Wednesday, July 25, 2012

Star Favors More Handouts To Developers At The Expense Of Schools

Mayor Greg Ballard's administration and the Democratic-controlled city-county council are wrestling over a plan to expand a downtown TIF district to include the already successful Mass Avenue business district to aid in prospective new development along the business corridor. The Democratic-controlled council has just concluded a lengthy investigation of TIF districts and found the need for a lot of reforms. The city has been increasingly using TIF districts to aid in development efforts over the past several decades. Every time an existing district is expanded or a new one created, it removes more of the property tax base from the reach of other taxing districts for other primary uses like the schools, public safety and public libraries. New tax revenues spurred by new development are instead diverted to slush funds controlled by the mayor to do with as he pleases, which typically means giving the money to private developers who make big contributions to his campaign committee.

The Ballard administration considers an area along Mass Avenue where a fire station, a credit union and low-income housing for seniors and disabled currently exists to be a "dead zone." They want to turn the one block stretch of property to a private developer to redevelop into a mixed use of residential and commercial property. The credit union and fire station will go, and one of the few green spaces along the avenue will be redeveloped to "maximize its potential." Essentially, their argument is that it is impossible for any new development to occur anywhere downtown unless the property is placed in a TIF district and the tax revenues from it are diverted to give tax subsidies to developers at the expense of the other taxing districts. The Star's editorial board is in total agreement despite how it often complains that schools and other essential services are grossly underfunded.

Development gaps along Mass Ave have long kept the Downtown shopping, restaurant, arts and entertainment district from reaching its full potential . . .
But the council's leadership would do well to remember that the city in many ways is at a disadvantage in competing for business with the suburbs. Further development of Mass Ave and other areas in and near Downtown is needed to attract new residents, who in turn will increase the city's income and sales tax revenues. Those taxes are even more important for cities now that Indiana has capped property tax rates.
For now, the city gets no tax revenue from the fire station, Barton Towers or the former bottling plant because the properties are held by branches of government. So, in the long term, any commercial or residential development that occurs because of TIF will help the city's finances.
It's important for Mass Ave, the rest of Downtown and the entire city that the proposed developments be allowed to move forward without further delay.
I'm all for new development that is needed, but I think this argument that public subsidies have to be handed out every time someone wants to develop a piece of land downtown has just about been worn out. Downtown is one of the most vibrant areas of the city. Without any public subsidies, Mass Avenue has been completely transformed over the past couple of decades. This is a case where developers want to access public money to invest in an already successfully developed area. TIF districts were never intended to be used in such areas. The idea was to use TIF districts as an economic development tool to develop blighted areas. This is not a blighted area, and it does not need public subsidies to make development possible. The council should not take more tax revenues off the tax rolls and divert them to a slush fund controlled by the mayor. I hope the Democrats hold firm in their opposition to this expansion, but I doubt they will.


Had Enough Indy? said...

There are so many questions about this proposed expansion of the Downtown TIF. There is almost no information available - much less information that justifies government subsidies for this area.

I am stunned that the Star Editorial board would say that haste was needed before we have any criteria in place to evaluate the project and TIF.

Gary R. Welsh said...

They're clueless, Pat. Now that Mass Avenue is hot, all of the developers in town have their eyes on it. They can get financing for their projects without public assistance, but they know that Ballard will give them tens of millions of dollars for their projects as long as they continue to put money in his campaign account and pay for all of his overseas junkets for him and his wife.