VOL. 127 | NO. 242 | Wednesday, December 12, 2012
Concerns Continue Over Heritage Trail Tax Increment Financing
By Bill Dries
Shelby County officials have reservations about plans to create a tax increment financing zone for the city’s proposed Heritage Trails development area.
The reservations prompted county finance experts to move a recommendation against the proposed tax increment financing district to a private committee meeting last month.
The minutes of the TIF Review Committee of the Memphis-Shelby County Community Redevelopment Agency were made public after agency chairman Mike Frick requested a public copy of the minutes.
Frick made the request at the Dec. 6 meeting of the agetrancy board in response to questions from the public at the meeting about the process the redevelopment agency will use in approving the city request and any past decisions made.
The review committee includes non-elected city and county officials and administrators who work with the agency board but are not on the board. Because only one member of the Community Redevelopment Agency board attends the review committee sessions, they are not considered open meetings under state law.
Shelby County Finance Director Mike Swift moved to recommend against the TIF district favored by the city to finance public improvements in the district, which is much lager than just the two South Memphis public housing project sites that the proposal is being built around.
“Mr. Swift explained that TIFs are very expensive,” read the minutes from the Nov. 27 review committee meeting compiled by Josh Whitehead, planning director for the Memphis-Shelby County Office of Planning and Development.
“They are designed so the project supports the TIF,” the minutes read. “Here, Foote and Cleaborn Homes do not support the TIF. In fact, it is anticipated that they will receive PILOTs from the city of Memphis Health, Educational and Housing Facility Board, so very little TIF increment will be produced on the project for which the TIF is created.”
Swift also reminded the group of new funding obligations the county will have in the future, including “the gap left by the city when it ended its annual payment to the Memphis City Schools.”
The city’s Heritage Trail plan, which is still forming, is drawing fire from other quarters over the likelihood it will call for the demolition of the Foote Homes public housing project, the last large public housing project in the city that is still standing.
Leading the opposition is University of Memphis urban planning professor Ken Reardon and the Vance Avenue Collaborative effort he coordinated, which favors keeping and renovating the public housing development.
Shelby County Chief Administrative Officer Harvey Kennedy said County Mayor Mark Luttrell is awaiting a proposal for Heritage Trail from City Hall that is set in stone.
“His position right now is that he just doesn’t have enough information about it,” Kennedy said. “Clearly, the concerns are great. But it has more to do with the funding mechanism coming from such a large TIF district but concentrated in a couple of areas. We’ve just got some questions about how that would come about.”
Swift withdrew the negative recommendation motion after agency board member Ann Langston suggested exploring some kind of common agreement among all of the agencies that grant payments-in-lieu-of-taxes.
The committee is to work toward presenting a recommendation on Heritage Trail at the Community Redevelopment Agency board’s Feb. 7 meeting.
Kennedy said Swift’s concerns reflect the specific question the county administration has.
“It looks like an awful lot of revenue is going to be committed over a 20-year period,” he said. “Right now the mayor is not in a position to support it or oppose it until he’s got some more information.”
Meanwhile, Shelby County commissioners will meet Monday, Dec. 17, before their regularly scheduled meeting that afternoon to talk about tax increment financing.
“What I’m trying to do is just gather the people together to find out what is going on and finding out if there is any real communitywide support for it,” said commission chairman Mike Ritz who called the meeting. “Every Downtown developer I’ve talked to about it says it is a really bad idea. They are concerned that their projects will become less attractive to the community to approve, if in fact all the taxes that come from them will go to essentially a public housing project.
“We sort of bleed property tax increases away from the community and I’m talking about the whole community, not just Downtown. I’m just gong to try to get a big picture. I’m not dwelling on proposed uses.”
Among the ideas to be explored or at least discussed next week, Ritz said, is whether the county could withdraw from the tax increment financing zone and keep its property tax revenue.