Entries Tagged 'TIFs' ↓

Further proof TIFs produce NO economic growth

Once again, we are probably going to break building permit records;

With one month left in the year, the valuation of building permits in Sioux Falls is $4 million shy of the 2017 record.

Permits through November totaled just less than $735 million. At the same time in 2017, it was $663 million. That year ended with a total of $739 million. In 2016, the total was $702 million, which also was a record.

As I have pointed out, further proof that the development community doesn’t need tax incentives like TIFs, they are flourishing on their own. Some would even argue our fast growth may hurt us in the long run.

So another TIF study, this time in Missouri (St. Louis and Kansas City) shows there is very little economic impact from TIFs;

Overall, the analysis conducted in this study finds no support for the claim that TIF generated tangible economic development benefits in either Kansas City or Saint Louis. In other words, we do not find evidence that the use of TIF generated economic development opportunities that would not have arisen in the absence of TIF.

This article I think says it best;

Until cities and states adopt meaningful reforms, we can expect developers to continue asking for taxpayer subsidies whether the need is real or imagined. And as long as politicians are willing to oblige the developers, taxpayers will be all the poorer.

I couldn’t agree more.

More reasons why we don’t need TIFs

There was a couple of stories today that show when developers in the Sioux Falls area want something, they suddenly have the money to pony up.

First the 85th exchange;

The project got through the IJR at the speed it did because the area landowners upfronted the money to pay privately for the report to be compiled.

They are committed to investing $4 million to get the project through federal approvals and initial design.

“You have a consolidated group of motivated businesspeople who own a massive piece of ground that’s going to open for commercial development,” said Jake Quasney, vice president of real estate and investments at Lloyd Cos.

Isn’t it funny, when there are millions to be made, the developers have all kinds of upfront cash to get what they want done and pushed through.

Just look at Journey’s $1 million land ‘Donation’ to the SFSD;

The district’s school board made the decision Wednesday for about $4.3 million and accept a $1 million donation from the company, bringing the total cost closer to $3.3 million.

Was this a ‘donation’ or just incentive to secure building a $90 million dollar High School (and possibly other facilities?).

With record building permits again this year, and all this CAPITAL the developers have to help secure future projects, one has to wonder if TIFs are even needed anymore in Sioux Falls?

Short answer; NO.

The ‘Tifilicious’ Media Tour continues

You mean when manufacturing dumps on land for over 100 years there will have to be soil cleanup? Who knew!?

And after breaking ground, Quasney said it quickly became clear why the site qualified for some assistance.

“We are probably three months behind from where we’d really like to be,” Quasney said. “Most of that was associated with site remediation specific to petroleum on the site.”

We have known for well over 15 years this area would need major cleanup. I have said all along instead of giving TIFs the city could have budgeted over the past 15 years to cleanup the site for developers and sell it as a ‘clean site’. While I think there would have been some costs for SF taxpayers, I think the city could have applied for EPA Federal grants and even state funds to clean up the site. I think in the long run we could have sold the site as a clean site ready for development and would not have had to give millions in TIF tax rebates. TIFs are a scam, and the city continues to throw theses stories out to the media to make it look like they are needed. They are NOT, there are other options.

Record Building Permits only prove TIF’s are NOT needed

Here we go again, record growth and record building permits;

The city of Sioux Falls has surpassed $700 million in building activity through October, continuing a record-setting pace.

In the first 10 months of the year, the city has issued $701.3 million in building permits, up from $624.6 million for the same period in 2017.

The record for building activity was set last year at almost $739.3 million.

It is further proof that developers in Sioux Falls don’t need incentives like TIF’s, which are gigantic, long term, tax rebates. If anything, with this kind of growth, we should be raising fees and taxes on developers and putting that money towards technical education or better yet tax cuts for the rest of us stiffs.

Just a thought.

