Agenda - Planning Commission - 09/01/1998

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The redevelopment agency may designate specific projects for implementation and solicit investors and developers ro respond to a request for proposals, If the developer's proposal is congruous with the redevelopment plan, the developer may request assistance from the agency on important aspects of the plan. The agency will then make an agreement with the developer to build in accordance with the plan and within a designated time line, at which point the agency should agree to provide specified services in support of the development. In Rock Island, Illinois, TIF funds can be used to pay for interest Increment Finance District nners can ~lay a central role in the TIF process by providing technical expertise, including knowledge of state statues, local zoning laws, and land-use issues. costs incurred by the developer in a redevelopment . project. The funds may also be used to pay for the costs of job training. Washington, D.C., developer Herbert S. Miller feels that TIF districts make mixed-used development affordable for developers, "Without it, you can't afford to compete against an office building." Miller is the developer of Gateway Square, a planned retail/entertainment complex in Washington, D.C., where TIF is being employed to revitalize the city's downtown area. The D.C. council's TIF bill tazgets a downtown area of approximately 100 blocks. The Saint Louis Galleria retail complex in Richmond Heights, Missouri, is a TIF success story. The project was funded in part by TIF to help create city services such as no-fee ambulance service, high-tech firefighting equipment, van shuttles for the elderly, and routine sidewalk and road repairs, all of which occurred without an increase in real estate taxes over the past 10 years. The Downside of TIF The TIF approach is not without opposkion. Much controversy has been generated over the varying definitions and broad interpretations of"btight" in some TIF statutes. One unfortunate consequence of the ambiguity is that municipal officials have been allowed to unilaterally make critical financial decisions that affect the tax base of school districts and other overlying districts. Pennsylvania's statute defines blighted areas as, "unsafe, unsanitary, inadequate, or overcrowded conditions of an area's dwellings; lacking in proper lighting and open space; defective in the design or arrangement of the buildings; faulty in street or lot lay-out, and economically or socially undesirable land uses." While this definition provides several specific criteria for blight, "undesirable land uses" may be considered too vague and therefore provide a loophole for TIF misuse. Critics are quick to note the misuse of TIF, and claim that many officials do not recognize TIF as a redevelopment tool for blighted areas, but rather an economic development tool to attract developers and investors to the community. Another concern is that TIF moves development from one city to the next, resulting in no net gain for the larger region. Misuse of TIF can be largely attributed to poor understanding on the part ofmunicipflities, lack of dedication to the elimination of urban blight, few resources for local planners, or even the absence ora planning department altogether. Insufficient planning ofa TIF district can result in a legal disaster for a municipality. In October 1994, a group of nonprofit organizations and concerned citizens filed a lawsuit against the town of Addison, Illinois. The lawsuit charged the village with attempting to demolish Addison's only two predominantly Hispanic neighborhoods by misusing powers acquired through the enactment of a TIF district. The village had no specific redevelopment plans for these areas other than the seizure and demolition of alt or most of the 827 apartments in the two neighborhoods, which were home to almost half of the village's nearly 5,000 Hispanic residents. Despite a promise by municipal officials that no buildings would be razed without public input, the Hispanic residents were faced with leaving their homes because the village was forcing landlords to sell within two weeks after the creation of the TIF district. Owners were given the option of selling at a price set by the village. Addison immediately demolished eight four-unit apartment buildings, with four others anticipating a similar fate. The village also filed a lawsuit to condemn at least eight more. Demolition was halted the week that the lawsuit was filed. The plaintiffs in the case Hispanic and open housing groups---were criticized by the .village and its supporters who claimed that their intent was to stop all redevelopment and improvement efforts. The plaintiffs responded by saying, "all the plaintiffs in this case are advocates of urban renewal.., as long as that renewal does not cause inexcusable homelessness, displacement and economic harm, which was the case in Addison." The $4.3 million settlement Was reached in August 1997 and is the largest settlement of any private fair housing suit in the nation. The consent decree provides for the demolition of a limited number of additional buildings to make way for neighborhood parks and new affordable housing. Homeowners will receive reimbursement at 110 percent of fair market value and local tenants will receive substantial relocation assistance. In addition to preserving the vast majority of the existing housing, the settlement provides for the construction of up to 81 new units of housing with ownership and occupancy priority given to displaced owners and tenants. None of this was included in the original TIF plan.