Tax Increment Financing (TIF)

[ChiefJoJo]

Since the North Hills East discussion has prompted extraneous conversations about TIF, and how it should be used, I'm starting a new topic. If you want to discuss how TIF relates to the NHE project, feel free to continue to discuss it there. This topic will be for general discussion of how the tool should be used.

I haven't done a lot of research on the topic, so I'll leave you with the wikipedia page for more info.

My personal opinion is TIF should be used primarily to stimulate or 'kick-start' economic growth and development in an area where growth would not otherwise occur, TIF should be limited in it's frequency of use, should have clearly defined financials, and that any project should meet high-level criteria (LEED, etc) and be able to show significant public benefits. The primary areas where I see the most benefit would be for developing transit (TODs), parks, or other public facilities where significant tax value growth is created.

Areas where I think it might be appropriate: TTA rail (Cherokee?), Dix Park, certain areas of E Durham & SE Raleigh, and Hillsborough Street.

[DB78]

Since, the North Hills East discussion has prompted extraneous conversations about TIF, and how it should be used, I'm starting a new topic. If you want to discuss how TIF relates to the NHE project, feel free to continue to discuss it there. This topic will be for general discussion of how the tool should be used.

I haven't done a lot of research on the topic, so I'll leave you with the wikipedia page for more info.

My personal opinion is TIF should be used primarily to stimulate or 'kick-start' economic growth and development in an area where growth would not otherwise occur, TIF should be limited in it's frequency of use, should have clearly defined financials, and that any project should meet high-level criteria (LEED, etc) and be able to show significant public benefits. The primary areas where I see the most benefit would be for developing transit (TODs), parks, or other public facilities where significant tax value growth is created.

Areas where I think it might be appropriate: TTA rail (Cherokee?), Dix Park, certain areas of E Durham & SE Raleigh, and Hillsborough Street.

[cthayes75]

I'm more of a free-market fundamentalist, so I don't think TIFs should be used at all for private companies.

The only place I'm open to them is using TIFs to build schools in new developments.

For example, say someone wants to build a development like Wakefield or Heritage, use TIF to pay for the cost of the new schools that the new houses will require. Thus, growth pays for growth.

[Jones_]

The first step is to establish clear criteria, whatever those are, for how one qualifies for TIF. Likely an application of some sort where certain minimum standards must be met. If many more people seek TIF than the city wants to give out in a year then you could rank applications against each other with weight given to economic need of the area in which one is proposed.....whatever the parameters established.....you have to have something before you start handing out this special deal willy nilly....you are giving back someones tax money to pay for what they just built....you need a standard way in which to do this.....

[ncwebguy]

TIFs should be used to right the wrongs of the past where the free market will *never* "do its magic". This would include

- environmental sins -- brownfield site/building remediation. The free market would put a fence around it and develop the next block over, but a quality infill project can increase the tax base without having to annex more land.

and

- political sins -- neglecting infrastructure, police, and other community needs. The free market says build further and further out where land is cheap, but that leaves a lot of good land (a lot of East Raleigh inside the beltline) underutilized because it wasn't near a 40/440 exit or any good connector roads. To say nothing of parks, housing code inspections, etc.

TTA could be a remedy for both of these -- cleanup of abandoned industiral space along the tracks *and* to undo the harm of dismantling Raleigh's trolley system. What would Raleigh be like if Cameron Village was between Hillsborough and the train tracks just east of Pullen Park, instead of clear cutting the forest that was on its current site? If North Hills Mall was near a station on the train tracks that run between Wake Forest Road and Atlantic? NC State students taking the train to downtown to shop at Hudson Belk and/or catch a movie. Or catch the train going the other way to their internship at a more transit-oriented RTP. Or a Durham Bulls game.

The school financing could be better served by an impact fee than TIF. Otherwise it might as well be a private school paid for by tax revenue that othewise would have gone to fund other projects. Should a TIF be offered to build a community pool and clubhouse? They'll be able to charge more for the houses, and in 30 years, the county will get have a slightly higher revenue base *if* the area maintains high valuations. And the general public will *never* benefit.

This "if" (and the numbers being thrown around) is why North Hills East's TIF as it stands now is a bad idea. There is no guarantee of future tax revenues meeting Kane's predictions, and there is no public benefit to providing free parking for offices and shops.

The Wake County board of commissioners have set a bad precedent -- if you want a TIF, ask for it! Then in small print like an ad for some new wonder drug, "TIFs only available to developers with deep pockets willing to build in thriving neighborhoods. If your area has been neglected for decades, consult someone else who might care."

[Gard]

My opinion on TIF is pretty much that same as Cheif's. Use it to jumpstart redevelopment in blighted areas and others that are in trouble, as well as to build up areas around potential regional rail stations, but don't use it for such projects as NHE, which would do nothing more than help line Kanes pockets even more.