This is a reasonable question, and one that arose at the City Council meeting where the TIFs were approved last week..TIFs are project specific, and some of the buildings that remain undeveloped are the most challenging. These two projects - Daylight and Arnstein buildings are in a redevelopment area and both have elements of real blight and other structural conditions that make their renovation not workable without a TIF.

All TIF requests in the City are vetted through the Policy and Communications office and KCDC before being presented to City Council and County Commission. In order for our office to recommend a TIF the project has to pass a "but for" test as well as the "public interest" test. Not all projects that make it to our office make it past these hurdles. We examine the construction costs and projected purchases and / or rental expectations, both of which, by the way, are lower now. We also get third party verification from bankers not involved in the project. The question we ask is "Is this project feasible, or one that a bank would loan money to, without the TIF?

Sure there is some risk that the project would have gone through anyway. I think that risk is low for the projects we have worked with so far. There is also risk on the other side... the buildings stay vacant, producing virtually no taxes, serving as a drain on city resources, deteriorating, and threatening neighboring structures. Also keep in mind that the TIFs do produce immediate increased tax revenues during the TIF period because the amount of the total property tax that services debt is not subject to the TIF. They also pay CBID fees immediately.

Moreover, not that this is part of our policy, but any project that puts people to work and money in the local economy right now is a real plus.

Thanks Bill. I didn't realize that about the increased tax revenue during the TIF period. Either way it seems like a no-brainer: the city can't lose on these deals and anything that gets them occupied again helps in so many ways. I'm assuming the TIF is on increases in property value over the current appraisal (which is still taxed)?

The only disappointing thing is that the buildings were occupied not so very long ago, though neither was in very good shape. I'm not sure we weren't better off when they were decrepit and open. The city needs a range of buildings including run-down but habitable to maintain a diversity of uses. There's only so much demand for boutique shops and we have a surplus of class-A office space, but we used to have a shoe repair shop before Home Federal tore down the building for parking and the Daylight used to be home to artist studios and a children's theater workshop. None of these kinds of tenants can pay what David will need for his freshly renovated spaces and they won't be downtown (or will have to be subsidized) if we keep pricing them out of the market.

I wonder if the city could do something to encourage the opening up of some of the empty space in unrenovated buildings. Gay St has a lot of empty upper floors that are essentially blighted property. AFAIK, there's nothing happening upstairs at Arby's for example. What would it take to make that space (and others like it) minimally habitable for some affordable use? How about a proactive program of TIF carrots and blight enforcement sticks to improve some of the abandoned property over our heads?

what happens if an individual or company owning a property that has been recipient of TIF goes bankrupt? who pays the taxes?

If it takes x amount to develop property why shouldn't the market then determine the value of the property? Meaning if it isn't feasible without government assistance then why not drop the price or does it mean that it isn't feasible for this particular developer because they don't have the means to develop it.