Thread by @rjmarr

Here's more on the #TIF financing that will pay for #NavyHill arena. How do TIFs go wrong, and can we avoid it here in #RVA? #Thread 1/12
#RVAMayor #RVACouncil

First, a reminder: TIF uses future revenue from a thing to pay for that thing. (More in this thread from last week:

https://twitter.com/rjmarr/status/1167415970677297152

) 2/12

Lots of skepticism about TIF, especially from Chicago, where TIF districts eat up 1/3 of city revenue:
illinoispolicy.org/report-tifs-fa… 3/12

TIFs go wrong in at least 3, maybe 4 ways, although city says they've avoided some of these. Let's see: 4/12

(1) Speculative TIFs set up TIF districts and just hope to attract private development, but it never arrives. Not a problem in #RVA, says city - we've already lined up $900M in development (hotel, apartments, etc.), and city won't borrow for arena until contracts are signed 5/12

(2) Zombie TIFs set up in "blighted" districts to spur development. But stay in place long after nabe is gentrified and doesn't need city $$, becoming slush fund for developers and city. Not in #RVA, says city - TIF only pays back arena loan 6/12

(Although I should note that that it’s unclear to me from the TIF ordinances how the TIF fund would be dissolved; this is something city should clarify) 7/12

(3) Failed TIFs do not generate enough revenue to pay for improvements. This is bigger problem for #RVA; city says there will be plenty of money, but other folks are concerned; we def need more evidence on projections 8/12
nocoliseum.com/category/other…

(THO City is right that a default on the arena loan shouldn’t have any effect on the city’s bond rating or ability to borrow elsewhere, at least according to Brookings study)
brookings.edu/blog/up-front/… 9/12

(4) Toughest call: TIFs may have "opportunity costs" in diverting $$ that could be used for something else. Because TIF district is so big (all of downtown), uses some $$ that would be there anyway and could go to schools, roads, etc. 10/12

Plus some development could happen anyway. If convention hotel is such a no-brainer, why does it need arena? Wouldn't developers want to build apartments anyway? Won't #VCU expand no matter what? 11/12

Bottom line: TIF isn't biggest concern, instead revenue projections and development pipeline. New #RVACouncil commission members should make these underlying assumptions a priority in their review. 12/End

More on #NavyHill here: rvapol.com/blog/2019/9/4/…

This just in: @JGriffRVA reports that Hunden advisor told #RVACouncil yesterday that they encourage cities to set up just this kind of slush fund, so yaybo nocoliseum.com/2019/09/04/not…