VOL. 122 | NO. 212 | Wednesday, November 7, 2007
Commissioners Squabble Over TIFs
By Bill Dries
A Shelby County Board of Commissioners tiff over TIF (tax increment funding) wasn't completely settled by Monday's votes in favor of a set of four joint city-county measures.
The three resolutions and one ordinance, which was passed on the first of three readings, set the stage for a TIF zone on Highland Street south of Central Avenue - the University Neighborhood Development Corp. Highland Row Area.
But the precise terms of the financing still have to be worked out by the Memphis and Shelby County Community Redevelopment Agency (CRA) overseeing the $12 million piece of the $63.5 million mixed-use project covering two blocks.
The County Commission as well as City Council will review those terms, including whether the financing remains in place for the maximum 30 years. Some commissioners suggested Monday a 20-year life was preferable. Even some commissioners who voted for the step ahead agreed that the process needs more specific guidelines.
That's a step both bodies might be more likely to take if TIFs become as popular as even critics of the Poag & McEwen "lifestyle center" and its financing believe they will be.
"There may be another TIF or two come along and I believe we need to establish some policies and standards which we clearly do not have," said Commissioner Mike Ritz.
TIF for tat
The financing is only for areas considered "blighted." The sales tax revenue from the TIF zone or district finances bonds specifically for infrastructure in the area. The theory is the improvements generate business and improve property values, which ultimately benefits local governments once the zones pass their expiration date.
Ritz, the most vocal opponent of the TIF, did succeed in passing an amendment requiring financial statements from the developers.
"Otherwise it's going to be impossible to know, quite frankly, just how important this TIF was to this development. ... It might help us make a better decision on the next one or two or three or four or five."
He argued the overall effect on the sales tax base locally would be a wash at best.
"I would submit to you that I don't believe any competent economist would tell you that retail sales in Shelby County are going to grow because of this project," Ritz said. "There's a very good chance, frankly, that we will cannibalize sales in other places. If it's a high-rent, high-value thing like the project out at Saddle Creek, they may pull retail sales from Saddle Creek or (The Avenue) Carriage Crossing."
Poag & McEwen developed the Saddle Creek lifestyle center. Developer Dan Poag told commissioners the Highland project is the first similar center in the county since then. It is to be built on land that the company doesn't own but has an option on, he said. It is to include retail as well as residential parts.
"We are interested in developing the project, but the returns on this project will make it very, very difficult to develop without the TIF," Poag said. "The funds that we're working with here, we're borrowing the taxes for a period of time to build infrastructure that makes this project work. Without it, this project does not work."
Most of the speakers at the public hearing Monday before the commission debated and voted were those favoring the project. They included University of Memphis President Dr. Shirley Raines.
The only previous use of the financing locally has been in the Uptown development in the north section of Downtown.
"The TIFs breathed life into that Uptown area to the point that it's probably one of the safest places in town," said Commissioner Sidney Chism.
Chism also figured prominently in the final commission debate Monday about $1 million in county funding for the Memphis Regional Chamber's Fast Forward economic development plan. Commissioners approved the funding and guidelines that bar any of it from going through the chamber to the group MPACT Memphis. The civic group of young business professionals drew fire from several commissioners for its financing of the political group New Path, which has endorsed candidates in the last two local election years. New Path and MPACT have some common members.
Chism and other commissioners had wanted the county money to be withdrawn if any chamber funding - public or private - went to MPACT. A majority on the commission approved that last month.
But the prohibition on other funding through the chamber was amended out of the final measure Monday on a motion by Commissioner J.W. Gibson.
"I wonder why there's so much concern about MPACT and that organization and trying to keep them alive and breathing ... so they can do some of the things we're accusing them of doing," Chism said. "They're political and everybody around this table knows it."
Commissioner Mike Carpenter saw the statement as a key moment in the debate.
"I think we're getting at the crux of this. It's about killing the organization. That's what it's about here."
Chism responded that it wasn't necessarily the central goal but that Carpenter's statement had "some validity."
"I don't intend to have any source, whether it's the business community or private entities, choose the leadership for the majority of this city for the benefit of the minority," he said. "If I can't do it here, then I'll see them at the polling place because it's not going to happen."
Commissioner James Harvey, who voted for the funding and Gibson's amendment, said the body should "concentrate on our interests and not the interests of others."
County Chief Administrative Officer Jim Huntzicker argued that the commission couldn't stop private funding of MPACT through other channels.
"From a practical standpoint, you have made your point that you don't want county funding going to this organization for whatever reason," he told commissioners. "The real issue you come back to to close that circle is do you want to back this new and progressive economic development plan and get something going in the county instead of arguing over MPACT?"