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SCHENECTADY
TIFs could help save city neighborhoods
Legislature expected to allow bonding
BY KATHLEEN MOORE Gazette Reporter

    It turns out that most of the country knows how to save Schenectady’s neighborhoods.
    For years, they have been using an obscure type of municipal bonding to create the projects that cities desperately need to revitalize their neighborhoods with new homes and businesses.
    It’s called tax increment financing, and although it is used in 48 states, it is so unknown in New York that the Schenectady City Council sat through a half-hour seminar this week just to learn the basics.
    They have plenty of time to study because the state Legislature has not yet voted to allow full TIFs, as the bonds are known. A vote is expected this month.
    City officials are hopeful that it will pass because they believe they have exhausted every other option for widespread redevelopment of Schenectady’s neighborhoods.
    The simplest option, from a fi nancial perspective, would have been to persuade developers to buy up dilapidated homes on a residential street and rebuild with private funding. That would cost the city nothing.
    But the simple truth is that developers are not lining up to rebuild Schenectady’s residential streets. Even individual houses are rarely rebuilt; when a house burns down or collapses, the city usually has to pay for demolition because the owners abandon the property. Block-by-block development has been left in the hands of the city’s housing nonprofits, primarily Better Neighborhoods Inc., which is trying to restore Emmett Street.
    Private developers can rarely make enough of a profit to make a large residential project worthwhile in the city, Zoning Officer and TIF expert Steve Strichman said.
    “An acre of city land costs about $1 million,” he said. “In the suburbs, clearing land is much cheaper. You don’t have asbestos abatement, demolition.”
FRUSTRATION
    Even when developers try, the enormity of the task defeats them.
    On East Front Street, a coalition of developers and architects spent five years trying to find a way to pay for the demolition of several buildings, clear the land and build housing to create a beautiful riverside community.
    They had the backing of the city, the neighbors and even DEC, which granted permission for docks.
    They still couldn’t finance even one new house.
    Without TIF money, Strichman said, the project won’t happen.
    The way TIF works is simple — yet risky. The city finds a developer who can be trusted to complete a specific project on a strict deadline. Then, preferably with that developer signing on as co-borrower, the city gets a TIF bond to fund some of the work. Generally, the money is used to acquire the land and prepare it.
    “It’s gap financing,” Strichman said. “You must prove the project will not occur without TIF money.”
    Then the developer buys the land from the city and begins work. Meanwhile, the city uses the money from the sale, plus reserve money built into the bond, to make the first few years’ payments. ..............>>>>......................>>>>..................http://www.dailygazette.net/De.....r00103&AppName=1

Correction:

"they have exhausted every other option for the fleecing of  Schenectady’s residents. "

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The way TIF works is simple — yet risky. The city finds a developer who can be trusted to complete a specific project
on a strict deadline.

Or, more importantly, who is politically connected and willing to make a substantial donation to the campaign election
accounts of those in government who selected the developer.

More government control.  More redistribution of wealth.  More fleecing of Schenectady County residents.

Another reason to leave Schenectady County and New York State.

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    In other cities, it has been highly successful. Chicago has created 40 projects in three years using TIF. Officials there said they have come to rely on TIFs to spur economic development, both commercial and residential. They have an entire department devoted to managing current TIF projects and carefully analyzing proposed new developments.
    The program has helped created a “development boom” in Chicago, they said.

This has to be the most laughable of the entire article. Schenectady is using Chicago as a MODEL? Where sales tax is 10%? Where corruption and pay to play is their way of doing 'business as usual'?

Our inept local government officials have yet to see that no matter who or what cleans up and rebuilds the less than desirable home/buildings in Schenectady.....no one will buy them or move here due to the ridiculous higher taxes and the pathetic school system. So here we go again....throwing 'our' good money to bad.

And just think....10 years ago when the reps gave birth to the metroplex.....we were told the identical same thing. Remember, how they were going to bring lower taxes?(joke). How there would be an influx of jobs? (joke) How it would improve the quality of life for all who reside there? (joke)

FACT.....TAXES HAVE INCREASED, THERE ARE NO NEW JOBS TO SPEAK OF, THE QUALITY OF LIFE HAS DECREASED AND CRIME AND WELFARE RECIPIENTS HAVE INCREASED AT AN ALARMING RATE!

Yup....that's what we are all hoping for....another chicago.  

The problem with City neighborhoods is not lack of housing. It's surplus housing. The fact that the last Metrograft plan for "condos" on Union St went belly up should have been a final wake up.

      MT is right this is yet another way to fleece the sheeple taxpayers.

Redistribution to whom?????? for whom????

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Redistribution of public revenues collected from the county residents to private developers who will benefit from the
award of funding to then sell overpriced and overimproved housing to those who cannot afford, without multiple
government handouts, to either purchase property or pay the taxes.

Kind of like over investing???? although I think FDG's heart is in the right place,,,I believe he feels he over invested in Rotterdam
I wonder how all the politicians feel their properties are 'over invested' in the county/state??????????

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EDITORIALS
TIF a valuable tool for cities

    With federal and state aid generally drying up, and the Empire Zone program apparently ending, cities in New York need whatever tools the state can give them to help themselves. One excellent one is Tax Increment Financing (TIF), widely used in 48 other states to provide a catalyst for private development projects, and keenly desired by the city of Schenectady and Metroplex.
    With TIF, municipalities can encourage developers to do projects — commercial, industrial or residential — that otherwise wouldn’t be done because financing is unavailable, or the initial cost is too high or expected revenues too low. The municipality fills the gap by bonding and using the money for such things as land acquisition, site preparation, roads, sidewalks, streetlights, water lines.
    The borrowing is based on the expected increase in assessed value of the property — i.e. the “tax increment” — with the new tax revenues going for a specified period of time to paying off the bonds. It’s money the municipality would not have been getting anyway — since the taxes paid on nothing are nothing. But the municipality benefits immediately from increased property values in the area around the project, as well as other new development it might stimulate. And after the bonds are paid off, it gets the full benefi t of increased tax revenues from the TIF project.
    With such a system in place, a planned waterfront housing project at East Front Street in Schenectady’s Stockade section would probably not have died a couple of years ago for lack of financing, and might be resurrected now. And the city is eager to use it to get developers to do mixed-use developments — residential mixed with retail — in its blighted neighborhoods.
    TIF isn’t without its critics. They argue that it is sometimes used for projects that would have been done anyway; causes gentrification in poor neighborhoods as real-estate values rise; encourages the use of eminent domain; and in the case of large residential development, forces taxpayers elsewhere to subsidize the expanded costs in areas like education and public safety as the tax revenues from the project go to pay off the bonds. But these are reasons to target the program carefully and use it wisely, not reject it. .....................>>>>...............>>>>...................http://www.dailygazette.net/De.....r00901&AppName=1