Sat
Feb 29 2020
02:56:pm

Today's Daily Times front page headline declares "Alcoa commission votes to approve new industrial zone for Springbrook Farm."

Uh, no, it's not an industrial zone. They aren't planning manufacturing or other factory type businesses for the site. At least not that we know of.

What they did was establish a "Central Business Improvement Distict," or CBID. Under state law, this gives the city broad powers to develop the site and to issue bonds or assess (or forgive) taxes to pay for it.

The article mentions "TIFF ... or tax income financing arrangements." The correct term is TIF, or Tax Increment Financing. Under state law, this allows the city development board to borrow money on behalf of a developer to make improvements (like a hotel or a grocery store). The debt is paid back over many years from the difference (increment) in the property taxes before and after the improvement. Officials argue that the project wouldn't be feasible "but-for" the TIF, therefore the incremental revenue wouldn't have occurred otherwise.

It's like free money! For developers. Taxpayers ultimately pay for it in terms of deferred tax revenues. Plus, there's an associated increase in demand for city services (and debt) and taxes to pay for it are used to pay off the developer's debt instead.

This is not necessarily a bad thing. The "but-for" requirement makes otherwise economically challenged projects feasible and, in theory, enhance the community and, eventually, hopefully, generate new tax revenues.

The paper doesn't fully explain why this particular plot needs government/taxpayer financial aid to be economically feasible. What's under that concrete that has to be removed? All these complex plans and funding schemes seem like overkill just to dig up some concrete. In fact, who is paying for the infrastructure and environmental remediation already done at the site? Recent property tax increases probably had nothing to do with that. Right?

Anyway, this is a lot of complicated mumbo jumbo and the Daily Times doesn't feel it necessary to ask or explain. All you need to know is what the city officials tell their reporters, which the reporters duly transcribe. And what they tell reporters is that everything's fine. Trust us.

Oh, and their reporters are prone to throw in a little editorial opinion disguised as "news reporting." The article states without any attribution that "Springbrook Farm’s advance is significant for the city, a milestone in its future commercial hopes, fiscal plans and even its infrastructure strategies."

OK, then. Let's hope everything works out and the city isn't plunged further into debt and we don't have any more surprise property tax increases.

UPDATE: The online article headline was corrected, as was the spelling (but not the definition) of TIF.

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