FROM: Progressive Dane’s Economic Issues Task Force
(Co-Chairs, Vicky Selkowe
& Brian Larson)
The people of Madison want a strong economy, a healthy environment, quality jobs, and the basic amenities that make our city a great place to live. We often rely on the private sector to pursue projects that will help improve our quality of life. In turn, the private sector often seeks help from “the public” – those of us who live and work in Madison, and support it with taxes – to get these projects off the ground. Tax Incremental Financing (TIF) has become an increasingly important tool for promoting economic development goals.
It is reasonable for us to support, with our taxpayer dollars, projects that will improve the lives of community residents. But it is equally reasonable to expect a return on our investment to ensure that: 1) these projects do not harm our city and its people; and 2) the benefits that derive from these projects accrue to the people of Madison, not simply to the private developer or business owner who wants our financial support.
This document contains proposed revisions to City of Madison policy as contained in the September 27, 2004 document, “Amendments to Tax Incremental Finance (TIF) Objectives and Policies…” and the TIF Assistance Application, which we understand to be the most recent articulation of the City’s TIF policy. These specific amendment revisions could also, of course, be included in the TIF paper currently being prepared by the Board of Estimates. Each of our proposed revisions is driven by the following rationale:
1. Need for greater community-based accountability.
As we know, TIF-assisted development projects can have a significant impact on local neighborhoods. Currently, City staff work closely with developers to evaluate TIF-assisted project proposals and to facilitate the movement of those proposals through the approval process. Recently, the City decided to require developers to meet with district alder as well. While this is an important step toward greater accountability, more can and should be done to involve community residents in the process. In this way, developers can obtain community feedback at an early stage in the approval-seeking process, and ultimately can pursue projects that enjoy broad-based community support. In the long run, enhanced community participation translates into development that meets a wide range of community needs.
2. Need for greater emphasis on development quality
and community benefits.
Currently, the City is guided by a general set of objectives and policies with regard to TIF. Given the importance of TIF-funded development in shaping the city’s economic future, it is in the interest of the City, developers, and community residents to establish clear expectations concerning TIF assistance. We can and should prioritize projects that promote diversity and that will create or expand businesses that promote environmental sustainability and provide quality jobs for Madison residents. Developers who receive TIF subsidies should also be expected to clearly articulate what community benefits their project will provide in exchange for the tax advantages they receive. This is not a new concept in Madison, but it has been carried out in an arbitrary and inconsistent way. By systematizing this process – through the establishment of clear expectations as well as mechanisms for ensuring that developer pledges are fulfilled – the City will maximize the benefits that accrue to the community as a result of TIF-assisted development.
The revisions proposed herein are intended to address the concerns outlined above.
Part I. Proposed revisions
to Amendments to Tax Incremental Finance (TIF) Objectives and Policies (the
City’s most recent policy statement on TIF).
TIF OBJECTIVES
Support the Downtown
The proposed development should support continued revitalization of the downtown and implement adopted policies, plans and reports by one or more of the following:
(b) …increase the number and diversity of downtown residents
[ADD: ,with diversity
defined as a wide range of racial/ethnic and/or socioeconomic backgrounds]
(c) Attracting, retaining or expanding businesses
[ADD: ,with priority
given to businesses that provide quality jobs at living- or family-supporting
wages, promote environmental sustainability and otherwise enhance the City’s
economic vitality and quality of life.]
[ADD: (f) Encouraging
the development of locally owned businesses.]
Support Economic Development
Support economic development activities intended to stabilize and diversify
[CHANGE TO: stabilize, diversify, and strengthen] the City’s economic base…
(b) Supporting development of industrial sites to attract new industries and provide suitable locations for expansion and relocation of existing industries
[ADD: ,with priority
given to industries that provide quality jobs at living- or family-supporting
wages, promote environmental sustainability, and otherwise enhance the City’s
economic vitality and quality of life.]
(c) Providing financial assistance to new and existing businesses,
[ADD: ,with priority
given to businesses that provide quality jobs at living- or family-supporting
wages, promote environmental sustainability, and otherwise enhance the City’s
economic vitality and quality of life.]
[ADD: (d) Providing
financial support for the development of locally owned businesses]
TIF POLICIES
2. Ineligible uses of TIF
[ADD: (d) “Boundary
hopping” development that involves loss of jobs and infrastructure from
neighboring communities.]
3. TIF Policies on Housing
(b) Increasing Affordable Housing Capacity….
[ADD: No TIF-funded
development project shall be eligible for a waiver of the City’s Inclusionary Zoning
(IZ) requirements.]
(c) The City encourages [CHANGE TO: prioritizes] housing projects that include additional housing performance standards…
8. General Guidelines for Creating TIF Districts
[ADD: (c) The City
will develop an annual TIF plan and budget, in which it sets priorities for
projects and geographic areas. This plan will help developers to identify and
pursue projects that the City has determined as appropriate and desirable. A
written report about existing TIF districts’ performance and goals for future
TIF expenditures should be widely distributed to community stakeholders to
encourage community oversight and accountability in both future TIF planning and monitoring of existing TIF
districts.
9. General Standards and Practices
(a) The City may [CHANGE TO: will] conduct its own independent analysis of market value or project cost.
