Voice For Liberty

Tag: TIF districts

  • Wichita Center City South Redevelopment TIF District Testimony

    From John Todd.

    Update: Watch John’s testimony on YouTube here.

    Testimony delivered by John Todd before the Wichita City Council on December 2, 2008 in opposition to the proposed Tax Increment Financing (TIF) plan for the Center city South Redevelopment District located generally around the new Intrust Bank Arena.

    In 2004, proponents of the new Intrust Arena were assuring voters that their approval of the new arena would provide the “economic boost” and the “synergy” needed for effective downtown redevelopment without the need for increased property taxes. No mention was made at that time of the need for additional taxpayer subsidies for downtown development.

    In recent testimony before the City Council, I heard a staff member advise the Mayor and this City Council that county property appraisals in the area adjacent to the new Intrust Area had increased more than 10% in the prior year. Does this proposed TIF District sound like a blighted and declining area headed for economic stagnation? Or is it time for private developers to seize this development opportunity our Mayor envisions, and of course without the need for risking the taxpayer’s wallet that is a common element in private/public partnerships?

    Since the parcels of land around the new Intrust Arena appear to be owned by dozens of small private property and business owners, private developers will need to assemble the parcel(s) they need for development through voluntary exchange rather than through government’s involuntary and coercive taking of property by either the threat of eminent domain or the actual use of eminent domain. Street improvements, if needed for the project(s), should be paid for by the private developers or through the use of special assessment financing. Can anyone believe that city and/or county planners failed to plan for the street improvements needed for the new arena and a method of paying for them prior to beginning construction of the arena? (Note: In addition to the nearly $12 million TIF proposal for streets, a last minute change added an additional $10 million the TIF for a parking garage.) Also, I believe the original Arena project the voters approved in 2004 included $14 million dollars for a parking garage.

    One doesn’t have to look very far around our city to see and appreciate the success of our many risk-taking private developers who through their knowledge of the market and their problem solving abilities, plus most importantly the investment of their own money, continue to expand our tax base, create jobs, and enhance our quality of life. Perhaps these are the people you need to call on to bid on downtown development work without the need for a massive public subsidy?

  • Late Changes Don’t Inspire Confidence in Wichita Government

    At today’s Wichita City Council meeting, Councilmember Jim Skelton revealed that the plan for the downtown Wichita arena TIF district had changed. A provision for up to $10 million in parking was added.

    I had looked at the agenda report less than 24 hours before the start of the meeting. The plan for parking spending was not mentioned. I looked right now, and yes, it’s there.

    There’s a problem when things change so quickly. Citizens can’t prepare themselves on such short notice. That’s a problem for openness and transparency in government.

    This problem is in addition to the apparent uncertainty as to what’s needed for this TIF district to succeed.

    The TIF district passed, with all city council members voting in favor.

  • Downtown Wichita Arena TIF District Still a Bad Idea

    Say no to expansion of the Center City South Redevelopment tax increment financing (TIF) District.

    Remarks to be delivered at the December 2, 2008 meeting of the Wichita City Council. Watch the video here.

    Mr. Mayor, Members of the Council:

    It is the case the the City of Wichita is proposing to limit this TIF district spending to things like streets, intersections, landscaping, and lighting. But these are still things that developers working outside of TIF districts generally have to pay for themselves.

    This is the real function of TIF districts: TIF developers get to use their own property taxes to pay for things that non-TIF developers have to pay for out-of-pocket, or through special tax assessments on top of their regular property taxes. This is accomplished through a confusing arrangement that hides the reality and size of the subsidy given to TIF developers. I’ve come to realize that this confusion serves a useful purpose to this council, because if the people of Wichita knew what was really happening, they’d be outraged.

    The proposed TIF district, while smaller than previously proposed, is still large. Very large. Has anyone calculated what share of the retail and restaurant trade in Wichita would have to be captured by this district in order for it to be successful?

    Has anyone performed a market study to see if obtaining this market share would be feasible? And if feasible, what effect would this have on existing business and development in Wichita? Specifically, what effect would this have on other development in downtown, such as Old Town and Waterwalk? We’ve seen that when city-subsidized business is in financial trouble, this council is willing to fund a bailout.

    We’re at a point, Mr. Mayor, where entrepreneurs may not be willing to work in Wichita without a taxpayer subsidy, or at least not in competition with subsidized development. I am aware of a commercial development in Wichita that has been canceled because of Wichita’s tax environment. Some developers have told me that they are reconsidering whether to do any more business in Wichita simply because of our property tax environment. This situation has recently worsened, as we voted ourselves a large tax increase last month. At the state level, spending cuts or tax increases loom as the state’s budget situation deteriorates.

    Then, consider reporting in the Wichita Eagle this summer, which found this: “City and county tax records show that nearly $159 million in public money has been spent on Wichita’s tax increment financing districts, to get roughly $150 million worth of new development.” That’s not a good deal for city taxpayers.

    Also, evidence of the effectiveness of TIF districts for cities as a whole is not good. A study from the Institute of Government and Public Affairs at the University of Illinois finds that “cities, towns, and villages that had TIF districts actually grew more slowly than municipalities that did not use TIF.”

