Redevelopment Commission Brings Portage Prairie into Airport TIF District
On June 25th, the South Bend Redevelopment Commission voted to incorporate approximately 330 acres of the Portage Prairie project into the Airport TIF District. Marty Wolfson, representing the viewpoint of the Coordinating Committee of the Community Forum for Economic Development, testified at a public hearing held by the Commission. He pointed out the costs of this action, which include the loss of future tax revenue to our schools, libraries, City, County, Transpo, and other taxing jurisdictions, and the potential negative effects on economic development in the core areas of South Bend.
Click on the link below to read the entire testimony.
TESTIMONY FROM MARTY
WOLFSON
REDEVELOPMENT
COMMISSION MEETING
JUNE 25, 2008
The Redevelopment Commission will
decide today whether or not to incorporate the entire Portage Prairie area into
the Airport Economic Development Area. This is a very important decision that will have major long-term
implications for the City of South Bend.
Given the significance of the
decision, the time for discussion and debate by the public has been relatively
limited. This hearing was noted at the
last Redevelopment Commission meeting June 11th, but without any
mention on the Commission agenda that the hearing was about Portage
Prairie. The resolution that the
Commission will be voting on today was only posted on the Commission’s website
last week.
We understand the reason for the
rush: after July 1st, expansion of the boundaries of a TIF district
will require approval of the Indiana Economic Development Commission. While it
is understandable for the City to want to maintain local control, it is still
not sufficient justification to rush into such a significant decision without
enough time for substantial public discussion and input. If the case for including Portage Prairie is
strong, then it should be able to prevail at the state level.
The decision today is being
portrayed as costless, as just keeping our options open, because no additional
TIF revenue — over and above the $1.6 million in TIF funds already spent for
Portage Prairie on the Dylan Drive project — is being committed at this
time. But representatives of the
Holladay Corporation have indicated that they will be coming back to the
Commission in the near future to request TIF funds. Indeed, that is the very reason that Holladay
says it wants to be in the Airport TIF district, rather than in its own TIF
district; the Airport TIF district is where the money is.
And the drain on Airport TIF funds
by Portage Prairie could be substantial, possibly in the vicinity of $30
million. Representatives of Holladay
have said that the multimillion-dollar interchange project is absolutely
necessary for the success of the Portage Prairie project. They have not said the overall amount of TIF
funds they plan to ask for, but it would seem prudent for the Redevelopment
Commission to know this number before bringing Portage Prairie into the Airport
TIF district.
Members of the South Bend Common
Council raised concerns on Monday about Portage Prairie draining money away
from projects in the core City, such as LaSalle Square and the Studebaker
Corridor. They added an amendment to
their resolution stating that these two projects would remain the priorities
for Airport TIF funds. This is a good
statement, but what is its real meaning when Portage Prairie asks for $30
million?
There is another real cost
associated with the decision to incorporate Portage Prairie into the Airport
TIF district. Doing so means that
property tax revenue generated in Portage Prairie will be unavailable to our
schools, libraries, City, County, and other taxing jurisdictions.
We are already closing our
libraries on Saturdays because of the revenue caps associated with HEA
1001. We are already facing cutbacks in
police, fire, and other needed services in the City of South Bend. We are
facing a recession that is likely to reduce jobs, income, and tax revenue
available to states, cities, and counties.
But not only will tax revenue from
Portage Prairie be unavailable to the taxing jurisdictions; Portage Prairie
will create additional costs, for fire and police protection, for schools and
libraries, for parks and other public services.
And it will create other costs to
society as a whole, in terms of urban sprawl, higher transportation costs at
$4-a-gallon gasoline, and global warming.
Finally, there is another cost, and
one that may be the most significant: the cost to development in the core of
the City of South Bend, and the cost to jobs for core-city residents. It will be difficult and costly for
inner-city residents to get to Portage Prairie, and, given the lack of public
transportation, next to impossible without a car.
And what do we expect will happen
to development in the City’s core when massive resources are attracted out to
Portage Prairie? It is not reasonable to
subsidize development in fringe areas of the City and expect that we still have
a level playing field in which core-City development is not affected.
Well, some will say, you can’t
fight the market, people just want to go to Portage Prairie. No, it’s not the
market — it’s a multi-million dollar public subsidy that will even make
Portage Prairie possible. What would
happen to the west side of South Bend if we poured $30 million into its
development? If we want to create jobs,
what’s wrong with creating them in places where people are now living?
This is not an argument against
growth and development, but an argument about the priorities for public
subsidies. We can’t lose sight of the
purpose of economic development: to raise living standards and opportunities
for all, including the jobless, the poor, and those who have been left
behind. That purpose is as important in
deciding about Portage Prairie as it is in all decisions about economic
development.