Agenda - 05-18-2010 - 8b - Laserfiche WebLink

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Levengood 3 locally to pay off the bonds and fund continual improvements exclusively within the TIF (Blocher 3). Though intended for use in blighted areas, TIF may be used in a variety of settings. According to North Carolina legislation, cities and counties may establish TIF districts in areas that are "blighted, deteriorated, deteriorating, undeveloped, or inappropriately developed from the standpoint of sound community development and growth" or which are otherwise "appropriate for rehabilitation and conservation activities" or "for the economic development of the community" (Blocher 6). In these areas, local governments may use TIF for a variety of uses, which likewise are governed by state legislation. In North Carolina, these uses include physical infrastructure, like water and sewer, streets and sidewalks, and parking facilities, but also civic, cultural, and entertainment facilities; hospitals; low- income housing; historic preservation; and industrial development (Blocher 5). Given the risks borne by local governments when adopting TIF, financial viability is an essential consideration. Furthermore, understanding how that viability translates into economic development is critical. Qualitatively, many TIFs do succeed in attracting investment, combating blight, and paying off initial costs; news of this perceived success has stimulated TIF use across the nation. In spite of this positive attention, TIFs have also garnered criticism. One major critique is that TIFs do not create net economic gain, but simply attract or re- orient growth away from other parts of a city. Other critics argue that TIF evaluation is unable to account for the problem of "but for " — whether or not that development would have occurred "but for" the TIF. Additional concerns include the strain successful TIFs may place on existing public resources like schools and parks; and the effect of rising property values on existing low - income residents (Blocher 9). Existing literature has attempted to draw out these criticisms while measuring the impact of TIFs on their surrounding communities. The earliest empirical analyses of TIF compared localities employing TIF to matched pairs without the financing mechanism. In one of the first studies in 1990, Anderson compared municipalities in Michigan and determined that TIF had a positive relationship with aggregate property values. Man and Rosentraub later found a similar relationship in Indiana, regarding residential property values specifically. While most of these analyses showed a positive association, Dye and Merriman observed a slightly negative relationship among municipalities in metro Chicago. Their explanation, which addresses a major critique, is that the TIFs had channeled investment to less productive parts of cities, causing an overall aggregate decrease in value (Dye and Merriman 309). Because TIFs usually encompass only a small percentage of a city's total jurisdiction, aggregate analysis is problematic. More recent literature has attempted to measure the impact of TIFs on a sub - municipal, disaggregate level. The results have been on