09-10-18 Community Investment - Laserfiche WebLink

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CITY OF SOUTH BEND I OFFICE OF THE CLERK figures in the 2017 report from Community Investment were left blank, so it was hard to analyze. To Mrs. Broden's point,the process needs fixing. The Council needs to be cognizant of how much this is going to cost. The packet did not tell us how much money we're giving up in taxes, so how do you make a decision when you don't know the return on investment or the amount of taxes? The taxpayers see their property value go up, so I think there needs to be a real evaluation. The City posted a$62 million deficit last year. I don't know if we can afford tax abatements. I want to bring these points out as a citizen, a taxpayer and a homeowner. Looking at the City deficits and that our cash reserves are down$87 million in the last three (3) years. I would like to know how much money we are giving these people. Mr. Mueller stated, We are talking about tax abatements, and we mentioned earlier today that this is a tax phase in so we're losing zero (0) dollars. I can assure you that these projects would not have moved ahead without the incentives. All of the benefit that we are going to get from this increased assessed value would not exist, so we would actually be losing money by not incentivizing these projects. Regarding the comment about TIF versus tax abatements, we talked about the philosophy of incentives in December and one (1)of those slides is in our appendix in this presentation. This shows that the benefits of using tax abatements include mitigating risks, and closing financing gaps because the market does not necessarily support the costs of construction right now. Construction costs are high, and you aren't going to make that up through the rent you're charging, so you have to fill in the gaps. Larger projects are more complicated, and sometimes we challenge developers to do larger projects than what they bring to us. There are also competitiveness issues, and other policy goals such as sustainability, equity, or other things we like to promote with incentives. We're trying to move more of the development to tax abatements because that is an inexhaustible supply with less risk. It is lower risk to the taxpayer than TIF, and it scales with new investment levels. It also only goes into effect if and when a project investment occurs, as opposed to putting TIF into a project that starts and then fails, and you're left with a half-completed project. The tax abatement only goes into effect if the project is done. You're not limited by geography or competition of other supported projects. We're trying to free up TIF funds for use with more public investments such as the Parks and Trails Investment, neighborhood plans and public infrastructure. Committee Chair Ferlic reminded committee members, We are just looking at extending that time period specifically. Committeemember Sharon McBride made a motion to send Bill Nos. 18-42, 18-43, 18-44, 18-45, 18-46, 18-47, 18-48, 18-49, 18-50, 18-51, and 18-52 to the full Council with a favorable recommendation. Committeemember Regina Williams-Preston seconded this motion which carried by a voice vote of three (3) ayes. With no further business, Committee Chair Ferlic adjourned the Community Investment Committee meeting at 4:46 p.m. Respectfully Submitted, v` Gavin Ferlic, Committee Chair EXCELLENCE I ACCOUNTABILITY I INNOVATION I INCLUSION I EMPOWERMENT 455County-City Building 227 W.Jefferson BvldI South Bend,Indiana 46601Ip574.235.9221 f574.235.9173 TM574.235.5567;www.southbendin.gov 9