UPDATE: Mayor TenHaken getting closer to the Dawn of the TIFs

So he makes this announcement today;

“Taking care of citizens is job number one for the City,” said Mayor Paul TenHaken. “Our economic and workforce growth is dependent upon a healthy construction and housing industry, and this reorganization will help industry thrive as well as our citizens who are the housing consumers in Sioux Falls.”

In other words get ready for TIFiliscious 2.0. They are trying to slowly smooth us into this. But as I have said about city government many times, it is extremely predictable.

I asked a city councilor when this press release came out at 4:50 PM today if they knew about the reorganization. You know the answer.

UPDATE: I also find this video below of Dusty Johnson talking about ‘welfare’ while the company he works for took a ‘corporate welfare’ in TIFs. So it is OK for YOUR parents to take welfare, and it is okay for YOUR company to take welfare, but gosh darn it, you are going to crack down on all the other people? It reminds of Leslee Unruh who had an abortion but doesn’t want anyone else to have that right.

Republicans; Do as I say, NOT as I do.

UPDATE: Is the TenHaken Administration getting ready to get ‘TIFaliscious’?

Well, that wasn’t to tough, they got Brian Allen at KSFY to roll over and talk about how great TIFs are. Funny, the important part missing from Allen’s story, the actual economic impact;

A KSFY review of active Tax Increment Financing projects in Iowa, Minnesota and South Dakota shows there is a dramatic drop-off in TIF usage.

You know why? Because several studies have been done showing they have very little economic impact. I also find if comical that Allen only interviewed PRO TIF folks and NO one who is against them. I also like how some in the interview talk about how South Dakota does them ‘different’. Good stuff. Yet there has been NO extensive study done in South Dakota showing the actual economic impact of them. Why? Because the results would be grim.

What other people don’t realize is that when we give wealthy developers TIFs we all pay more in property taxes to supplement them to fund things like our counties, cities and public education.

I think the TenHaken administration is gearing up to start handing them out, literally like candy. His COS, Beck, wrote the Sanford Sports Complex TIF while working for the city (the largest in state history) and she also wrote the most recent one while working for Lloyd Companies for the Cascade project that is mostly marketplace apartments.

Tonight the city is hiring a finance director who worked for the Costello Companies (a major developer in SF) who is also an expert in TIFs.

It is pretty clear to me they are getting us prepped and they are probably chiding our local media behind the scenes to talk about the ‘positivity’ of TIFs.

Let’s face it, they are simply a tax rebate for private developers who could easily pay the taxes with or without the TIF. We don’t have a growth problem in Sioux Falls. In fact we are developing so much and building so fast we can’t hire people fast enough. The city council even gave SE Tech $100K for more job training programs. This tells me we don’t need to be subsidizing growth and development in Sioux Falls, it actually tells me we need to find ways to slow this growth and concentrate on SMART-STEADY growth not FAST URBAN SPRAWL.

The TIF model in itself isn’t a bad idea, but I think it should be applied to cleaning up neighborhoods. Giving tax rebates to single family homeowners and small apartment owners to clean up the neighborhoods would be a better approach, and it would be a visible economic impact. When individuals have to spend less on taxes and divert that money to improving their properties and lives that means they spend more money on other things that help with sales tax revenue that truly impacts our community. Businesses who use TIFs to expand their businesses don’t pay sales taxes, they just collect them. Give the rebates to individuals who will actually use them to improve lives and contribute to sales tax revenue.

Let’s face it, TIFs right now are truly ‘Corporate Welfare’ and not much else.

UPDATE: Did anyone catch Dusty Johnson in the interview? Mr. Fiscal Conservative ANTI-WELFARE wants to raise the Social Security age gladly preaching the ‘WINS’ about TIFs? We know exactly what Dusty would do in Congress, handout to big business while stepping on the little guy. If I was the Bjorkman campaign I would be clipping this little piece of corporate welfare pie for a future TV commercial.

