TIFs keep surfacing because city officials often blindly focus on sales taxes. After all, that’s how cities are primarily funded. Desperate not to be one-upped by border cities and their own giveaways, cities gladly sacrifice property taxes for more sales tax dollars.

The problem is that property taxes pay for schools and many other critical services.

Disturbingly, the quest for precious sales tax dollars often encourages cities to abuse eminent domain as a part of TIF. St. Louis County residents and business owners in Rock Hill, Sunset Hills, Richmond Heights, Manchester, and elsewhere have suffered the pain of having their property taken so that taxpayers can subsidize new developments. Joanne and Arthur Bailey fought for years to be able to keep their home in Hadley Township (in Richmond Heights) against threats of eminent domain. Thankfully, the Baileys won their battle. Many others have not been so lucky.

Even when some officials understand the dangers and try to stop them, TIFs aren’t easy to defeat. County TIF commissions in Saint Louis and Saint Charles County have recently rejected TIF proposals only to see city councils override their decision. That is what happened in Ellisville, and will likely happen in Shrewsbury, because the law allows it.

It is hard to believe that a city of a few thousand can make tax decisions that harm an entire region, but that is exactly what happens. Shrewsbury has 6,600 people, but it will make tax decisions that affect the Saint Louis Community College district, which serves 1.3 million residents. Why continue to allow small cities to impose policies that hurt our larger region, with no way to stop it? It is ludicrous.

Happily, some citizens are finally starting to recognize the harm done by TIF and local government economic planning. The Ellisville City Council passed the TIF despite substantial opposition from the residents. Anti-TIF candidates in the most recent Ellisville mayoral election received more than 70 percent of the vote last year, but the TIF still went through. It remains to be seen whether the opposition in Shrewsbury will be able to mount a major attempt to defeat the latest Kenrick Plaza TIF proposal.

Major TIF changes are sorely needed at the state level. Countywide TIF commissions should have the final say, not city councils, and Missouri needs far stricter limits on what can be taken by eminent domain. Until then, the municipal TIF sprint to the bottom will continue. Next stop: your town.

The post Stokes on KWMU – TIF Hurts Communities appeared first on Show-Me Institute.

• A look at the Show-Me Institute’s new policy questionnaire, “Principles or Politics?”
• A message from Executive Director Brenda Talent
• We profile the three latest additions to the Show-Me Institute staff.
• Fellow Andrew Wilson reports on how the latest tax changes in Kansas will impact Missouri jobs.
• Why Charles Willey, M.D., tireless advocate for free-market healthcare reforms, supports the Show-Me Institute.
• A review of Road to Freedom: How to Win the Fight for Free Enterprise, the latest book by Arthur Brooks, who recently spoke in Saint Louis at a Show-Me Institute co-sponsored event.
• Education Policy Analyst James Shuls reports on how Missouri’s schools are “stuck in the middle” in terms of academic achievement.
• An overview of some of our scholars recent appearances on broadcast media.
• An article on the recent effects that TIF and eminent domain have had on the Saint Louis County neighborhood of Hadley Township

The post Show-Me Newsletter: 2012, Number 3 appeared first on Show-Me Institute.

More background on Hadley Township

More videos in this series
Part 1
Part 2
Part 3

The post Who is Hurt by Eminent Domain Abuse and TIF in Richmond Heights? – Part 4 appeared first on Show-Me Institute.

More background on Hadley Township

More videos in this series
Part 1
Part 2
Part 4

The post Who is Hurt by Eminent Domain Abuse and TIF in Richmond Heights? – Part 3 appeared first on Show-Me Institute.

More background on Hadley Township

More videos in this series
Part 1
Part 3
Part 4

The post Who is Hurt by Eminent Domain Abuse and TIF in Richmond Heights? – Part 2 appeared first on Show-Me Institute.

More background on Hadley Township

More videos in this series
Part 2
Part 3
Part 4

The post Who is Hurt by Eminent Domain Abuse and TIF in Richmond Heights? – Part 1 appeared first on Show-Me Institute.

