Letters to the Editor

TIF ‘tool’

February 7, 2008

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To the editor:

What does the public know about tax increment financing? This subsidy is being labeled by the city as one of the "tools in our toolbox" to encourage economic development. It is vital that we have community awareness and participation in our policy development regarding its usage.

Next Tuesday, the City Commission will be deciding on the use of the TIF subsidy for the Oread Inn Hotel. To forfeit up to $11 million of tax revenue for this project without a sound city policy on this type of financing is irresponsible and unethical. This developer-driven process has lacked transparency and does not allow for adequate public participation.

This type of public investment requires a thorough cost-benefit analysis to help ensure that we will be gaining more than we are giving up. It is the duty of the City Commission to adhere to the needs of its citizens and NOT to the timeline constructed by the developers.

This Saturday the Lawrence Townsite Alliance is hosting a public forum at the Lawrence Public Library from 10 a.m. to noon. Whether your concerns are aesthetic or financial, the public is invited to attend and voice their opinion. The recent tension between the city and USD 497 over tax hikes should only highlight the need to examine the city's role in giving away tax revenue in the name of "economic development." Before voicing opposition to increased property taxes, look at the future city, county, and USD 497 revenues that will be diverted to private developments - without your vote.

Dacia McCabe Maher,

Lawrence

Comments

salad 7 years, 2 months ago

David Kay Johnston has a new book about tax law that goes into TIF's in depth. He was on NPR two weeks ago and explained that when a developer or retailer gets a TIF, that WE still pay sales tax at the business, but the sales tax now goes to the developer!!! The city gets nothing for the duration of the TIF, but must still provide services (fire, police, etc..) to the business. Usually the developer/retailer will use the threat of going down the road to the next city to build unless they get the TIF. In Lawrence, a TIF is pure insanity...I mean, where they gonna go build their hotel? Eudora? Make em pay, and ditch the TIF, which is bad for ANY city.

Marcy McGuffie 7 years, 2 months ago

Well, it's obvious that the city has no problem spending our hard earned dollars on ridiculous projects. Do we really need this fancy hotel? Well, if the developers want to take risks out of their own pockets - fine. The city has no business using our money to finance it. We do still live in a capitalistic society, correct?

From reading the ljworld forums for sometime, I realize there is strong opposition to some of the crap going on with our city's finances. Money is too tight to be throwing it at the big developers. So, I advise people to get off their butts and stop gritching online and actually get out there and make voices be heard!

Saturday morning at the library seems like a decent place to start. I'm sure there is a petition to sign, too...

rumor_man 7 years, 2 months ago

Don't forget that Cool is an architect that is just ticked because he wasn't hired by the Fritzel family and therefore holds a grudge against anything that they're involved in...

Marcy McGuffie 7 years, 2 months ago

rumor_man (Anonymous) says:

Don't forget that Cool is an architect that is just ticked because he wasn't hired by the Fritzel family and therefore holds a grudge against anything that they're involved in:


Dude, your name is rumor_man. Is this a fact, or a rumor you refer to?

Well, just to let you know, I have no involvement with the Fritzel family...that doesn't stop me from thinking something stinks.

rumor_man 7 years, 2 months ago

beatle919 (Marcy McGuffie),

It's all done tongue in cheek.

I find it funny that Cool's an architect that has posted the same comments hundreds of times on this subject.

I truly hope it gets built but that the Fritzel family finds funding on their own, not from the city.

But I can see why they are asking the city...everyone else does...enough is enough.

BalkansHawk 7 years, 2 months ago

If there is a petition, will a citizen/resident of Lawrence have an avenue to sign it (say an online option) even if they are out of the country and have no direct access to the petition?

rumor_man 7 years, 2 months ago

Cool is also an architect that never graduated from architecture school. (not a rumor)

rumor_man 7 years, 2 months ago

Sven aka Cool,

But it says here that you graduated from KU in 1975.

http://www.dreamgreenhomes.com/aboutus/p...

Is this true? Yes or no.

Thanks, Rumor_Man

Dacia McCabe Maher 7 years, 2 months ago

rumor_man (Anonymous):

If you would like to support the project or the investors wanting to make money off of the project, then that's just great. Do it.

Please quit trying to squabble with other posters. It's a pathetic attempt to take the focus off of community discussion (aka: disgust) about a public tax subsidy for private development.

Also, feel free to attend the meeting if you have ANYTHING of value to say about the TIF. If you are only interested in petty bickering to deflect the focus off of the real issues, then no thanks. Have a great day Mr. Anonymous.

rumor_man 7 years, 2 months ago

....my plan has worked for the day...good bye...

KU_cynic 7 years, 2 months ago

When the value of my home goes up after I put in a new deck, some landscaping, and new windows I want my assessed value frozen at the pre-improvement value. Afterall, all these repairs and improvements generate economic activity in the city and enhance the appearance and value of my home and consequently my neighborhood. Yeah, I'll pocket some of the value of the improvments when I sell my home (eventually), but why shouldn't I enjoy the fruits of my investment.

