Another Shell Game?
I have supported development of the Summit Mall from day one. Free-market forces indicate it's time for a new retail center, and the city had no business trying to stop it just to protect retail activity and property values on University Avenue.
With zoning approval in hand and a fairly weak legal effort that isn't likely to reverse the course of action, a handful of real estate developers and city leaders are working to drum up support for tax increment financing redevelopment districts. The issue is related loosely to the Summit Mall project because it is within one of the five curiously drafted districts.
In a nutshell, the city could designate up to 25 percent of its land mass for TIF districts. Property taxes would continue to be paid at frozen current levels to Pulaski County, which in turn distributes most of the money to public schools and libraries. Additional property tax revenue generated by any new developments or improvements to existing properties within those districts would go into a fund controlled by a TIF improvement district board that would decide how the money is spent.
The proposal is being touted as a convenient way to pay for new streets and street improvements without raising taxes. The concept is being criticized by public school officials, who say the move could cost the Little Rock School District more than $14 million in revenue during the next 25 years.
It seems to me the city is desperate to find street fund resources. Little Rock has no master plan or funding for proactive street development. Heck, we can't seem to afford fundamental street maintenance or new traffic signals.
City Hall doesn't have the leadership or trust necessary to put together a comprehensive street plan and funding mechanism, that voters would approve. Thus, we have the TIE districts effort.
Mayor Jim Dailey -- whose. only opposition to the TIF plan to date is the inclusion of Summit Mall in a district -- and the Little Rock Board of Directors are experts when it comes to shell games. You'll recall that our golf course and zoo revenues are being used to pay for revenue bonds that financed the land purchase for Clinton Presidential Library.
The TIF districts proposal essentially constitutes a shifting of potential revenue from the school system coffers to support city government functions that are inadequately funded.
The lack of property tax growth from 25 percent of the city would almost certainly force the school district to seek higher millage rates from all the existing homes and businesses outside the redevelopment districts. That doesn't seem fair at all.
We can't blame the real estate developers for looking at ways to find funding for infrastructure around the city. There's a group of investors that is prepared to make $8 million in street improvements in the highly congested Kanis Road and Bowman Road area if they can get a commitment of help from the city.
Property owners and developers should share in the costs of infrastructure improvements but should not be expected to shoulder the entire financial burden. The Summit Mall developers, for example, will pay more than $4 million toward an upgrade of the Interstate 430 interchange at Shackleford -- a move that will benefit other area businesses as well.
One of the proposed TIF districts encompasses not only the proposed mall, but the Barrow Road neighborhoods. With all the business development being proposed on the west side of Interstate 430, it's hard to imagine those neighborhoods would see significant benefits of the funding. Commissioners would be pressed first to take care of the needs of the new commercial developments that will generate the district's revenue.
I can agree that the city has to address infrastructure needs proactively and provide a reasonable level of street development and maintenance citywide. Doing it at the expense of the school system and leaving the other 75 percent of Little Rock without funding for development or improvements just can't be a fair proposition.
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|Title Annotation:||Little Rock, tax increment financing, Summit Mall|
|Comment:||Another Shell Game?(Little Rock, tax increment financing, Summit Mall)|
|Article Type:||Brief Article|
|Date:||Sep 10, 2001|
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