Johnson County's Supervisor Rod Sullivan is one of the brightest, best informed, creative, hard working county officials in the United States.
Now he's provided the City Council of Iowa City one of the best essays I've seen regarding the downside of TIFs (including my own writing).
It's in the form of a letter of September 12, and not available on the Internet so far as I know. But since it was sent by email to a group I'm taking the liberty of posting it here. If and when he posts it on a site that gets more traffic elsewhere I may delete it from this blog.
It really needs to be picked up and run as an op ed column by one of the local papers. Meanwhile, here it is:
Dear City Council:
My name is Rod Sullivan, and I live at 2326 East Court Street in Iowa City. I am a 22-year resident of Iowa City, and a lifelong resident of the area. I am extremely disappointed by the decision of the Economic Development Committee to recommend granting the TIF request by Hieronymus Partners. I think this is a very bad idea for several reasons:
1. I am already hearing justifications for this deviation in policy; ³Historically, Iowa City has been very responsible with TIFs.² That may have been the case until now. How do you react to someone who says, ³Historically, I never drive drunk until now.² Or, ³Historically, I have been a virgin until now.² The past is important, but your current decisions matter now, and will matter long into the future.
2. The fact that Iowa City has historically used TIF less than other cities in Johnson County is irrelevant. The comparison is akin to saying, ³Crime is low in Chicago. Compared to New Orleans.² There is a reasonable standard for the use of TIFs, and Johnson County is not the correct place to seek comparisons.
3. TIFs are incentives. Hieronymus Partners has been very clear about their desire to build a 13-story building at the corner of Burlington and Clinton. No incentives are necessary. It is truly unwise to offer inducements when none are necessary.
4. Tax dollars should be spent on public purposes. What is the public purpose in this case? Imagine downtown Iowa City without the TIF. The building still gets built. Now you offer a TIF. The building still gets built. How does the TIF serve a public purpose?
5. Some claim that use of the TIF ³allows the City to have greater say over the project.² Last time I looked, Iowa City already had this power. If you do not like a plan, you do not grant the building permit. Iowa City already has the power to influence this (and any) development; you simply need to exercise this power.
6. The bulk of the building will be residential. Using TIFs for residential units is imprudent given the rollback on residential property taxes and the fact that the housing will not meet low-income standards.
7. How many jobs will be created because of the proposed TIF that would not be created otherwise? (I think a bit of study will show the number to be zero.) How much would these jobs pay? How long will they be in existence? What benefits will be provided? Will workers have an opportunity to unionize? Are there clawback provisions if projections are not met?
8. TIFs hurt other taxing entities. The ICCSD and Johnson County both already suffer from tight budgets. TIFs only serve to exacerbate these problems, as TIFs divert essential resources from other units of government. In terms of Johnson County, that means less ambulance service, less
deputies, less health care for the poor, less services for people with disabilities, less services for seniors, less services for Veterans... Less of everything, except taxes; those have to go up on everyone else.
The bottom line is very simple: Iowa City does not NEED a 13-story apartment building. The public will not directly benefit. If someone feels the market will bear this project, she or he should try to convince her or his financiers of the merits. It is not the job of Iowa City to help one landlord at the expense of all the rest.
I do not oppose the building being proposed by Hieronymus Partners. I do oppose taxpayer financing of what should clearly be a private endeavor.
Mr. Hodge is a man of significant means. He has the ability to go to the private financial market and finance his project. And hypothetically, if all the banks did say no to financing this, then why would Iowa City say yes?
I urge the Council to vote no on this TIF request. I would like to speak with you further on this matter. Please feel free to give me a call at 354-7199 at your earliest convenience.
Sincerely,
Rod Sullivan
Technorati tags: TIF, TIFs, taxes, economic development.
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