EXACT SAME LOGIC AS TIF. WHY NOT FOR ME?

Marcy McGuffie 7 years, 2 months ago

offtotheright (Anonymous) says: It's going to be built, and with a TIF. I can't wait!


Seriously?

I have no problem with it being built, but I have a huge problem with the TIF. If these guys want to build it the old fashioned capitalistic way, that's fine. Build it, see if the customers come. Thrive or die out. That's what this country is supposed to be about!

Why exactly would you want the TIF? I'm curious, what's your interest in this?

blessed3x 7 years, 2 months ago

Salad said...

"Make em pay, and ditch the TIF, which is bad for ANY city."

I beg to differ. I have seen many TIF programs implemented in the KCK area and while, sure, the developer gets a great deal, the city also ended up taking blighted crime ridden areas to areas that are producing tax income, creating jobs and building safer areas within the city. And after all the tax break is only temporary.

Marcy McGuffie 7 years, 2 months ago

"Private money is ignoring Lawrence. Local money isn't as rich as everyone thinks!"

Curious. You're correct in that local money isn't as rich as everyone thinks. We, Lawrence, don't have the money to be throwing at the developers! Can someone show me where the numbers add up that by using the TIF, it will actually benefit our town? Maybe they need more financial backing from the banks, just like anyone else wanting to build a business. Let the banks take the risk - not the taxpayers! Oh, that's right...banks aren't doing too well right now because they've overextended themselves, lending money to builders...

I dunno...the risk seems to great for US to have to pay.

Marcy McGuffie 7 years, 2 months ago

rumor_man -

What plan for the day is this that you speak of? Unless I read incorrectly, you don't want the TIF to be used, but would like the hotel to be built. So, why all this "tongue-in-cheek" action? Do you enjoy chiding people for speaking their minds? I'm sincerely baffled why you have such a hard on for harassing a poster who feels passionately about something that you "sort of" agree with...

Enlighten me, please (as long as you don't feel the need to attack certain posters).

Dacia McCabe Maher 7 years, 2 months ago

BalkansHawk (Anonymous) says: "If there is a petition, will a citizen/resident of Lawrence have an avenue to sign it (say an online option) even if they are out of the country and have no direct access to the petition?"

No online options. There is a petition that has been circulated over the last month by a few people. It has no legal value. The city commission can and probably will completely ignore it. I was simply tired of hearing the proponents of this project and members of the city commission talk about how great this project is and how there has been widespread community support with very little opposition.

If this TIF passes, there will be a legal petition circulated in Lawrence. Possibly filing a K.S.A. 12-3013 initiative referenda petion, but we're still looking into our options. Thanks for your interest in this issue.

Richard Heckler 7 years, 2 months ago

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 kept by Wal-Mart and used to pay the cost of the store. And typically in those deals, the store is tax exempt, just like a church.

Now, there are two ways that it's important to think about this. One is, that means your kid's schools, your police department, your library, your parks are not getting that money. And you'll notice we keep saying we're starved for money. We're twice as wealthy as we were in 1980, but we've got to close hospitals, and we've got to close schools, and we don't have money for all sorts of things like after-school programs, even though we're twice as wealthy. The second thing to think about is, imagine that you own Amy Goodman's or Juan's department store across the street. You suddenly have to compete with people whom the government is giving a huge leg up on. You think you would go broke after a while? Well, in fact, you will.

And I tell about a man named Jim Weaknecht who owned a little store in the Poconos of Pennsylvania. He sold fishing tackle, hunting gear, stuff like that. And the way he made his living in his little tiny store, enough that he was able to have his wife stay at home and raise their three kids full time, was by charging less than a company called Cabela's. Well, then Cabela's came to town. This little city of 4,000 people made a deal to give Cabela's $36 million to build a store. That's more than the city budget for that town for ten years. It's $8,000 for every man, woman, and child in that town to have this store. And even though he charged lower prices, he was pretty quickly run out of business.

That's not market capitalism, which is what Ronald Reagan said he was going to bring us. He said, you know, government's the problem, we need markets as a solution. Well, that's not the market. That's corporate socialism. And what we've gotten is corporate socialism for the politically connected rich-not all the rich, the politically connected rich-and market capitalism for everybody else.

JUAN GONZALEZ: And, of course, many of those folks need lobbyists to be able to get these kinds of breaks from the government, and you talk about the explosion of lobbyists and their influence on government.

DAVID CAY JOHNSTON: There are twice as many registered lobbyists in Washington today as there were in 1980. If the lobbying community had grown in revenues since the '70s at the same rate as the economy, there would be one-tenth as many lobbyists in Washington. And those people are not there doing the good of the public. You know, the Constitution's Preamble talks about the-

Marcy McGuffie 7 years, 2 months ago

And since offtotheright has made yet another appearance, I would appreciate an answer to my question.

What is your interest in this? Why are you so pro-tif? Shouldn't a developer get funding from the banks to finance a private project? Why should we take the risk? Mostly, tifs are intended to be used to brighten up blighted areas, thus spurring further economic development in a neighborhood. That just doesn't fit in this case.

offtotheright, please answer me these two questions: 1. How is using TIF in this instance a good thing? 2. What are your interests/involvement in this case, that you are soooo hoping it happens?

