Adding residential units to Victory is a no brainer. They should have done that at the very beginning. The axiom is that retail follows rooftops, not rooftops follow retail. That is the primary reason the Victory development failed and was handed back to the lenders/partners.
The TIF reimburses the developer for infrastructure costs such as streets and utilities. When the developer's costs are paid back, the TIF stops paying any further monies. There is a good reason for TIFs to exist, and they can be very useful in redevelopments.
The original TIF was to terminate at the end of 2018, not this year.That $3M you mention should flow to the different taxing entities when the monies for the original costs of development are reimbursed. Apparently the costs have not been reimbursed yet, and with the halt in new development at Victory over the past decade that's not hard to understand. The proposed new development will help in retiring that amount owed.
If ArenaCo needs a parking structure, they should be the ones to build and pay for it. The only way a TIF should be used for the garage is if it will be a public parking garage, which is not going to happen. The revenue from the garage should be sufficient to pay for its construction.
Extending the geographical area of the existing TIF should not be allowed unless there is a clear and identified economic basis for its extension. with there not being any major infrastructure needs in the extended area, there doesn't seem to be a credible basis for it.
My quibble would be this: a local municipality's "business plan" assumes that developers will pay the infrastructure costs for their developments and pay taxes. Giving them back the infrastructure cost is no different than giving them back their taxes, or not charging them taxes in the first place. The business plan also assumes that a city will attract development by being a good city, a well run place, and that the development it attracts in such a way will pay full freight -- what everybody else pays. The presence of a new development imposes significant costs on the municipality -- police, fire, every single thing a city does. The city still must bear those costs. So where is the sharp pencil that tells us the city will be ahead or even whole for giving back the infrastructure costs? Do you see any evidence that cities are profit centers in the first place? Taking on long-range losing deals for the up-front boost of new investment, is, I believe, a Ponzi scheme. This is all just soft-pencil voo-doo that heads-up business people would never allow in deals done strictly on their own side of the street. But it's OK for the public side, because, after all, that's not anybody's real money. Is it?
Typically the costs of utilities and streets are borne by the developer who took the land from its undeveloped state- farmland?- and made it ready for the building developers. The building developers tap into the utilities on their property's perimeter and extend them to serve the development they are constructing.
In areas like this, what we'll call "redeveopment" sites, typically the infrastructure is either too aged or too small for the higher density project. So who is going to pay for the new streets and utilities?
That's where the TIF comes in, which is the reimbursement of the tax revenue delta. The increased amount of taxes go towards reimbursement fo the costs. The taxing districts still get the tax revenue they were getting before the redevelopment. Eventually the taxing districts will get the increased revenues once the infrastructure refurbishment costs are reimbursed.
Yes, the redevelopment will increase the costs to the city; but look at the additional tax revenue the city will receive outside of the taxes going to the TIF. Most often the TIF is from property taxes, think about the sales tax being generated by the redevelopment, business property taxes from the collateral development that is generated by the original redevelopment. There should be an echo, although in the case of Victory it has been a long drawn out timeline to realize this echo.
But that echo of additional development and additional tax revenue is there, and will increase going forward. these apartments that the Hillwood/Camden sale will add provides additional taxes.
I disagree with your calling it a "ponzi scheme". It's seed money, there is some risk as there is with any real estate deal. But if the seed sprouts, which has done in a limited way (look at the office and other uses in Victory), it will return many times fold going forward.
But the parking structure is not what should be done with the tax money. If the structure doesn't pencil for the ownership, it doesn't pencil for the public either.