Press Release: Community leaders call for changes in Governor's "tax increment financing" bill - it's another subsidy for Paul Allen's plans in S.Lake Union

 

Date:

        Mon, 09 Feb 2004 13:17:22 -0800

 

Community Leaders Release Letter Calling for Changes in Governor's Tax Increment Financing Bill HB 1281 SB 5364 or it's just another subsidy for Paul Allen's Plans in South Lake Union and other big ticket projects:

 

For more information, contact 632-0668

 

37th Rep. Sharon Tomiko Santos Proposes Amendments to the Gov's Bill That Reflect Community Concerns - Five Seattle City Councilmembers give their support to Rep. Santo's bill.   Rep Santo's amendments would prevent giveaways for Big Developer schemes while ensuring use of TIF for truly needy, low income, and minority communities.  

 

        Last week, an ad hoc coalition of community leaders forwarded a letter to our State Legislatore calling from substantial changes to the Governor's Tax Increment Financing (TIF) bill SHB 1281 (And Senate Version 5364).  Signed by over 70 activists from Seattle and other parts of the region (see list of signatories below letter), the letter calls on the State Legislators to substantially amend this legislation.  As written, community leaders charge that "the bills are an open invitation for abuse by local governments.  More specifically, they are little more than a new form of subsidy for big developers that will also adversely affect small businesses, existing jobs, and local resident needs."

        Under the legislation, a city could draw boundaries of almost any size (and easily around whole communities) - then take nearly all new tax dollars generated in those areas that would have otherwise gone to the general fund, and instead use them to subsidize large redevelopment schemes within those areas. New taxes (above those collected in prior years) that otherwise would have gone into the city, county, or state's general fund to meet basic needs – both property and sales taxes – would instead be taken to pay for big ticket projects such as Paul Allen’s current multi-million dollar plans for Seattle’s South Lake Union.

        In effect, community leaders say these TIF bills "allow tax subsidies to pay for infrastructure in areas where growth already is occurring and where developers already are benefiting from that growth" and as such, "these bills merely relieve developers of the responsibility of sharing in the costs of providing infrastructure within these areas, shifting the entire burden onto the shoulders of local residents and small businesses." Given the enormous costs associated with his plans, the Mayor of Seattle has been quietly working to get TIF approved as a way of relieving Paul Allen of any responsibility for sharing in those costs.  TIF also could be used state-wide to promote Wal-Marts, other Big Box and strip mall developments at the expense of existing small businesses, existing local business districts and the jobs they provide.  Citizens also charge that the Governor's bill allows tax subsidies for big development that will cause direct displacement of low income housing and does not require developers benefiting from these subsidies to provide even one dime of mitigation - either replacement low income housing or assistance to displaced small businesses.

        Eric Pettigrew from the 37th District is a prime sponsor of the Governors bill.   Sharon Tomiko Santos, also of the 37th District and Majority Whip in the House is attempting to secure amendments to the bill supported broadly by the community.  Five Seattle City Councilmembers have also given their written support to the Santo's Bill. .

        The Displacement Coalition is calling on legislators to support Rep. Santo's changes or the bill must be killed.  Santo's changes include:

1. Add a definition for low income housing and add it to the list of public improvements allowed under the bill.  

2. Include specific criteria to define blight so that use of TIF is restricted exclusively to these areas, and require feasibility studies that analyze potential TIF districts in relation to those criteria and that estimate displacement effects on small businesses, existing jobs, and low income housing

3. When there is displacement of small businesses and low income housing, require cities to guarantee no net loss of low income units at comparable price, provide direct relocation assistance to small businesses and tenants threatened with displacement, and give cities the discretion to use TIF but for low income housing and truly needy communities only

4. Limit the boundaries of urban TIF districts to a set number of contiguous blocks or a set number of acres and within throwing distance of the TIF funded improvements themselves.  Spell out specific penalties for local jurisdictions that abuse use of TIF, and require public hearings, environmental review, and an affirmative right of appeal for citizens and small businesses first to the State Auditor and then to the courts.

