In the case of the new White Rock Addition, maybe that’s not a bad thing
Spread the good news, the old Walmart building is dead! You might even say a house fell on it.
Make that 17 houses, in the $600,000 to $700,000 price range. Good riddance to the old eyesore, and a cautious hello to our new upscale neighborhood.
Three builders (Highland Classic Homes, Nobility Homes, and New Leaf Construction) are investing in the new White Rock Addition south of Walnut Hill and west of Audelia, a 3.5-acre piece of land that is included in the Skillman Corridor TIF.
The “T” in TIF stands for tax — a word that can cause distress, especially if it seems private developers might get rewarded with public dollars. “I” is for incremental, and “F” is for finance — now do you get it? No? Don’t feel bad — it’s similar to working with imaginary numbers in algebra. You know it’s a useful concept, but it’s hard to explain why.
Before thinking any longer about the numbers, take a look at the TIF map for all of Dallas (see dallas.ecodev.org). It shows where the city hopes to encourage development and redevelopment with the enticement of TIF dollars.
Our own Skillman Corridor TIF is one of the biggest on the map, stretching along Skillman from Northwest Hwy to LBJ. One surprise is the inclusion of the northwest intersection at Abrams and Forest, where the Walmart supercenter opened in 2008. But a quick perusal into recent history reveals that when Walmart built that store, the city didn’t approve TIF reimbursement for them. Nor is the TIF reimbursing any part of the redevelopment at the northwest corner of Skillman-Walnut Hill (Picasso’s, Mi Cocina). Only two projects in LH are moving forward directly because of TIF incentives: the White Rock Addition, and the Town Center.
I asked Sue Hounsel in the City of Dallas department of economic development how a TIF is paid for. Is it in the city budget, taking money away from our libraries and other city services?
“It isn’t part of general fund dollars,” Hounsel says. “The budget is hypothetical, based on us collecting future revenue.”
Hypothetical?
“The TIF is set up to create new value. When the future revenues come in, a portion of the new value, 85 percent, goes to paying back the investor. The rest goes to the general fund.”
If Hounsel was a professor of advanced algebra, I wouldn’t expect to understand everything she says the first time, but this is what I think she means: Unless the city finds a way to create a financial incentive, it’s hard to entice a developer to invest in our problem areas. Distressed properties are a drag on our neighborhoods and they don’t generate tax dollars. If a developer steps forward to improve the property, it can be win-win for everyone.
But wait — what do the taxpayers get?
If all goes well, we get 15 percent of new revenues. Does that sound small? Not if you remember that without the new development, there wouldn’t be anything to divide. All new funds are good funds.
What about the free market? Wouldn’t it be better to let supply and demand determine what developers do?
I would argue that you can lead a developer to a TIF, but he still is responsible for his project’s success. Unless the project increases the property’s tax value and generates additional tax revenues, he won’t get the hoped-for reimbursement.
Will anyone really pay over $600,000 for a house near Walnut Hill and Audelia? Word is, some people already have. Time will tell how well the new homes sell.
On the other hand, wasn’t it the free market that got us where we are today? Too many vacant strip malls attract too many dollar stores, fast food restaurants and convenience stores. A concentration of such businesses often means more crime. I don’t mind a tweak to the system that brought us some of our current trouble.
Bottom line, does a TIF cost us taxpayers more money than we already pay?
Well — not today. If it works the way it’s supposed to, not ever, unless you count the sales tax you will pay when you spend money at the hypothetical Town Center.
Meanwhile, enjoy the real-time demise of the old Walmart building. Ding, dong. That Walmart’s gone!
