I’m seeing some serious misunderstanding of the financing for the #RVA #NavyHill project - TIF, “TIF district”, which taxes go to pay for what, etc. So let's ask: how will city pay back a $350M loan ($560M w/ interest)? #Thread 1/9 #RVAMayor #RVACouncil
First: city is taking out this huge loan ONLY TO BUILD A NEW ARENA; private $$ pays for hotel, apartments, retail, VCU dorms/labs, and even renovated Blues Armory (GRTC pays for bus transfer station through state funds; no one knows what VCU's role is yet) 2/9
City pays back arena loan over 30 years using the #TIF mechanism and other city revenues. (Again, TIF or tax increment financing pays for a thing using future revenue from that thing) #NavyHill uses THREE pots of money 3/9
POT1: Sales, lodging, admissions & some meals taxes from the arena and its immediately surrounding area; includes new hotel and any new retail/restaurants (I see this as non-controversial – this is entirely new tax money that wouldn’t exist without the project) 4/9
POT2: New meters and parking lots revenue from 80-ish block area we're calling “TIF district” – basically, entire downtown. City sets current base (if $1M now, $1M still goes for schools/potholes/etc.) but any additional revenue (the “increment” in TIF) pays arena loan 5/9
POT3: New property taxes from the TIF district. Again, city sets baseline using valuation instead of revenue. If 80 blocks are valued at $2B now, the property tax on that value – say $30M – is the baseline. (these are fake numbers, FYI) 6/9
Schools/potholes get that $30M every year, but any increase in prop value generates new taxes that goes to the arena. That’s true for arena and new restaurants, but also if another property owner far from arena renovates their building or opens a new store 7/9
Bottom line: some of "increment" or new tax rev is obviously due to project – new restaurants, apartments etc., but also better values for existing properties. Some incremental revenue, tho, + much parking $, would have been there w/o arena. How much? Hard to say. 8/9
That's why council commission needs to come up with year-by-year projections and analyze what's realistic. More here (& more next week):
rvapol.com/blog/2019/8/30…
9/End
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