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.
4 comments:
Get rich or die trying. It sounds like a sign your lives away problem in Mt. Lebanon. I'm rolling thunder, power and rain. Hells bells!
Middle English morgage, from Old French : mort, dead (from Vulgar Latin *mortus, from Latin mortuus, past participle of morī, to die) + gage, pledge (of Germanic origin).
Don't worry about a thing. Before they know what happened, something else will of happened. None of it good, sorry to say. Good makes it's own ways.
There's not much poverty in Mt. Lebanon.
Shame is ever a part of poverty. Fight nice now kids.
TIFs stink.
And, there is another TIF that is brewing at Castle Shannon over the light-rail stop (T-stop). That is another that stinks.
We need to end TIFs for a number of reasons. I blog and yap about them all the time. TIFs (tax breaks) stink. The load is shifted away from the cronies and onto the backs of the everyday citizens.
Furthermore, the tax-break for one means that others won't want to do a sustainable deal in the area ever more.
Finally, we are seeing TIFs upon TIFs. This year's tax break goes to a place that got a tax break in the past decade. That proves, they don't work.
If you hate TIFs, help me get elected or run and support others who say the same. We are few and far between these days.
Mark @ Rauterkus.com
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