TIF Tiff Taxing Tampa’s Timing

Talk about changing the rules of the game.

These are obviously frustrating, uncertain times for local officials trying to figure out budgets, priorities and protean property-tax scenarios, without the state Supreme Court messing with their tool box. In this case – Strand v. Escambia County, to be precise – the Florida Supremes have unanimously decided to fundamentally alter the way TIF – or tax increment financing – money can be spent.

It’s a very big deal.

TIF is a special taxing structure, dating to the early 1980s, which helps finance projects in designated areas (with “blight”). In principle, it’s a proactive way for government to partner and help areas help themselves by broadening their tax base and strengthening their communities. These venues (Community Redevelopment Areas) are permitted to take increases in tax revenues resulting from increased property values to re-invest back into the CRAs. A key corollary is debt that is backed by TIF dollars.

The Florida Supreme Court now says any such debt scenarios have to be approved in a referendum. And referenda votes on anything that includes the words “tax revenues” are inherently problematic. That’s particularly dicey for a city such as Tampa, which has already approved a $40-million line of TIF-backed credit to underwrite a passel of projects – from Drew Park storm water improvements and Ashley Drive changes to The Heights, Central Park Village and Curtis Hixon Park. And more.

To a person, City Hall officials feel blindsided – and TIFfed off. Big time. And the ripple effects include the bond market, which can’t be pleased with such a financial flip-flop.

“This issue came from nowhere,” says Tampa City Council member Linda Saul-Sena, who is also vice-chairwoman of the Community Redevelopment Agency. “We had been planning our strategies premised upon bonding the money. Now no one knows. The ramifications for engineers, architects, etc. are huge. Especially schools. This isn’t what Tampa needs; this isn’t what the state needs.”

For the record, Tampa has 9 CRAs, including two downtown; Florida more than 175.

As for Mayor Pam Iorio, who was poised to spend $40 million for mostly downtown improvements, it means a holding pattern for everything but Curtis Hixon Park. The city, says the mayor, will “front the money” for the park, meaning that reserve funds will likely be tapped for the $15-million project. The park, which Iorio calls an “entertainment environment,” is scheduled for a February groundbreaking. The mayor considers it a critical, synergistic linchpin for the downtown waterfront area. One that will include two museums and the Riverwalk.

“Not to sound like ‘Roseanne Rosannadanna,’ but ‘It’s always something,'” noted Iorio. “And something we’ll get through. But this would not be an increase in anyone’s taxes. It’s a way to help blighted areas. You take revenue streams and borrowing to get rid of blight. Everyone benefits. Remember, this is how (former Mayor) Bob Martinez did the convention center. Do you think we’d have a convention center today if it had gone to a referendum?”

The city’s hopes now lie with Supreme Court clarifications. Will there be any grandfathering of financial plans? Exactly who would vote in a TIF referendum? The whole city? Only the impacted CRAs? And how would Harbour Islanders vote?

“I think in most of the (CRA) areas, if we have to go to a vote, it would pass,” says Tampa City Council member John Dingfelder. “If we go citywide, that’s asking for failure.”

Leave a Reply

Your email address will not be published. Required fields are marked *