Dave Reid

RSC & Associates development moves ahead without TIF

By - Dec 28th, 2007 12:32 am
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Over the last year a debate raged over the question of “to TIF or not to TIF?” RSC & Associates not only requested city financing but demanded publicly that their Park East Square project required $9.5 million of TIF assistance to be economically feasible. $6.8 million of this city subsidy would of been to build a parking structure believed to be required to support a retail tenant mix including McDonald’s, Subway, PotBelly’s, Noodles & Company and Qdoba. The City’s position was that TIF assistance was not required as this project wasn’t likely to act as a catalyst spurring other development within the city and that the City had already spent millions preparing the Park East land. Additionally a market study conducted by SB Friedman reinforced DCD’s position that within the Park East corridor subsidizing of business would likely lead to a shuffling of business around downtown and not new growth.

Clearly RSC & Associates lost the debate with the City regarding TIF assistance and has finally moved forward with a new plan. The new plan and purchase agreement with the County for the 2.1-acre site requires the project to break ground in the next 90 days and will include two hotels, a retail component, 100 apartments and five town homes. It is unfortunate RSC & Associates didn’t stick with their original plan as it didn’t require TIF assistance and would be close to completion by now but it is positive to see the Park East moving forward with another development.

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2 thoughts on “RSC & Associates development moves ahead without TIF”

  1. Stephen Thiel says:

    I do not feel TIF is a subsidy, since it is a fully amortized loan. What is would do is leveraage a much bigger project. If I recall, the project was much, much larger with TIF funding than without. I think it was said that the loan would be paid off in 14 years. TIF financing is a great tool and 38 out of 40 TIF districts in the City are current with their payments,which shows their inherrant security.
    About the flat-Earth retail study done by the DCD. What a setup? Consultants are like plumbers and prostitutes in that they will give you the results you desire, if the price is right. You can also dial-up a study that would say that the denser development would lead to a far richer city. I subscribe to this point-of-view.

  2. Dave says:

    Stephen,
    Good point about what a TIF is or isn’t, I hear what you are saying. Though the current property taxes on the undeveloped land clearly become subsidize and then you get into the the grey area. Since a TIFs property taxes are going to pay for construction and not police, fire, mps, matc well what is that called? No I am a big believer in the use of TIF, I just don’t believe we needed a TIF for Krispe Kreme. Other projects like Catalyst seem appropriate for a TIF and well has a chance to live up to its name.

    See the problem with the RSC project really is that everything they have proposed (including the last one) was less than great, the large project was mainly larger because it had a parking garage (i.e. the TIF) to support some low end fast food joints (think strip mall).

    PS Hey cool you are my first commentor!

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