Non-Environmental Cost-Benefit News

A Denver-based nonprofit on Friday released a 32-page report detailing $515 million in tax-increment financing subsidies for almost $6 billion in projects, including such high-profile developments as Stapleton, Lowry, the Pepsi Center and the Adam's Mark hotel.

The report by the Front Range Economic Strategy Center founded by the Denver Area Labor Federation, said the subsidies, known as TIFs, for 24 projects are costing taxpayers almost $30 million a year.

The report is the first of three planned by the center, which compared the financing to "development credit cards" in which future revenues are used to pay back bonds issued by the Denver Urban Renewal Authority. Future reports will examine the economic gains to -DURA's private partners, and the quality of jobs and housing created.

The center recommended that the city account for expenditures in the Denver budget; hold revenue projections on projects accountable against actual performance; consider a ceiling on TIF commitments; and require TIF projects to pay a "fair share" of city services.

The first report raised the ire of public officials.

"Without TIFs, there would be no development at Stapleton, there would be no development at Lowry," said John Huggins, Denver's economic development director. "Downtown would still be a ghost town after 5 p.m. and virtually no one would be living there. I think this report is badly flawed and extremely biased and does not at all reflect the value created by tax-increment financing."

Tracy Huggins, (no relation to John), executive director of DURA, also criticized the report. She said it contains some inaccuracies, but more important, "it doesn't put things into context. Close your eyes and imagine Denver without Stapleton, without the Pepsi Center, without Broadway Marketplace, without the Pavilions. Stop me when I get to a project that people hate."

In Huggins' view, generating revenues is less important than cleaning up blighted areas, saving historical buildings, replacing parking lots with retail centers such as the Pavilions and creating jobs. "Look at Dahlia Square," she said. "When that project (in northeast Denver) is developed, it is not going to pay for itself because it will primarily be residential. But it's going to remove the blighted conditions that have burdened the neighborhood over the past 30 years."

Chris Nevitt, executive director of the center, said his group doesn't oppose TIFs but said they "need to be transparent and accountable to the public. We think TIFs are great. They're a powerful, useful tool and the city should be using more TIFs. That said, is half a billion dollars too much? The answer is, we don't know. But we do know there are hidden costs. What we want to see are a weighing of the costs and benefits."

But John Huggins argued: "They have this notion that TIFs are costing taxpayers money, presuming the development would have occurred anyway, and that is simply not true. It's really a case of land use. Would we be better off if Stapleton and Lowry were nothing but barren patches of land, surrounded by fences? I don't think so."

Subsidized projects

Project |Total Development Cost | TIF Subsidy

Stapleton $3.4 billion $294 million
Lowry $1.3 billion $35 million
City Park South $200 million $8 million
Pepsi Center $160 million $36 million
Adam's Mark $135 million $33 million
Pavilions $99 million $31.46 million

http://www.fresc.org/
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