The Carbondale Observer

News and commentary about Carbondale, Illinois and SIUC

City Council Meets Tonight, Downtown TIF on the Agenda

with 5 comments

The Carbondale City Council meets tonight at the city hall/civic center. The meeting will be preceded by a liquor control commission meeting beginning at 7:00 p.m. The agenda is available on the city’s website. As usual, I’ll be watching from home on Mediacom channel 16.

This is going to be an important meeting. If you check the agenda, item 5.6 (pdf) is consideration of a TIF (Tax Increment Finance) district for downtown. This is a potentially thorny issue. Here’s how a TIF works: the city creates a TIF district. Private businesses invest in improving property within the district. This increases the amount of property tax generated on the property. The difference between the pre-investment tax and the post-investment tax is called the increment.

The increment goes into a special fund controlled by the city. A portion of that fund can be used to reimburse the developer for some costs, as provided by law. The increment can be shared with other taxing bodies (like school districts or the park district). The increment can be used by the city to fund infrastructure improvements within the district. Because developers can be reimbursed from the increment, TIF can provide an incentive for developers to invest in a certain area. Because the incentives spur private development and generate new funds for public use, TIF can be a win-win.

That’s the rosy scenario, but it’s not the only way to view TIF districts. Another way to view a TIF is to say that the incentives – subsidies, basically – lure development away from the places where it makes most economic sense, resulting in poorer overall economic performance. A TIF can distort the functioning of the marketplace and make otherwise unprofitable investments attractive, resulting in misallocation of resources.

I’m agnostic on TIF districts. They can certainly be used for mischief, as Marion, our neighbor to the east, demonstrates. Carbondale’s one experience with a TIF district has had mixed results at best. But I also think a well designed TIF can be a valuable tool that can induce risk averse private businesses to take the plunge and make profitable investments in otherwise neglected parts of town.

I need to see more before I can decide whether I support a downtown TIF. Specifically, I’ll need to see design standards for new buildings and the incorporation of mixed uses before I can support this idea. If we’re going to bulldoze Illinois Avenue and build a series of single-story, single-use strip malls with parking lots between the buildings and the street, then I’m against the plan. If we’re going to build two, three, or four story mixed use buildings with commercial uses on the ground floor and apartments or offices on upper floors and with parking in garages or behind buildings, then I’m enthusiastically in favor of a downtown TIF.

I’ll have another post later this week on what a good downtown should look like. We don’t have to reinvent the wheel. There are solid examples of good urbanism, and we can emulate those. There are also bad examples we could emulate. It’s almost impossible to overstate how important these decisions are. If you watch or attend only a few council meetings each year, put the meetings concerning a downtown TIF on your must-see or must-attend list.

Comments are welcome.

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5 Responses

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  1. You say correctly that we don’t have to reinvent the wheel, but our history is replete with examples of our trying to do just that, with poor results. Sadly, there is something about our civic ego that seems to forbid learning from others. I hope we have passed that point.

    John Holt

    June 26, 2012 at 7:59 am

  2. […] in my view, the most important item on tonight’s agenda. I wrote a post yesterday explaining how a TIF works. This item, which passed unanimously, did not establish a TIF district. It authorized the city […]

  3. […] written about the proposed downtown TIF twice before (one, two) and I’ve been working (very slowly) on two posts about what a downtown should and […]

  4. […] Stadium Grille building. To read about how TIF districts work, see paragraphs two through four in this post. I don’t have any problem with this TIF agreement, but I want to use this as an opportunity […]


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