 

The State Labor Council has raised several additional matters about the Governor's bill and the Coalition supports any changes that can be made to accommodate their concerns as well.  The Displacement Coalition is calling on citizens to call their legislators and urge them to support Rep's Santos amendments and give support to labors concerns so we can turn a lemon into something that really could do something valuable for our community. Or as they say, the bill should be shelved. Below is the actual copy of the letter most of the signatories attached. For more information, contact 632-0668

 

Text Begins Below:  (Displacement Coalition is responsible for all of the text above - only the letter below is co-written and co-signed by the signatories)

 

 

Open Letter from Community Leaders to Our Legislators

(4554 12th NE, Seattle Washington, 98105 contact:  206-632-0668)

 

 

Re: SHB 1281 (And Senate Version 5364) Tax Increment or Community Redevelopment Financing Bill

 

            Please amend the current “Tax Increment” or “Community Redevelopment” Financing Bills.  Without critical changes, SHB 1281 and SB5364 must not be approved.  Unless changes are made please vote “No”

 

            As community leaders from the City of Seattle and surrounding area, we are writing to strongly urge you to amend the current versions of SHB 1281 and the Senate version SB 5364 that would authorize use of “tax increment” or “community redevelopment” financing across Washington State.  With passage of these measures as written, the bills are an open invitation for abuse by local governments.  More specifically, they are little more than a new form of subsidy for big developers that will also adversely affect small businesses, existing jobs, and local resident needs.   

            Under this TIF legislation, a city could draw boundaries of almost any size (and easily around whole communities) - then take nearly all new tax dollars generated in those areas that would have gone to the general fund, and instead use them to subsidize large redevelopment schemes within those areas. New taxes (above those collected in prior years) that otherwise would have gone into the city’s general fund to meet basic needs – both property and sales taxes - would instead be taken to pay for big ticket projects such as Paul Allen’s current multi-million dollar plans for Seattle’s South Lake Union. 

            Over time as more of a jurisdiction’s lands are roped off and turned into a TIF districts, more and more of that locality’s future tax revenues are drained away including revenues that are needed by the other overlapping tax jurisdictions.  In state after state where there are few restrictions on where TIF can be used or how large a TIF area can be (as is the case with these bills), TIF districts proliferate draining away in some cases as much as 15-20 percent of municipal budgets.  After these tax dollars are diverted, cities are forced to raise additional taxes to cover budget deficits or cut back on police, fire, housing, and human service programs.  And there is less money available for economic and job development in truly needy areas.

            The claim is made that TIF will stimulate new growth that otherwise would not occur, and thus lead to added tax revenues and jobs.  But these bills, as written, do not contain adequate limitations restricting use of TIF only to “brown”, blighted, or deteriorated areas not already experiencing growth.  As such, TIF will more often occur in areas where high levels of growth are already anticipated or occurring.  That’s because these are areas where there is confidence that enough new tax revenues will be generated in future years to pay off the bonds that were floated for the TIF improvements. Wealthy cities like Seattle will grab the program for folks like Paul Allen but it will be too risky to use in low growth or truly blighted areas. 

            Given that these bills allow tax subsidies for infrastructure in areas where growth already is occurring and where developers already are benefiting from that growth, these bills merely relieve developers of the responsibility of sharing in the costs of providing infrastructure within these areas, shifting the entire burden onto the shoulders of local residents and small businesses.  Where the Growth Management Act says developers should at least share some of the costs, these TIF bills relieve them of any and all responsibility. 

            These bills as written also do not include adequate language to prevent localities from promoting big box retail activity, such as Wal-Marts and strip malls, and other planned commercial development when that development directly competes, takes business away, causes the loss of jobs, and forces closure of longtime shops and stores within existing local communities.  Unlike other states that set up strict criteria to ensure that TIF does not displace existing businesses, these bills offer a handout to any area of the city and to any big developer strong enough and rich enough to sway local government to foot the bill regardless of its impact on our communities.  Contrary to what the Governor’s office may be telling you, the language they have added to their bills to address this issue is wholly inadequate and an invitation for abuse. 