UPDATE: TIF History Presentation

FF 1:38:15 – To watch my RANT on TIFs

There will be a presentation at the Sioux Falls City Council informational meeting at 4 PM on TIF History in Sioux Falls (DOC: TIF-History-SF )

You will notice that the mention of blighted property or affordable workforce housing isn’t even mentioned anymore (the original reason TIFs were used). Know they are being used for Market Rate housing, retail and even multi-million dollar condos at Washington Square.

While I do understand the increased value AFTER the TIF’s mature, some of them won’t mature for another 10-14 years.

We really need to get back to the original purpose of TIF’s or stop granting them. I think developers do very well in Sioux Falls, which is awesome, we certainly don’t need to subsidize developers with property tax rebates especially when we are talking out bonds for jails, schools and water plants. It’s very fiscally irresponsible for us to be handing out property tax rebates to wealthy developers when we are taking out over a HALF-BILLION in bonds.

UPDATE: Sioux Falls City Council to Dissolve TWO TIF’s on Tuesday

UPDATE: It seems they are moving forward with a ‘Market Rate’ apartment project and this is why the TIF is being dissolved. Funny how a TIF is now not needed since they are going to build apartments that they can charge whatever for rent. Further proof all TIFs are is developer welfare.

Many people have been asking about a supposed project North of Sunshine Grocery Downtown that received a TIF and why it hasn’t proceeded.

It seems that TenHaken administration is taking action by asking through resolution to have the council dissolve that TIF and the TIF that COSTCO never accepted. As I understand it, Norm Drake from Legacy is somehow involved with the Downtown TIF (part of it is where the current temporary dog park is located) and COSTCO opposed their TIF from the beginning because they don’t like how TIFs take from public education funding.

As I have been saying about the $190 million dollar bond issue, why are we borrowing so much on the backs of homeowners while wealthy developers are getting tax rebates? Just another reason why the Bond issue AND TIFs are flawed.

Council Agenda Items #46-47

Details Below;

Anti-Citizen (Municipal) League continues to lobby against our best interests

The taxpayer funded legislative lobbyist Muni-League decided to rear their head again with the city council’s supposed ‘legislative’ priorities (Item #15). But some councilors weren’t buying it. Stehly had an issue with TIFs, some wondered how the county’s priorities got mixed in with it, and councilor Brekke was curious when they even talked about it.

The rumor going around is that a couple of councilors met with Minnehaha County Chair, Heiberger and cooked this up with the help of the Muni-League.

And let’s talk about them. We pay them to lobby for higher taxes (they continually try to sucker the legislature into letting cities raise an extra penny tax for ‘special projects’ with a sunset clause. NO taxes ever ‘sunset’. Once implemented, they are there forever. Look at the 3rd penny entertainment tax in SF for paying off Pavilion bonds. That tax was supposed to sunset after the bonds were paid off. That was 4-5 years ago. Still exists. They also support TIF’s which are nothing more than a tax rebate/welfare program for developers. Most times they have little to NO economic impact except raising property taxes on the rest of us.

It’s time the city cuts ties with the Muni-League. The Sioux Falls city council already has a legislative director/operations manager that makes close to $100K a year. The council praises his hard work, and he is very capable of lobbying for the city. As taxpayers we don’t need to pay another lobbyist to lobby against our interests.

State’s report on TIFs lacks ‘economic impact’ data

Maybe it isn’t in the report, because there is very little economic impact from TIFs, they NEVER pay for themselves in JOBS created and take money from school funding, something we need in SF instead of bonding.

As you can see from the Sioux Falls TIFs a lot tax rebates with little evidence of a benefit to the public; 2017TIFAnnualReport-SF

Here is the entire statewide report; 2017TIFAnnualReport

As you can see, a lot of property tax revenue being given to wealthy developers in the guise of ‘economic development’. If TIF’s truly worked, why not give them to EVERY developer? It’s a sad day when the school district has to have a bond vote when they could easily pay down the bonds with property tax revenue that wasn’t tied up into TIFs.