Click here to watch video of the event.

The post Donnybrook: Brenda Talent on KETC appeared first on Show-Me Institute.

Usually when we write to warn cities about the dangers of TIF, we urge them to consider the failures in other cities or other developments. Officials in the city of Richmond Heights need not look past the city’s own history and, in fact, the history of this particular development. Developers have had their eye on the area since the late 1990s, and two of the proposals (from Michelson Commercial Realty in 2006 and United Plaza in 2010) seemed like they might actually get off the ground before collapsing, mostly due to the state of the economy following the 2008 crash. Now, Richmond Heights is at it again, enticing Pace Properties and Menards with promises of substantial amounts of TIF ($27 million and $24 million, respectfully).

The interesting thing about Hadley Township is that it is not an example of TIF having a negative impact on an area because it cost taxpayers millions and showed less-than-impressive returns — though that is exactly what could happen if the current plans move forward. Instead, this is a case of a city dangling TIF like a carrot in front of developers but failing to complete any of the proposals brought forth. This has left homeowners in limbo; many have moved on or let their homes fall into disrepair because of rumors that they will soon be bought and torn down. It seems like a dismal outlook for the area — either taxpayers are on the hook for more than $50 million of the developments or the neighborhood is left in the blighted state it has reached because of the failures of the past decade. There is, however, a third option: Ditch the TIF and encourage private developers to take advantage of the fact that many of the residents are willing to sell. Private developers, not TIF, could provide the solution that the residents of Hadley Township have been seeking for so long.

The post Richmond Heights Continues To Ignore A History Of TIF Failures appeared first on Show-Me Institute.

According to the St. Louis Post-Dispatch, Richmond Heights has been entertaining proposals since 2003. Things looked great back in 2006, when the Richmond Heights City Council found a serious suitor in Michelson Commercial Realty and Development. But three years later, Michelson still could not get the financing together even with Richmond Heights officials pledging $46.2 million in TIF. The project was scrapped and Michelson pulled out of the 86 contracts it had signed to purchase all the homes and businesses in the affected area. All told, four separate development plan proposals just like Michelson’s failed.

The (eternally) pending developments have sent the neighborhood into a state of disrepair. Richmond Heights City Manager Amy Hamilton told the Post-Dispatch prior to the City Council’s latest vote that more than 35 properties are in “poor or severely deteriorated condition, and the majority of these properties are owned by land speculators.” Hamilton blames speculators and absentee landlords for the degradation, but more likely, Hadley Township property owners are responding to the incentives the city has offered. Who would really invest significant time and money in home improvements while the city unsuccessfully plots deal after deal to snatch up their properties?

And what do Richmond Heights taxpayers get for all their trouble? With Menards, they get yet another big-box home improvement store on South Hanley Road. If the market really drives Menards, Lowe’s, and Home Depot to locate within a half mile of each other, that is great. But it should not be government’s role to plan the local economy. More importantly, however, taxpayers get to finance $19 million of Menards’ $56.1 million development and $26.6 million of Pace’s $125 million development. (Bonus!)

This really is TIF at its worst.

The post Richmond Heights: TIF Gone Bad appeared first on Show-Me Institute.

None of this had to happen. If the city has stayed out, involving itself only in the potential rezoning, the developer would have made offers to the residents. If he had made a good enough offer, likely all would have sold. And if someone decided not to sell their property and the development died as a result, then so be it. As for the business knowledge of local officials, how about this quote from one of the councilmembers in the Post-Dispatch article:

But Councilwoman Gina Mitten was disappointed.

“A $200 million project — and the developer can’t come up with another $72,000?” said an exasperated Mitten.

Yes, that is exactly how business is done. You come up with a business plan and then you just have as much money waiting on the side as the government wants you to hand over. (This post should not be taken, in any way, as defending the developer. …)

The post Hadley Township Redevelopment Has Been a Disaster appeared first on Show-Me Institute.