    Finally, Mr. Mayor, you’ve referred to some people as the “naysayers.” I don’t know if you were talking about me. It would be presumptuous of me to think so. But I don’t say “nay” to development, even to downtown development. What I say “no” to is taxpayer-subsidized development, planned and managed by government.

    Saying “no” to that, in turn, lets us say “yes” to the rich diversity of human individuality instead of a collectivist vision driven by government bureaucracy. It means saying “yes” to free people cooperating voluntarily through free markets. That is what is disappearing as more and more of our city’s development is subsidized and managed by government.

  • Wichita Mayor Carl Brewer’s Reformulated TIF Plan Still a Bad Idea

    Today the Wichita City Council holds a special meeting to consider a reformulated plan to provide tax increment financing (TIF) for the area surrounding the downtown Wichita arena. It’s still a bad idea.

    It appears there are two major changes in the new plan. First, the TIF district is smaller. Second, spending on the district would be 70 percent of the new property taxes — the “increment” — instead of 100 percent.

    Why is this plan a bad idea? Why, you may be asking, aren’t I in favor of development and progress in downtown?

    To me, there’s a difference between entrepreneurs working in markets and government centralized planning. That’s one of the reasons why I oppose this TIF district. It represents government making plans for us, rather than people deciding themselves what they want. It’s the difference between political entrepreneurs — who work to please elected officials — and market entrepreneurs — who work to please customers.

    If it turns out that when people express their preferences freely that they don’t really want much downtown development, that’s okay with me. I, for one, do not feel that I have the superior knowledge needed to tell people where they should go for fun and entertainment. I’d rather let people decide themselves.

    I’m not willing to use the blunt tool of government to direct people and their money to where I think it should go. I wouldn’t do that even if I was convinced I was right.

    But there are people in Wichita who don’t share my view of free people trading freely in free markets. Mayor Carl Brewer and several city council members — Sharon Fearey and Lavonta Williams being most prominent among them — and quasi-governmental organizations such as the Wichita Downtown Development Corporation feel differently. They feel that they know better than Wichitans do where development should be happening, and they’re willing to use the tools of government to force their vision upon you.

    This is what’s happening at this time. This is why Wichitans need to oppose this TIF district.

    Other article about TIF districts in Wichita: Do Wichita TIF Districts Create Value?, Downtown Wichita Arena TIF District, Wichita City Council’s Misunderstanding of Tax Increment Financing, Tax Increment Financing in Wichita Benefits Few, Tiff over Wichita TIFs, and Wichita City Manager’s Warning is Too Late.

  • Should a Beat Journalist be a Layman?

    Keeping TIFs from a public tiff by Wichita Eagle business reporter Bill Wilson on the Eagle’s Business Casual blog contains some comments that are troubling to me.

    In these comments, reporter Wilson wrote this: “Instead, a TIF, to this layman, actually is a government bet on the success of a development.” (emphasis added)

    Now I believe that Mr. Wilson may be wrong in his understanding of the mechanism behind tax increment financing (TIF) districts. I certainly don’t agree with his assessment of their public policy impact when he says “TIFs are miscast as a government giveaway.”

    When our city stakes the success of its downtown development efforts on TIF districts and other economic development incentives, is it asking too much for journalists to acquaint themselves with matters like TIF districts to the point where they are no longer laymen?

    It is not complicated. These articles may be of interest: Tiff over Wichita TIFs, Wichita City Council’s Misunderstanding of Tax Increment Financing, Tax Abatements in Wichita, and Tax Increment Financing in Wichita Benefits Few.

  • Records Requests Sent Today

    Today, I’ve made two records requests under the Kansas Open Records Act.

    The first, to USD 259, the Wichita public school district, is this:

    All correspondence between USD 259 and Schaefer Johnson Cox Frey Architecture and its representatives from July 1, 2007 to the present. I ask for both written and electronic correspondence such as email. This would include email between USD 259 and Schaefer Johnson Cox Frey Architecture’s email accounts at sjcf.com, and also email accounts of Schaefer Johnson Cox Frey Architecture representatives such as Joe Johnson, Kenton Cox, and Ken Arnold that may not be at an sjcf.com email address.

    Then, to the City of Wichita:

    All correspondence between the City of Wichita and HH Holdings, LLC and its representatives from January 1, 2007 to the present. I ask for both written and electronic correspondence such as email. This would include email between the City of Wichita and Kevass Harding at both business and personal email addresses, between the City of Wichita and Key Construction and its representatives at both business and personal email addresses, and between the City of Wichita and Landmark Commercial Real Estate at both business and personal email addresses.

  • Does Kansas Economic Development Work?

    A commentary by AFP’s Alan Cobb (Yes, but it’s only $1.3 billion) reports that Kansas economic development efforts are not working.

    Can the same be said about Wichita’s?

  • Wichita School District: TIF Action Tests Accountability and Ethics

    Remarks to be delivered to the board of USD 259, the Wichita public school district, at tonight’s meeting.

