[Electronic-lan] CC Study Session Tuesday: Update on downtown grocery store

[Diane Stoddard]

Mr. Heckler, I just wanted to add that the City’s economic development policy relating to TIF- which is located on page 29 of the link below, does require a “but for” analysis and a feasibility analysis.  That section of the policy also outlines TIF goals and other matters.  The city’s economic development policy was extensively reviewed and approved at the beginning of the year.   All economic development incentives also require performance agreements, which the City regular monitors for compliance and reports in the annual economic development reports.  A link to those reports is also provided below.  Please let me know if I can answer questions.

Economic Development Policy:
https://assets.lawrenceks.org/assets/ecodev/ed-policy-2017-01-15.pdf

Economic Development Annual Reports:
https://lawrenceks.org/ed/


Thanks, Diane

[signature]

Diane Stoddard, Assistant City Manager – dstoddard at lawrenceks.org<mailto:dstoddard at lawrenceks.org>
City Manager’s Office | City of Lawrence, KS<http://www.lawrenceks.org/>
P.O Box 708, Lawrence, KS 66044
office (785) 832-3413| fax (785) 832-3405

From: Electronic-lan [mailto:electronic-lan-bounces at lists.ku.edu] On Behalf Of Richard Heckler via Electronic-lan
Sent: Saturday, December 09, 2017 12:03 AM
To: Melinda <melin at sunflower.com>; LAN Email List <electronic-lan at lists.ku.edu>; electronic-lan at lists.ku.edu
Subject: Re: [Electronic-lan] CC Study Session Tuesday: Update on downtown grocery store

Food for thought:

TIF Accountability and outcomes
Many proponents of TIF argue that improvements made under the program “pay for themselves.” That is, cities and towns assume that TIF will spur new development, increase property values, and create new tax revenue that would not have existed otherwise, which will be used to pay off the costs of the development.
This is a risky wager since it assumes that “but for” the TIF, no development would have occurred in the TIF district and property values would have remained unchanged. In reality, it is impossible to know whether a project will successfully generate the anticipated tax increases. It is also difficult to determine whether property value increases that do occur in TIF districts were exclusively the result of the TIF.
The “but for” provision in many TIF laws has already been weakened to allow TIF to be used on almost any project. In most states, TIF was originally intended for use only in areas deemed “blighted” or “distressed” where investment would not otherwise occur. Many states have since loosened their TIF criteria to allow TIF to be used to develop non-blighted and affluent neighborhoods (see Good Jobs First's report Straying from Good Intentions<http://www.goodjobsfirst.org/sites/default/files/docs/pdf/straying.pdf> on the weakening of TIF and enterprise zone requirements).
In the end, the “but for” provisions of state TIF laws often fall by the wayside, allowing TIF to finance development that would happen anyway. This results in a loss of revenue that could have gone to pay for schools and local services. Given that the diversion of taxes continues until the TIF district expires, which is typically 7 to 30 years, the long-term fiscal impact can be quite significant.
. Every TIF agreement should also contain a clawback clause requiring developers to pay back all or part of the subsidy if they fail to meet their job, wage, and other responsibilities.
https://www.goodjobsfirst.org/accountable-development/tax-increment-financing

“Wait a minute!  I’m paying taxes so that the Walton family, the richest family in America, can be richer?  I’m paying taxes so the Cabelas out in Nebraska or Johnny Morris who owns Bass Pro can get richer?  That’s what my taxes are going for?  That I am forced to pay?”  People don’t know about it.  That’s the only reason this goes on everywhere.
http://prairieweather.typepad.com/the_scribe/2008/01/free-lunch-davi.html

Well, what is tax increment financing? I’ll tell you what it is. You go to the store with your goods, you pay for it at Wal-Mart, and there’s a very good chance that that store has made a deal with the government that the sales taxes you are required to pay, that government requires you to pay, never go to the government. Instead, those sales taxes are used to pay the cost of the store. And typically in those deals, the project is tax exempt, just like a church.

https://www.democracynow.org/2008/1/18/free_lunch_how_the_wealthiest_americans


On Friday, December 8, 2017 6:27 PM, Melinda via Electronic-lan <electronic-lan at lists.ku.edu<mailto:electronic-lan at lists.ku.edu>> wrote:

https://assets.lawrenceks.org/assets/agendas/cc/2017/12-12-17/grocery-store-project-staff-memo.html
After reading this, I'm pretty sure I won't live to see this happen. If it ever does.
...Melin
--
"The first lesson to be learned by every citizen who desires to bring about a higher life in our American cities is that he must take an active part in managing the affairs of his own city."
--Theodore Roosevelt, The Outlook Magazine, Dec 21, 1895
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