What's the hottest 'blighted' development property in (perhaps) the world?
For those of you who love paradoxes here's a whopper: What is a property that has been identified by both the mayor and council members as a site for a "once in a century opportunity" for development while at same time being designated by the same people as a site so "blighted" that it would never be developed "but for" huge infusions of taxpayer's money?
It's the Ford Development, a 21st Century sustainable, thank-god-amighty city, yep, the one you've been reading about at this very website!
How can this be?
For those of you shaking your heads right now please click HERE to read the St. Paul Planning Commission's statement about upcoming business in St Paul. Go to item 6; oh what the heck, here's the quote:
"Ford planning work moved into high gear, with the preparation of the Ford site zoning and public realm concept plans.Studies completed in 2016 include a Ford Site Tax Increment Financing Plan, a Ford site market study, a site infrastructure cost study, a storm water plan for the redeveloped site, an Aquifer Thermal Energy Storage feasibility analysis and a Ford Site transportation study." (emphasis is mine)
If you don't know what Tax Increment Financing is here's a primer. To develop areas which would not possibly be developed because they have issues (the official word is 'blighted') the City can pay to tear down, purify an area of pollutants, build roads, add plumbing and drainage and then turn it over to some developer to build more stately mansions upon. All this is done with public funds, usually by selling bonds or using money left over from other TIF projects (there are more than you'd believe possible but that's another blog). The developer can "pay as they play" but then here's the beauty part.
The amount of new taxation which exceeds the tax revenues originally reaped from the blighted property (rent, property purchases, etc.) is identified as the "increment" and it is collected by the City or more like the Port Authority (did you know that St. Paul has a PORT AUTHORITY? Just like New York except they have a port).
So if Ford is currently paying $1 or $2 million in taxes and the newly built glorious 21st Century city apartments are rented, offices built, cafes opened and serving customers, the new taxes that are collected go to the TIF authority who pays off (not the taxpayers, don't get excited!) the people who built the infrastructure described above. Tax increments are typically paid to the TIF authority for the length of the TIF agreement, usually 25 YEARS. although the Legislature passed a law that the initial costs must be paid off within five years, that's, well, sorta loosely enforced, in fact it's almost impossible to find out who owes what to whom and how much is being paid off..
So during that 25 years who pays for the 800 new kids going to Horace Mann and Highland HS? Who pays for the roads now laid waste by years of construction traffic? You can bet it's not the increment which is still paying off the developers and perhaps even the new Loon's stadium!
So, for all the people expecting our property taxes to fall when the Ford Village is completed, sorry bucko! Get in line, wait a quarter century and then..New TIF developments will be sucking away your payments long before this happens. Hey, you have a new city within a city blotting out the sky through which you can ride your bike. Better get your enjoyment where you can. Oh, PS, there may be too much traffic to ride your bike, but there's always buses and maybe a new train funded by, you guessed it, TIF funds!