    Regarding the Ken Mar Redevelopment District: There is simply no way to look at this TIF district other than as a transfer of $2.5 million from the taxpayers to Reverend Harding’s group. Why? According to material prepared by the City of Wichita, the development was $2.5 million short in its funding. But after the creation of the proposed TIF district, the project is fully funded.

    Furthermore, as I explained at an earlier meeting of this board, a TIF district allows developers to pay for things — using their own property taxes — that non-TIF developers must pay for themselves. If this were not so, how does the TIF district benefit the development?

    Some say that but for the creation of the TIF district, the project would not happen, and therefore no increased tax revenue would be collected. But as recently reported in the Wichita Eagle, these binary, either/or choices are rarely the actual case. For this development, it has been reported that the development already has $11 million in funding. So it appears that the TIF district is not required for something nice to happen to Ken Mar.

    The real problem with this TIF district, however, is the conduct of the applicant, who is a member of this board.

    At a meeting of the Wichita City Council, Reverend Harding told the council that he had informed his fellow school board members of what he was doing. But two members of this board have told me personally that he did not do that. So there’s a discrepancy somewhere.

    Then, I am Reverend Harding’s constituent. He has not responded to my several email and telephone messages with questions about this project.

    In meetings of the Wichita City Council and Sedgwick County Commission, he spoke about himself and what he wants to do for the community. But he hasn’t explained why the taxpayers need to subsidize his project with $2.5 million.

    He hasn’t explained why he has voted for property tax increases, but now seeks to avoid paying some of those increased taxes. He hasn’t explained why district residents should vote to increase their property taxes — by way of the proposed school bond issue — but desires to avoid paying some of those taxes himself.

    And importantly, in his role as school board member, he hasn’t explained why the school district should forgo tax revenue just so Ken Mar can be redeveloped even grander.

    Recently the Sedgwick County Commission took up this matter even though they were not required to, just as this board is not required to. The commission heard testimony from the public. The commissioners spoke, and then they voted. Although the commission did not vote the way I asked, the matter was handled with a reasonable degree of openness and transparency.

    This board now faces a test of accountability, openness and transparency, and most importantly, ethics. So I ask that this board consider a resolution vetoing the formation of this TIF district. Those members with a conflict of interest may then recuse themselves, and the remaining board members can vote. This must be done tonight, as any delay means automatic consent to the formation of the TIF district.

    If this is not done, the citizens of the Wichita school district will wonder if the fix is in, if a political insider used his position and connections for personal gain. They will be justified in wondering.

  • Testimony before the USD 259 Wichita Public School board regarding the Ken Mar TIF

    From John Todd.

    President Rogers, School Board Members, and Superintendent Libhart, I thank you for this opportunity to speak. My name is John Todd. I live at 1559 Payne in Wichita, Kansas, and I am opposed to the Ken Mar shopping center TIF that was created by the City of Wichita on August 12, 2008, and that you have the authority as the Board of Education for the Wichita Public School District USD-259 to reject as bad public policy for public schools and other local governmental units on behalf of the taxpaying citizens of this community.

    County Commissioner Gwen Welshimer, who voted against this TIF when it was considered before the Sedgwick County Board of County Commissioners, advised me that her investigation into the $2.5 million dollar TIF revealed that HH Holding, LLC was the owner of the Ken Mar shopping center and that one of the HH Holdings owners was school board member, Kevis Harding. Commissioner Welshimer further advised that county records show that the HH Holdings group paid $2.215 million dollars for the shopping center, and that the group’s purchase of the property closed on April 2, 2008.

    Is there any other concerned citizen here tonight besides me who is outraged by a real estate transaction with a purchase price of $2.215 million dollars that warrants a $2.5 million dollar cash contribution from the taxpayers of this community? Isn’t the Ken Mar transaction akin to having local government simply donating the $2.215 million dollar shopping center to the investors for free and then handing them $285,000 cash as additional boot from the public treasury? Does the Ken Mar TIF sound like a project that demands full public disclosure of Mr. Harding’s ownership interest in the Ken Mar project and his membership on the School Board?

    In the interest of transparency, I would request the School Board bring the Ken Mar TIF project to a vote before the School Board tonight in the interest of full disclosure as to the relationship of a School Board member and the project, and also in the interest of full disclosure of the potential financial impact, if any, that taxes diverted away from the USD-259 mill levy participation in the Ken Mar TIF will have on Wichita Public Schools in particular, and/or on the school children of Kansas if this money is diverted away from the State of Kansas school funds.

    A recent article in the Wichita Eagle reported that an estimated $73,000 per year over 15 years would be diverted away from the Sedgwick County treasury due to the Ken Mar TIF. And, since the Sedgwick County and the USD-259 mill levies are similar in size, where will the school mill levy portion of the TIF Bond payback be diverted from, local or state school funds?

    I believe the stockholders/citizens of the USD-259 community deserve an answer to the questions I have asked tonight, and the answers need to be in an “on-the-record” format that only inclusion on the school board agenda tonight would provide.

    Please help your constituents follow the money trail.