(c) Prior to or simultaneous with the initiation of the land use approval process, developers that seek TIF assistance must meet with the district alder, Community and Economic Development staff and other city staff as appropriate.
[ADD: The developer
will finance a mailing for the district alder (the mailing shall have the
alder’s return address) to call a initial public meeting to inform district
residents about the project proposal]
[ADD: City staff will
establish at the initial public meeting (though not limited to those who are in
attendance at that meeting) an Interested Parties Registry. Thereafter, City
staff will notify those listed on the Registry of any meetings to be held and
actions to be taken regarding the TIF project proposal.]
[ADD: As part of the
initial application process, the Developer will provide a community impact
statement that addresses environmental, economic, housing, and traffic impacts
of the project (including both construction and operation phases)]
[ADD: As part of the
initial application process, the Developer will review a list of possible items
for inclusion in the Community Benefits Agreement portion of the project
contract, and will rank those items by feasibility for inclusion in the project
contract.]
(d) All development projects seeking TIF assistance must receive project land use approvals independent of the review for TIF assistance. Project land use approval does not constitute TIF approval.
[CHANGE TO: All development projects seeking TIF assistance must present the TIF request simultaneously with the initiation of the land use approval request.]
(e) The Developer shall abide by City ordinances regarding living wage, prevailing wage and affirmative action on the TIF assisted project.
[CHANGE TO: The
Developer, any contractors engaged by the Developer and any subcontractors
engaged by the contractors to develop the property, and any commercial or
industrial tenants operating in the TIF-assisted development, shall abide by
City ordinances regarding living wage, prevailing wage and affirmative action.]
Part II. Proposed revisions
to TIF Assistance Application
TIF Assistance
Application
6. Additional Questions
·
Have you met and discussed the project concept with the
district alder and/or the neighborhood association?
[NOTE: This would be addressed by requiring public meeting and
establishing Interested Parties Registry]
· Will relocation of individuals or businesses be required?
[NOTE: This would be addressed by requiring community impact statement]
·
Are there any known or suspected environmental hazards
on the site based on testing, history or use?
[NOTE: City should determine this, not rely on developer reporting]
·
Do you or your proposed investment partner(s) in the
proposed project or any other development entity of which you or your
partner(s) have an interest, owe back property taxes to the City of Madison?
[NOTE: City should determine this, not rely on developer reporting]
·
[ADD: Have the
Developer, the proposed investment partner(s), contractors, subcontractors, or
prospective tenants been found in violation of local, state or federal
environmental regulations in the last 24 months?]
·
[ADD: Have the
Developer, the proposed investment partner(s), contractors, subcontractors, or
prospective tenants been subject to an Unfair Labor Practice finding by the
National Labor Relations Board in the last 24 months?]
·
[ADD: Have the
Developer, the proposed investment partner(s), contractors, subcontractors, or
prospective tenants been involved in a labor dispute in the last 24 months?]
[ADD THE FOLLOWING
SECTION]
Community Benefits
Agreement
As part of the TIF application process, the City will
require the Developer to clearly articulate what community benefit(s) will
accrue in return for TIF assistance. Specifically, developers who receive TIF
subsidies should be expected to provide measurable community benefits in such
areas as job quality and environmental protection in exchange for the tax
advantages they receive. The Developer is expected to identify at least
three items on the following list of community benefits that will be feasible
for this proposed project. If the Developer identifies five items, it may
be possible to expedite application processing or provide other benefits to the
Developer.
The City will then negotiate a Community Benefits
Agreement (CBA) between the City and the Developer as part of the project
contract. The Interested Party Registry will be notified of these negotiations
so that community residents will have the opportunity to provide input. The
finalized CBA will become part of the official project contract signed by the
City and the Developer and will be subject to review by the project’s Oversight
Committee.
·
Developer agrees to allocate a share of jobs
generated by the TIF project to workers from the project’s immediate
neighborhood or workers defined as disadvantaged by the City’s Affirmative
Action Department, in the following job areas:
·
Project construction: _____ number of jobs expected
to meet or exceed this criterion or ____ percentage of jobs expected to meet or
exceed this criterion out of total project construction.
·
Property maintenance: ___number of jobs expected to
meet or exceed this criteria or ____ percentage of jobs that will meet or
exceed this criterion out of total property maintenance.
·
Employment with commercial/industrial tenants
occupying property: ___number of jobs expected to meet or exceed this criteria
or ____ percentage of jobs that will meet or exceed this criterion out of total
property maintenance.
·
Developer agrees that a share of jobs generated by
the TIF project will offer wages that exceed the City’s living wage by a
percentage.
·
Project construction: ___ number or ____ percentage
of total jobs expected to be paid wages at ____percentage about living wage.
·
Property maintenance: ___ number or ____ percentage
of total jobs expected to be paid wages at ____percentage about living wage.
·
Employment with commercial/industrial tenants
occupying property: ___ number or ____ percentage of total jobs expected to be
paid wages at ____percentage about living wage.
·
Developer agrees that a share of building materials
will be recycled
·
Recycled building materials: ___ percentage of total
building materials.
·
Developer agrees to comply with “green” building
standards
·
Developer agrees to exceed Inclusionary Zoning (IZ)
affordable housing requirements.
· IZ affordable housing: ___ percentage or _____number of units above IZ requirements.