brokerage firm for doing next to nothing and then permitting development on the parcel only by a developer who will receive tens of millions of dollars in public subsidies. The Ballard administration has refused to even publicly disclose the terms of tentative development plans it has already decided upon behind closed doors. What are they hiding from the public? And what does Mickey Maurer, a multi-millionaire real estate developer and banker, know that you and I don't know?
The editorial lauds Councilors Vop Osili and Joe Simpson for their efforts to move the pending TIF proposals out of committee last month, while blasting Councilor Steve Talley for holding approval of them up. The IBJ has failed to report on the fact that those measures were voted out of committee in violation of council rules after Talley as committee chairman had gaveled the meeting adjourned. The newspaper does not mention that an amendment offered by Councilor Osili would directly benefit minority business owners like himself. Simpson is facing criminal charges for interfering with a police investigation of a burglary that took place in his Fall Creek neighborhood, which has been plagued by skyrocketing crime. The city's police department faces huge budget cuts and has been unable to fill hundreds of vacant positions because of a budget shortfall despite the passage of a 65% income tax increase five years ago for this very purpose. TIF districts divert property tax revenues that would otherwise be used to pay for basic city services, including police and fire services, and the proposals Councilors Osili and Simpson support will only exacerbate that funding shortfall.
Curiously, the IBJ has also been simultaneously sugar coating the financial debacle the city of Carmel faces after undertaking costly projects like the Palladium and City Center by that city's Redevelopment Commission, which were funded by its downtown TIF district and nearly $300 million in borrowing. Its reporting continues to refer to the insolvency of the RDC as a mere "refinancing" to achieve lower lower interest rates on the massive borrowing undertaken by the RDC without council approval. In actuality, the City is being forced to bail out the insolvent RDC by making the city's property taxpayers liable for the massive debt accumulated by the RDC. The council's president, Rick Sharp, hasn't ruled out the possibility that taxes may need to be raised, in addition to the debt assumption, to resolve the financial debacle. The RDC reportedly borrowed tens of millions of dollars from local financial institutions, including Maurer's National Bank of Indianapolis, using lines of credit that it is now unable to repay unless the debt is refinanced and assumed by the city.
Fellow blogger Pat Andrews has documented the fact that dozens of Indianapolis' TIF districts are insolvent and continue to exist only by diverting revenues from other TIF districts and city revenues to cover their obligations, at the same time they are eating into the base property taxes that property taxpayers had been told would always be paid to other taxing districts when the TIF districts were first established. Some TIF districts have eaten up the entire tax base to the point that property tax revenues generated within the TIF district are no longer paid to other taxing districts dependent on that source of revenue for their operation. TIF districts already consume 10% of our county's tax base and collect more than $100 million in property tax revenues that would have otherwise gone to other taxing districts. To claim as the IBJ's editors do that it is rational at a time the city is facing a $50 to $60 million budget shortfall to divert even more tax revenues to finance private development is insane.
There is something really untoward taking place in this city right now when such powerful individuals and interests are aligning to strip other taxing districts of much-needed property tax revenues as the current economic downturn enters its fifth year and property taxes continue to plunge due to declining property values for the benefit of a handful of projects for which there has been neither transparency nor demonstrated need. It is really sad that the IBJ's editorial staff has joined forces in pushing something that is so clearly against the public's interest and has interfered with what is typically the best investigative reporting in this town by its talented staff of reporters by suppressing the truth. California was forced to suspend its TIF law as dozens of its municipalities face bankruptcy. It looks like that's what it's going to take in this state before anyone decides to come to their senses and decides to rein in this abused economic development law.