TIFs

We would accrue more property taxes if Sioux Steel project doesn’t receive TIF

l3wis January 9, 2020 6Comments

We have heard the argument already, if we give the $21.5 million dollar TIF the property will have a tax worth of $1.6 million a year. But folks those tax payments don’t occur until 20 years from now as Joe Sneve’s story pointed out.

So if we give them the TIF, for the next 20 years they will be paying $56K a year. So in 20 years they will be paying a total of $1.12 million in taxes for a $185 million dollar facility. Hardly anything.

BUT, if we don’t give them the TIF, the value of the project would be approximately $163.5 million (flat parking lot) with an annual tax bill that they must pay on day one of about $1.4 million a year with no rebate, a value of $28 million in collected taxes in 20 years.

Common sense would tell us that getting $28 million over the next 20 years in property taxes as opposed to $1.12 is a better deal for city coffers.

Also look at the economic impact argument. They said they would have to forgo the parking ramp if they don’t get the TIF. How many jobs does a parking ramp provide? ZERO. Whether they build flat parking or a ramp, there really isn’t a economic impact either way.

Not only could this project still be successful without the TIF, the property tax revenue is over 20X more if we forgo the TIF. On top of that, the owner and developer of this project could sell at the end of TIF and get all the benefits of the tax rebate without ever paying a 100% of the tax bill. It is a windfall for them, and little else.

Not sure who is doing the math at the Planning Department, but this TIF is anything but an economic impact. They will be voting on the first hurdle tonight at the 6 PM Planning meeting.

Sioux Falls Planning Department explains Sioux Steel TIF

l3wis December 21, 2019 2Comments

Dustin does a nice job of explaining the proposed TIF. While I disagree with ‘editorilizing’ the proposal, at least he does explain it in detail. I believe the TIF will pass 8-0. I don’t think one single councilor has the appetite to vote against it. What I do hope though is they negotiate a better deal for the taxpayers. I would really like to see the parking ramp FREE 24/7 not just at nights and weekends (unless you are using a valet service from the hotel/convention center). I would also like to see a non-compete clause with the CVB when it comes to the kind of conventions they book there. We are really cutting the private developer a ‘blank’ check’ worth well over $30 million (TIF + BID + River Greenway). I also struggle with the $25 million dollar yearly economic impact. Whether the place gets built or not, people still have other places to stay downtown, eat downtown and park downtown. That money is being spent already with or without this project. All they are saying is that money is being re-directed to their site from other competition that already exists in Sioux Falls and Downtown.