Press Release: Community leaders call for changes in Governor's "tax increment financing" bill - it's another subsidy for Paul Allen's plans in S.Lake Union
Date:
Mon, 09 Feb 2004 13:17:22 -0800
Community Leaders Release Letter Calling for Changes in Governor's Tax Increment Financing Bill HB 1281 SB 5364 or it's just another subsidy for Paul Allen's Plans in South Lake Union and other big ticket projects:
For more information, contact 632-0668
37th Rep. Sharon Tomiko Santos Proposes Amendments to the Gov's Bill That Reflect Community Concerns - Five Seattle City Councilmembers give their support to Rep. Santo's bill. Rep Santo's amendments would prevent giveaways for Big Developer schemes while ensuring use of TIF for truly needy, low income, and minority communities.
Last week, an ad hoc coalition of community leaders forwarded a letter to our State Legislatore calling from substantial changes to the Governor's Tax Increment Financing (TIF) bill SHB 1281 (And Senate Version 5364). Signed by over 70 activists from Seattle and other parts of the region (see list of signatories below letter), the letter calls on the State Legislators to substantially amend this legislation. As written, community leaders charge that "the bills are an open invitation for abuse by local governments. More specifically, they are little more than a new form of subsidy for big developers that will also adversely affect small businesses, existing jobs, and local resident needs."
Under the legislation, a city could draw boundaries of almost any size (and easily around whole communities) - then take nearly all new tax dollars generated in those areas that would have otherwise gone to the general fund, and instead use them to subsidize large redevelopment schemes within those areas. New taxes (above those collected in prior years) that otherwise would have gone into the city, county, or state's general fund to meet basic needs – both property and sales taxes – would instead be taken to pay for big ticket projects such as Paul Allen’s current multi-million dollar plans for Seattle’s South Lake Union.
In effect, community leaders say these TIF bills "allow tax subsidies to pay for infrastructure in areas where growth already is occurring and where developers already are benefiting from that growth" and as such, "these bills merely relieve developers of the responsibility of sharing in the costs of providing infrastructure within these areas, shifting the entire burden onto the shoulders of local residents and small businesses." Given the enormous costs associated with his plans, the Mayor of Seattle has been quietly working to get TIF approved as a way of relieving Paul Allen of any responsibility for sharing in those costs. TIF also could be used state-wide to promote Wal-Marts, other Big Box and strip mall developments at the expense of existing small businesses, existing local business districts and the jobs they provide. Citizens also charge that the Governor's bill allows tax subsidies for big development that will cause direct displacement of low income housing and does not require developers benefiting from these subsidies to provide even one dime of mitigation - either replacement low income housing or assistance to displaced small businesses.
Eric Pettigrew from the 37th District is a prime sponsor of the Governors bill. Sharon Tomiko Santos, also of the 37th District and Majority Whip in the House is attempting to secure amendments to the bill supported broadly by the community. Five Seattle City Councilmembers have also given their written support to the Santo's Bill. .
The Displacement Coalition is calling on legislators to support Rep. Santo's changes or the bill must be killed. Santo's changes include:
1. Add a definition for low income housing and add it to the list of public improvements allowed under the bill.
2. Include specific criteria to define blight so that use of TIF is restricted exclusively to these areas, and require feasibility studies that analyze potential TIF districts in relation to those criteria and that estimate displacement effects on small businesses, existing jobs, and low income housing
3. When there is displacement of small businesses and low income housing, require cities to guarantee no net loss of low income units at comparable price, provide direct relocation assistance to small businesses and tenants threatened with displacement, and give cities the discretion to use TIF but for low income housing and truly needy communities only
4. Limit the boundaries of urban TIF districts to a set number of contiguous blocks or a set number of acres and within throwing distance of the TIF funded improvements themselves. Spell out specific penalties for local jurisdictions that abuse use of TIF, and require public hearings, environmental review, and an affirmative right of appeal for citizens and small businesses first to the State Auditor and then to the courts.
The State Labor Council has raised several additional matters about the Governor's bill and the Coalition supports any changes that can be made to accommodate their concerns as well. The Displacement Coalition is calling on citizens to call their legislators and urge them to support Rep's Santos amendments and give support to labors concerns so we can turn a lemon into something that really could do something valuable for our community. Or as they say, the bill should be shelved. Below is the actual copy of the letter most of the signatories attached. For more information, contact 632-0668
Text Begins Below: (Displacement Coalition is responsible for all of the text above - only the letter below is co-written and co-signed by the signatories)
Open Letter from Community Leaders to Our Legislators
(4554 12th NE, Seattle Washington, 98105 contact: 206-632-0668)
Re: SHB 1281 (And Senate Version 5364) Tax Increment or Community Redevelopment Financing Bill
Please amend the current “Tax Increment” or “Community Redevelopment” Financing Bills. Without critical changes, SHB 1281 and SB5364 must not be approved. Unless changes are made please vote “No”
As community leaders from the City of Seattle and surrounding area, we are writing to strongly urge you to amend the current versions of SHB 1281 and the Senate version SB 5364 that would authorize use of “tax increment” or “community redevelopment” financing across Washington State. With passage of these measures as written, the bills are an open invitation for abuse by local governments. More specifically, they are little more than a new form of subsidy for big developers that will also adversely affect small businesses, existing jobs, and local resident needs.
Under this TIF legislation, a city could draw boundaries of almost any size (and easily around whole communities) - then take nearly all new tax dollars generated in those areas that would have gone to the general fund, and instead use them to subsidize large redevelopment schemes within those areas. New taxes (above those collected in prior years) that otherwise would have gone into the city’s general fund to meet basic needs – both property and sales taxes - would instead be taken to pay for big ticket projects such as Paul Allen’s current multi-million dollar plans for Seattle’s South Lake Union.
