The State Journal-Register
The pitch sounds great: About 120 new, quarter-of-a-million dollar homes, built east of Hilltop Road in Springfield where nothing currently stands. We aren’t opposed to seeing new housing constructed in the city, but we’re troubled with the way Rochester Route 29 Group wants to get it built. The developers are asking the city to establish a new tax increment financing district that would help put in streets, sewers and other infrastructure needs.
But developers John Stites and Todd Byers are seeking different type of TIF than the existing eight in the city. Most TIFs are in already developed areas that have fallen into disrepair; developers request existing increment from the TIF for projects that will increase property values. The type of TIF being requested would instead require the developers to take a risk as they would need to acquire loans to pay for the infrastructure work, and be reimbursed as the houses were built and started generating tax revenue.
The first approval for that process is scheduled to be considered at Tuesday’s Springfield City Council meeting, where aldermen will consider a resolution that if approved would declare the city’s intent to establish a TIF district. That approval is needed to complete a feasibility study to determine if that area even qualifies to be a TIF district — and that could be a challenge.
Vacant land is difficult to qualify for a TIF district and would have to meet other standards. One possible criteria, as reported in Sunday’s SJ-R, could be showing it’s in a flood plain and development would help with flooding or drainage problems.
But a TIF is supposed to go into areas considered blighted, and while the state’s definition of that has been grossly generous at times, it’s hard to see how land with no structures on it could meet that definition. This proposal at face value appears to be a misuse of the process. This would manufacture out of nothing a TIF. Other subdivisions did not need a TIF in order to be built. The price of the homes, which are estimated to be an average of $265,000, can include funds to recoup the costs of sewers, streets and other infrastructure.
We echo the concerns of Ward 7 Ald. Joe McMenamin, who worries this type of TIF could set a precedent that encourages developers looking for assistance with infrastructure costs to ask that a TIF be established.
Approval Tuesday would not just allow the feasibility study; it would start the clock on when the developers could request reimbursement for their costs. This seems to be an end-around the process housing developments usually have to go through in the city. Aldermen should vote this one down.
Joe McMenamin for Ward 7 