Posts Tagged ‘TIF’

TIF and the Edgewater

February 15, 2010

I’ve seen a whole gang on interesting points made on the Edgewater in recent days, so I’d like to share a few of them with you.

First: Brenda Konkel brings up an interesting motive for supporting Tax Incremental Financing for the renovation: schools. According to Brenda, the proposed changes to the TIF district (which you need to be a part of to receive TIF funding) include James Madison Park (which Ald. Bridget Maniaci has lobbied for), as well as the Lincoln Elementary School.

For those of you unfamiliar with the jist of TIF, the city pays a subsidy which it expects will be paid back through increased property tax receipts that result from the increased property value in the area. It is in the interest of public schools, who are the largest beneficiaries of property taxes, to support plans to increase the property tax base.

Although Brenda seems to use this point to illustrate a sinister scheme by the schools, I see it as a valid point in favor of TIF. The public sector can benefit as well as the private sector. And please no comments about Kelo v. New Haven!

Forward Our Motto, another Edgewater renovation opponent, points out that Madison has been inconsistent with its allocation of TIF money. For instance, Epic, the Madison-based software firm, moved to Verona years ago in an apparent attempt to find a more business-friendly climate. Lukas points out that Verona gave them $14 million of TIF money, which is $2 million less than we’re giving the Edgewater people. Lukas correctly points out that Epic represents a helluva lot more jobs than the Edgewater.

In response I would make two points. First, it doesn’t look like Epic ever applied for TIF funding from Madison. Did they want to stay here anyways? They rejected sites in Madison and Fitchburg before settling on V-town. Take a visit to their headquarters sometime and you’ll understand that the vision their CEO had likely wouldn’t have been possible within the city limits. If Epic approached Madison with some kind of offer and the city told them to go to hell, well, that was very short-sighted. But I doubt that’s what happened. Secondly I would make the somewhat predictable point that the Edgewater is taking place during a recession and we’re desperate for any kind of investment we can get.

Mayor Dave going all out for Edgewater

November 10, 2009

From the mayor’s blog:

It’s a pretty straightforward vote. If the City Council votes this week to take tax incremental financing support for the Edgewater Hotel out of the budget, it’s pretty much over. Almost 1,000 jobs, over $1 million in new taxes, much better public access to Lake Mendota. All gone.

The mayor further emphasizes that even those who have doubts about the project need not vote to kill it right now.

Approvals will still be needed for zoning, design, landmarks and more. Even the exact TIF agreement will need to come back to the Council. Nothing’s guaranteed.

However, there are also alders who are against TIF funding for private businesses period, such as Jed Sanborn. There are others who believe TIF funding is OK, but believe the city has over-extended its use of it.

Vote predictions?

Konkel not down with Maniaci development plan

October 19, 2009

The other day I linked to an article by Joe Tarr, which outlines Ald. Bridget Maniaci’s plans to turn the James Madison neighborhood into a Tax Incremental Financing district. I discussed how Maniaci’s proposal is consistent with the trend of requesting TIF for any development that will bolster the economy, even though TIF was originally designed to prop up “blighted” areas.

Today Maniaci’s predecessor and vanquished opponent, Brenda Konkel, expressed outrage at the idea, writing that TIF districts “encourage tear downs and large developments.”

Most ominous part for Maniaci: “I was leaning towards not running again, but shit like this just makes me mad.”

The political question, of course, is how much of an advantage incumbency is for municipal elections? If Konkel wants to go back to the Council, which she pretty clearly does, what would she need to do to win? I think the answer is to find one issue. Find one issue that gets people to vote against the incumbent. However, it would not be in her advantage to run during a mayoral election year. More people would be interested, and therefore, more moderates and fans of the mayor would be voting.

Maniaci wants TIF funding for James Madison area

October 15, 2009

An article by Joe Tarr at the Daily Page describes Ald. Bridget Maniaci’s plans to redevelop parts of her district, much of which is located in the James Madison Park neighborhood.

To encourage the neighborhood’s renovation, Maniaci would like to declare the area between East Washington Avenue and Gorham, Butler and Blount streets a redevelopment district.

Don Marx, with the city’s planning department, says the city would first have to deem that at least half of the properties are blighted. “It could be a very liberal interpretation of blight,” he says. “For instance, if a house needed new shingles, that could be considered blight.”

Given recent use of Tax Incremental Financing (Edgewater, Capitol Square improvements), it’s clear that many policy makers are not going to bother using the “blighted” argument anymore. Those who protest the use of TIF in already-developed areas are but a small and distant voice in city planning.

In fact, if Maniaci can find a TIF district within a mile of the area she wants developed, she won’t even need to make a case that the neighborhood is in dire need of improvements. It was just the other day that the a Council committee approved the use of TIF funds for a $1.8 million development of Capitol Square, including new benches and sidewalks.

Should the Edgewater project get tax aid?

August 11, 2009

Pretty soon Madison is going to have to change it’s nickname to “The Terrace City.” It seems like the only way this city can think to make money is to give people more and more opportunities to drink beer on a lake.

The Cap Times had an interesting editorial today about the Hammes Company’s bid for Tax Incremental Financing (TIF) for their proposed renovation of the Edgewater Hotel.

TIF, in case you’re not familiar, is what cities often use to finance development projects that will increase the property value in the surrounding area. The idea was originally conceived for developing poor or underdeveloped neighborhoods or areas, however, in recent history it has become a standard request from any developer. Hammes is asking for $16.8 million of TIF funding.

The Cap Times argues that TIF funding should only be granted for the Edgewood project if the developers can guarantee that the terrace will be open to the public at all times, and not merely another venue for high-roller cocktail parties. The Edgewater, which has been an institution among the Madison bourgeoisie for decades, will become even more prone to exclusive gatherings of the elite after a $100 million renovation. Resentment, resentment, resentment.

The Cap Times makes a fair point that will undoubtedly appeal to its readership. The logic also coincides with the original intent of TIF. But the hotel should probably not be completely restricted from holding private events – weddings, charity events, Philip Morris benefits – the kind of things that can also be reserved at Memorial Union. Believe me, when I stopped by the Union the other day to check out an art exhibit there was a very inviting table of imported beer at a 40th anniversary in the room next door. It hurts, but it brings in crucial revenue – at least I hope it does. Ideally, the Edgewater will provide a Union-like terrace, which will become a cherished summer beer garden.

In a couple hours I will be interviewing several (I think several) members of the Hammes development team. I hope to gain some insight on the project itself, as well as some of the political and public relations controversies that have surfaced in recent days. Stay posted.