Richard Heckler 7 years, 2 months ago

*Bring on Impact Fees!: Donovan Scruggs, Ocean Springs director of community development and planning, said the city's current budget. crunch can be tied directly to infrastructure expenses needed to serve new housing developments.

"If residential growth paid for itself and was financially positive, we would not be in a budget crunch," Scruggs said. "But with increased numbers of houses you have increased demand on services, and historically the funding of revenues generated by single-family housing does not pay for the services, they require from a municipality."

Scruggs said there have been two studies done on impact fees. One 100-page study was on services for police and fire protection, administration and parks. A second study was done on infrastructure related impacts on roads, water and water.

The current proposal calls for the fees to be collected separately.

"We want. to make sure we tie the fees as closely as possible to when the demand is being generated," Scruggs said. "Water and sewer fees would be collected when the subdivision is constructed. Services more related to occupancy and homes being constructed would be collected later. For example, no one will have a need for a park until there are kids in that neighborhood."

While developers pay for onsite water, sewer and road infrastructure, Scruggs said it is costly to pay for offsite upgrades needed, such as enlarging lift stations and raising water towers.

"Now if we have to upgrade a lift station, it is paid for by the general fund revenue paid by each taxpayer in the city," Scruggs said. "Someone on the west side of town would have to pay for subsidizing the growth in demand caused by the development in the east part of town."

The eastern part of town is where the greatest residential growth is being seen. Scruggs said there has been so much growth in recent years that the city has to elevate its water towers to keep pressure at adequate levels. "That was a direct result caused by the growth," he said.

Scruggs said that impact fees are legal if they are done properly.

"Madison's impact fee program had problems," Scruggs said. "Ours will not have those problems. It can be done right."

Ocean Springs had 120 homes constructed in 2000, 90 in 2001 and is on track to have 120 homes constructed in 2002. If impact fees had been collected on the 310 homes built in three years, the city would have extra revenues of about $2.1 million.

In order for the city to have orderly growth, developers need to be responsible for a certain amount of the infrastructure. Most builders understand impact fees are for a purpose that improves their development."

Godot 7 years, 2 months ago

TIF is not meant for situations like we have with Oread Inn. The area is not blighted.

It is disgusting to see the city fathers and mother embrace the idea of wrapping this project up as something that is worthy of TIF or even historic preservation. What a joke.

All of the funds being used, regardless of which "grant" or "tax forbearance" are yours, you, the taxpayer.

Someone mentioned that TIF worked well in Kansas City, Kansas.

That remains to be seen.

Who, of all who love Lawrence, would compare 12th & Indiana to 5th & Quindaro and say they require the same economic revitalization?

Emily Hadley 7 years, 2 months ago

"This Saturday the Lawrence Townsite Alliance is hosting a public forum at the Lawrence Public Library from 10 a.m. to noon"

I hope everyone who is concerned about this can come. Strength in numbers!

Marcy McGuffie 7 years, 2 months ago

"Now try to pretend you are really concerned about additional traffic destroying the ambiance of the neighborhood."

Oh max1...I used to teach reading. Do you need help with your comprehension??? Have I not stated again and again that I don't care if they build the friggin' hotel? I jdon't want my dollars financing it. Simple enough. If the developers can come up with the moola on their own...free enterprise, baby.

emilyhadley (Emily Hadley) says: "This Saturday the Lawrence Townsite Alliance is hosting a public forum at the Lawrence Public Library from 10 a.m. to noon"

I hope everyone who is concerned about this can come. Strength in numbers!


And, that is what this is truly about!

Marcy McGuffie 7 years, 2 months ago

max1 (Anonymous) says: "Oh max1:I used to teach reading." -beatle919

Well, aren't you special!


Thus, proving the fact that you lack comprehension. I don't appreciate idiots putting words in my mouth. Simple enough? Probably not, considering you don't actually read what people say.

Marcy McGuffie 7 years, 2 months ago

Um, yeah...I apologize for that last comment. I shouldn't give into those who chide because it's fun. I guess I'm just as guilty.

Anyway, I hope there's a good turnout at the library tomorrow.

Marcy McGuffie 7 years, 2 months ago

in to

oops - I wish we could edit our comments!

Marcy McGuffie 7 years, 2 months ago

not_dolph -

Nice way to contribute to conversation. Howzabout your reasons you think TIF is good? Seems a bit more mature than going around with a hard-on for one poster. I checked your comment history. In recent comments, you rarely actually contribute anything to a civilized conversation. Instead, you focus on name calling. Does your mommy know you're on the 'net?

not_dolph 7 years, 2 months ago

Dear Marcy -

What I meant to say was cool is a tool - not TIF. I could care less what financial process they use to build the hotel. People on the LJW blog are tired of the BS that Sven puts out.

You can stalk... I mean check my comments all you want. Don't care sweetie.

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