Over time as more of a jurisdiction’s lands are roped off and turned into a TIF districts, more and more of that locality’s future tax revenues are drained away including revenues that are needed by the other overlapping tax jurisdictions. In state after state where there are few restrictions on where TIF can be used or how large a TIF area can be (as is the case with these bills), TIF districts proliferate draining away in some cases as much as 15-20 percent of municipal budgets. After these tax dollars are diverted, cities are forced to raise additional taxes to cover budget deficits or cut back on police, fire, housing, and human service programs. And there is less money available for economic and job development in truly needy areas.
The claim is made that TIF will stimulate new growth that otherwise would not occur, and thus lead to added tax revenues and jobs. But these bills, as written, do not contain adequate limitations restricting use of TIF only to “brown”, blighted, or deteriorated areas not already experiencing growth. As such, TIF will more often occur in areas where high levels of growth are already anticipated or occurring. That’s because these are areas where there is confidence that enough new tax revenues will be generated in future years to pay off the bonds that were floated for the TIF improvements. Wealthy cities like Seattle will grab the program for folks like Paul Allen but it will be too risky to use in low growth or truly blighted areas.
Given that these bills allow tax subsidies for infrastructure in areas where growth already is occurring and where developers already are benefiting from that growth, these bills merely relieve developers of the responsibility of sharing in the costs of providing infrastructure within these areas, shifting the entire burden onto the shoulders of local residents and small businesses. Where the Growth Management Act says developers should at least share some of the costs, these TIF bills relieve them of any and all responsibility.
These bills as written also do not include adequate language to prevent localities from promoting big box retail activity, such as Wal-Marts and strip malls, and other planned commercial development when that development directly competes, takes business away, causes the loss of jobs, and forces closure of longtime shops and stores within existing local communities. Unlike other states that set up strict criteria to ensure that TIF does not displace existing businesses, these bills offer a handout to any area of the city and to any big developer strong enough and rich enough to sway local government to foot the bill regardless of its impact on our communities. Contrary to what the Governor’s office may be telling you, the language they have added to their bills to address this issue is wholly inadequate and an invitation for abuse.
When cities subsidize brand new development and use TIF in areas where growth already is occurring – that brand new development invariably causes displacement not only of small businesses but also the loss of low income housing. Paul Allen’s plans in South Lake Union threaten hundreds of existing small businesses and will cause the loss of dozens of low income housing units. The Governor’s bill provides no mitigation for these impacts and TIF funds are not even available for such a purpose.
In conclusion, we urge you to make the following amendments to these bills. Without such changes, these bills should not be approved:
Thank you very much for you consideration. Please make these changes to the bill or please vote no on the measure.
Sincerely,
(Signatories below have signed as individuals. In the interest of time, they’ve given us permission to type in their names. Unless otherwise stated any affiliations listed are for identification purposes and do not necessarily reflect positions of those groups)
Jan Brucker
46th District and Northgate Activist
John V. Fox
Seattle Displacement Coalition
Patricia Stambor
Magnolia Resident
2540 37th W 98199
Carolee Colter
Southeast Seattle Resident
Dean Paton
Sinan Demirel
Seattle Displacement Coalition
Goef Logan
Craig Salins
Gary Clark
Capitol Hill Resident
Chris Leman
Eastlake Resident
Carla Bueno
Ishbel Dickens
Sue Koeller
4714 Ballard Ave. NW 98107
April Thanos
Mike Maloney
Green Party of Seattle
Janine Blaeloch
Paul Richmond, Esq.
600 First Ave, #618
Todd Kephart
Brady McGarry
Students for Fair Trade
Leslie S. Myers
Katy Carter
Matt Fox
University District Resident
The Rev. David C. Bloom
Interfaith Task Force on Homelessness
Bill Grace
Alice Woldt
Rev. Bill Kirlin-Hackett
Redmond, Interfaith Task Force on Homelessness
Alvin M. Sion Ph. D.
Kent Kammerer
Lorraine Pozzi
Maureen Bo
Puget Sound Alliance for Retired Americans
OPEIU Local 8 Member
John McLaren
Olympia Resident
Mike Smith
Pike Market Neighborhood
Bette Reed
Joe Martin
Central Area Resident
Paul Loeb
Jean Kim
Presbyterian Clergy
Homeless Advocate
Marvin Eckfeldt
Retired Minister The Christian Church
(Disciples of Christ), Kent Wa.
Phil Bereano
37th District
Sally Kinney
Dan Merkle
Pablo Stanfield
Flo Beauman
Rick Barrett
Irene Wall
Phinney Ridge Community Council
207 N. 60th St 98103
Rick Hangartner
Lower Queen Anne Resident
Susan Tillitt
Lower Queen Anne Resident
Trevor Griffey
Richard Elliason
Save Seattle Trees
4419 Latona NE 98105
John Barber
Ryan Vancil, Esq.
Bricklin, Newman, Dold LLP
Colleen Dooley
Cascade
A. Malaika Lafferty
Cascade
Vishaka Smith
Tim Baker
Christal Wood ED
Gotham Communications
Dorothea H. Wilford
David Gordon
Susan Fowles
Dick Burton
Co-Chair for Political Action
Seattle Community Colleges Federation
Of Teachers AFT Local 1789
John V. Fox Page 4 2/10/2004Thalia Syracopoulos
Queen Anne Resident
Joe Read
10th District Whidbey Island
Curt Firestone
Community Activist
Former City Council Candidate
Dorothy Gordon
909 N. 35th 98103
Ben Wocjik
Belltown Resident
Kris Weber
Cheryl Jones
Cascade Resident
Carla Miller
Mary Klein
Queen Anne Resident
Dave Ihnen