May 2016

A Journal Star article dated March 4, concerning the proposed Trinitas Ventures 172-unit living complex, states that the “developer is not asking the city for tax incentives to build the complex, but it has agreed to partner with the city to use (TIF) … to pay for parking improvements.” Neb. Rev. Stat. 18-2116 is clear that projects cannot be approved unless it is demonstrated that they will not occur or be economically feasible in the blighted and substandard redevelopment area without TIF financing.

A story on Aug. 10, 2014, in the Journal Star details another instance where the developer Ploughshare Brewing Company did not ask for TIF; the story states “an unusual situation because the financing wasn’t requested by a private developer. Instead, the city pitched the deal to Ploughshare … over the spring, after work had already begun on its new brewery.” Clearly, these projects do not pass the litmus test of the above statute.

Remember the back and forth on Washington Square’s proposed TIF? While the city and developer claim the TIF will be used mostly for utility and parking, it doesn’t change the fact that luxury condos will be sitting on top of those utility and parking upgrades. Hardly ‘blight’.

The law is clear — those incremental property taxes from “the” project must “be used solely to pay” the bonded indebtedness of the project and “(w)hen such … indebtedness, including interest … ha(s) been paid,” such property thereafter shall be taxed as is other property in the respective taxing districts. There is no justification for “leftover (TIF)  funds” in TIF-related law. Once the projects mentioned in the article (Centennial Mall, Gold’s Building, etc.) generate enough funds to pay off the bond debt, the $5.6 million of property taxes should be returned to the public schools, county and other taxing entities.

Not sure how much different it is in South Dakota, but I will say that some of the same principals apply. Once a TIF runs out, the property owner must start paying what the property is really worth. Ironically, by that time, the ownership of the property will probably not be in the hands of the current developers and investors, who walked away with a pretty penny on their investments, at a cost to our public education system and other government entities (remember, we just passed a 1/2 cent sales tax increase, on things like food, clothing and utilities to pay teachers more, because we are short on education funding-we have a over a half-billion sitting in education investment funds-then we turn around and give property tax breaks to developers who build luxury condos).

I’m opposed to ALL TIF’s, but specifically the current ones we have been handing out, that have NO direct benefit to the public and rob our education funding.