TIF Proposal Fails Straight Face Test

Monday, February 19, 2018

Mayor Berke has put the City Council in an unenviable position. The Council will be asked to vote Tuesday on whether to use tax increment financing (TIF) to pay for a one-block extension of M.L. King Boulevard to the Riverwalk. 

Accountability for Taxpayer Money supports the road extension concept and understands its timing. However, we strongly oppose using TIF future property tax revenues to fund this project. It raises policy and transparency issues and makes the project more expensive. 

The city has cash reserves that could be used. They could use proceeds from the Alstom settlement (for not meeting their PILOT tax break commitments) or use hotel/motel taxes, which are the typical funding source for public projects on the riverfront downtown. 

For whatever reason, Mayor Berke insists on TIF, thus asking Council to ignore their own adopted TIF policies. The project is not in a blighted area. It does not provide a lot of well-paying jobs. It may not be eligible for tax increment financing under state law. It does not meet the "but-for" test because the apartments and office building are well underway. They would happen without the TIF and would pay property taxes to support fire, police, streets, etc. 

The Council asked good questions on January 30. The mayor's administration responded in part by removing the most egregious aspect of the initial proposal. Originally, the TIF proposal would have allowed public taxpayer dollars to be used for the private development (apartments and office building). Additional policy questions remain unanswered. 

The City Council and County Commission have an obligation to explore other aspects of private benefit before voting to approve a TIF. They need to know who determined the price of the land and the loss of units to development. Was an appraisal done? They need to understand why such a high percentage of the TIF project is earmarked for "soft costs" rather than for the actual street construction project. 

Finally, the public expects our elected officials to find out (and tell us) the names of the property owners who own the land where the one block extension would go. It is not Evergreen Real Estate, the Nashville Cameron Harbor developer. The TIF application from Evergreen said this property was "formerly" owned by Newton Chevrolet and is "under contract." To whom? In the absence of transparency, there is increasing speculation that well-connected local business leaders are involved and may stand to benefit more if a TIF is approved rather than if the city purchases it with cash reserves. 

For all of these reasons, ATM requests that members of the City Council not approve the TIF. Sometimes it is hard to do the right thing. This decision should not be hard. There are much better alternatives than TIF to pay for this street. ATM hopes that Councilors will demonstrate the “wisdom to know and the courage to defend the public interest.”

Helen Burns Sharp

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