            When cities subsidize brand new development and use TIF in areas where growth already is occurring – that brand new development invariably causes displacement not only of small businesses but also the loss of low income housing.  Paul Allen’s plans in South Lake Union threaten hundreds of existing small businesses and will cause the loss of dozens of low income housing units.  The Governor’s bill provides no mitigation for these impacts and TIF funds are not even available for such a purpose. 

            In conclusion, we urge you to make the following amendments to these bills. Without such changes, these bills should not be approved:  

 

            Thank you very much for you consideration.  Please make these changes to the bill or please vote no on the measure.

 

            Sincerely,

(Signatories below have signed as individuals. In the interest of time, they’ve given us permission to type in their names. Unless otherwise stated any affiliations listed are for identification purposes and do not necessarily reflect positions of those groups)

 

Jan Brucker

46th District and Northgate Activist

 

John V. Fox

Seattle Displacement Coalition

 

Patricia Stambor

Magnolia Resident

2540 37th W 98199

Carolee Colter

Southeast Seattle Resident

 

Dean Paton

 

Sinan Demirel

Seattle Displacement Coalition

 

Goef Logan

 

Craig Salins

 

Gary Clark

Capitol Hill Resident

 

Chris Leman

Eastlake Resident

 

Carla Bueno

 

Ishbel Dickens

 

Sue Koeller

4714 Ballard Ave. NW 98107

 

April Thanos

 

Mike Maloney

Green Party of Seattle

 

Janine Blaeloch

 

Paul Richmond, Esq.

600 First Ave, #618

 

Todd Kephart

 

Brady McGarry

Students for Fair Trade

 

Leslie S. Myers

 

Katy Carter

 

Matt Fox

University District Resident

 

The Rev. David C. Bloom

Interfaith Task Force on Homelessness

 

Bill Grace

 

Alice Woldt

 

Rev. Bill Kirlin-Hackett

Redmond, Interfaith Task Force on Homelessness

 

Alvin M. Sion Ph. D.

 

Kent Kammerer

 

Lorraine Pozzi

 

Maureen Bo

Puget Sound Alliance for Retired Americans

OPEIU Local 8 Member

 

John McLaren

Olympia Resident

 

Mike Smith

Pike Market Neighborhood

 

Bette Reed

 

Joe Martin

Central Area Resident

 

Paul Loeb

 

Jean Kim

Presbyterian Clergy

Homeless Advocate

 

Marvin Eckfeldt

Retired Minister The Christian Church

(Disciples of Christ), Kent Wa.

 

Phil Bereano

37th District

 

Sally Kinney

 

Dan Merkle

 

Pablo Stanfield

 

Flo Beauman

 

Rick Barrett

 

Irene Wall

Phinney Ridge Community Council

207 N. 60th St   98103

 

Rick Hangartner

Lower Queen Anne Resident

 

 

Susan Tillitt

Lower Queen Anne Resident

 

Trevor Griffey

 

Richard Elliason

Save Seattle Trees

4419 Latona NE  98105

 

John Barber

 

Ryan Vancil, Esq.

Bricklin, Newman, Dold LLP

 

Colleen Dooley

Cascade

 

A. Malaika Lafferty

Cascade

 

Vishaka Smith

 

Tim Baker

 

Christal Wood ED

Gotham Communications

 

Dorothea H. Wilford

 

David Gordon

 

Susan Fowles

 

Dick Burton

Co-Chair for Political Action

 

Seattle Community Colleges Federation

            Of Teachers AFT Local 1789

 

John V. Fox     Page 4  2/10/2004Thalia Syracopoulos

Queen Anne Resident

 

Joe Read

10th District Whidbey Island

 

Curt Firestone

Community Activist

Former City Council Candidate

 

Dorothy Gordon

909 N. 35th 98103

 

Ben Wocjik

Belltown Resident

 

Kris Weber

 

Cheryl Jones

Cascade Resident

 

Carla Miller

 

Mary Klein

Queen Anne Resident

 

Dave Ihnen


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