Today's case in point: Out here in Mt. Lebanon, there's a nice-looking proposal on the table to build a large condo/retail project on the vacant parcel at the corner of Washington Road and Bower Hill road. The developer, Zamagias Properties, appears to have financing in place and is ready to move forward -- if the Mt. Lebanon Commission, the Mt. Lebanon School District, and Allegheny County hand over a TIF.
The Trib and the Post-Gazette have both carried stories about the proposal in recent days, but neither paper has questioned the Zamagias numbers. In fact, the online version of the Trib's story has been changed -- to make matters seem worse for Zamagias than even Zamagias argued they were before.
In fact, the numbers are dubious. Not only is it not clear at all that a commercial development project in one of the region's most wealthy communities needs a TIF under any circumstances, but in this particular case, Zamagias's own numbers suggest that the developer will make a healthy return on its investment even without a TIF. The TIF ends up being a mass transfer of wealth -- from Lebo and County taxpayers, to the hands of Zamagias, for a project that has a positive ROI already.
I've posted a couple of items about this over at Blog-Lebo, and I've posted an online copy of Zamagias' own project projections [pdf; 300 kb], written last summer.
UPDATE (March 7, 2006): The Tribune-Review takes note.
Take a hike: Zamagias Properties is telling Mt. Lebanon officials that it won't build a $28.8 million luxury condominium project without a $4.5 million tax-increment financing package. The 60 condos would sell for, on average, $475,000. Tony indeed. Why should the public help pay for such a thing? Pure and simple, it shouldn't. If Zamagias can't make a buck on this project on its own, the complex should not be built. Taxpayers are not venture capitalists.
Actually, that last line is misleading. The problem here isn't that a TIF would turn taxpayers into venture capitalists. Venture capitalists, after all, are all about returns on their investment. A TIF for Zamagias would produce returns for Zamagias, not for the taxpayers. The problem here is that Mt. Lebanon and County taxpayers are being asked to give up so much in return for so little.