TIFs

Several Reasons why the Sioux Steel TIF should be voted down

l3wis January 22, 2020 6Comments

Last night at the Sioux Falls City Council meeting it was the first reading of the Sioux Steel TIF proposal (2^nd reading is on  February 3^rd). I spoke for my whopping 3 minutes about why it is a bad idea, I was able to run thru these points (FF video to 1:30)

• Planning Staff (Public employees) SHOULD not be recommending tax cuts or rebates to publicly elected officials (city councilors). While it is their job to lay out the pros and cons and basic criteria, employee salaries funded by our tax dollars should not be cheerleaders for private business. It goes against our free enterprise system and frankly is unethical.

• The property does not provide affordable housing OR clean up blight (The blight that does exist on the property is from the current property owner who is going to redevelop the property). We have known about environmental issues with this kind of manufacturing since the 1960’s. We were not born yesterday, you blighted this land, it is your responsibility to clean it up.

• Very little new economic growth will be produced, it will only be diverting development from other parts of the city, as well as diverting lodging from other parts of downtown. We know that over the past 5-6 years the city has seen a decrease in lodging taxes and stays do to a popularity in Air BNB, and the fact that people are not spending the night in Sioux Falls. The Events Center is a great example of how NEW economic growth and taxes will not come rolling in due to this project. In fact it competes with our current taxpayer subsidized convention center. Since the EC has been in existence, sales tax revenue has been at it’s normal snail pace until last year.

• We really don’t need more parking ramps downtown. We already have one waiting for a hotel to be built on top of it. Why are we not focusing on fixing that fiasco?

• The 20 year TIF will only produce $1.1 million in property taxes. If we forgo the tax and the project is scaled back, we would bring in around $10 million in the same time period. And if we also forgo the river greenway improvements of $10 million and just gift the development the property, it would be a $20 million dollar windfall for taxpayers instead of $1.1 million. I actually believe the development is bluffing about scaling it back, they would find the financing elsewhere, and even if they canceled the whole project (which I think they won’t) it wouldn’t harm us one bit.

• Most of the jobs created by the project will be hospitality, most of which are part-time and with few benefits.

• THERE HAS NEVER BEEN AN ACTUAL TIF ECONOMIC IMPACT STUDY IN SIOUX FALLS. This is one of the main reasons why this should be voted down. A comprehensive study would show us that there has been very little economic impact to citizens, in fact, it has probably forced individual property owners to pay higher taxes.

TIFs that don’t address real blight and affordable housing are really only a handout. It is unfortunate that the public is very ignorant about TIFs and the effect it has on their personal taxes while providing very little benefits. I can’t blame the developers for asking for this. What if your banker said to you one day, “There is this tax incentive program that will refund your property taxes for 20 years so you can improve your personal property.” Wouldn’t you jump at it? I would. Damn right I would. This is why I have argued to any city official that would listen for well over a decade that TIFs should be used to cleanup personal properties in low income working class neighborhoods instead, this would be real economic impact to the residents of Sioux Falls. But, hey, shiny things are fun to look at when the business elite are laughing all the way to the bank.