Midtown Organization, ED Plan, TIF District

                 What is "Midtown" anyway?
 
  • Midtown is a new multi-neighborhood association created by the City for the purpose of, among other things, administering the TIF district along, and near College Avenue.
 
  • Midtown serves as another in the multitude of quasi-public organizations currently planning the future development for the neighborhoods along College Avenue. It serves as another layer between residents, the Neighborhood Association and the City and creates and publishes its own economic development, and land use recommendations independent of the Neighborhood Association, but consistent with Metropolitan Development Goals. Neighborhood Associations are, somewhat, expected to support its decisions, but Midtown has no obligation to suppor the neighborhood land use decisions.
 
  • The TIF district will provide bonding capabilities and direct monetary support to developments which serve its goals and purposes - no exact criteria have yet been identified regarding what those criteria are.
 
  • Midtown supports those high density housing goals along College Avenue as they will raise the highest increment of new taxes - important to sustaining the TIF. While appropriate at certain locations, high-density is not necessarily a singular shared value among current residents.
 
  • Midtown has its own committes, and council independent of City and Neighborhood Associations, further empowering them as a "voice" for the community despite their status as quasi-governmental and without any accountability to the electorate. We argue that there is no citizen/voter mandate for their re-design of the neighborhood.
 
  • TIF increment monies are intended to be used for re-development purposes specifically in the pre-defined TIF area. Therefore, TIF money is not available for police, fire, streets or any other general funding needed by the city.
 
  • Organizations of this nature need to have checks and balances to avoid a corruption of the common interest in high-density, tax producing, developer-profit producing projects. Projects for which the tax-payers and local residents take the risk.
 
 
 
BACKGROUND
Midtown  Indy is an economic development planning district comprised of many neighborhoods on the north side of indianapolis in Center and Washington Township. Among many other activities, they are the economic development advocacy group for the newly described district in central Marion County and manage the tax increment financing district (TIF) within its borders.
 
Midtown Indy effectively places another layer of bureaucracy between neighborhoods and the City of Indianapolis, and provides wide development incentive capabilities with little accountability to the public it suggests that it supports. Plans are created, supported and implemented by a relatively small number of insiders. Both political parties currently favor its plans and structure and, as a result, the organization lacks any natural checks and balances save the committees formed to make neighborhood decisions. Clear criteria for public/private partnership need to be defined so that all residents can have a transparent understanding of the intent of the funding, developer commitments and the desired outcomes. Ultimately to be compared to actual outcomes.
 
Recently Midtown received authorization to remove nearly 900 single-family residential parcels from its TIF district  so that they do not count against the incremental tax revenues generated in the district. This move has essentially removed the risk to the TIF of any unexpected "down-side" in residential property tax assessments from their development decisions.
 
 
Commentary: There is a growing "movement" in government to utilize privately funded non-profit, non-governmental organizations to carry out "street level bureaucracy" that by-passes direct voter accountability, but has wide ranging powers to leverage funds, develop and implement future plans and substantially avoid detailed public scrutiny. High level plans are placed into "public comment" through these entities regarding tactical rather than strategic issues. Hence the questions asked are more along the line of: "What type of public art would you like at your transit station?", rather than: "Do you want or need a new transit line?".
 
Irrespective of whether an individual favors such plans/transformations or not, the public is placed in a position of ignorance regarding the full intent and impact of the plans they are being asked to comment on, because full plans are neither final nor generally fully vetted.
 
California has dealt with far-reaching TIF and redevelopment authority for quite a long time. Although some of their lessons are different than what we face here in Indiana, there is still a lot to gain from studying their experience. Below is a link to a document describing their concerns with the use of TIF as a public financing too. This is not to state that TIF should not be used, but rather to balance the view that TIF's have no down-side. Development is a risky venture and all developments carry risk.
 
The question we ask here is: Who is carrying the risk for these new plans proposed for College Avenue? Is it the developer, the City or the tax-payer? Our research to date would suggest the latter. 
 
 

EXAMPLE
For example, imagine that a developer builds a multi-family housing development on an old parking lot with a construction price tag of $12 million and a cost of $3 million for the land. In a simple example, one would expect market value (and with it assessed value on which taxes are paid) will go up by $12 million. However, due to extra traffic, disruption of current traffic flows, the visual impact of living next to a 55 ft. development, construction and other changes, neighboring single-family houses lose $50,000 each in market value.

In the manner in which the TIF is currently set up, the TIF bears all of the gain for the commercial development and takes none of the down-side of $2,500,000 of residential single-family housing market decline. Proponents generally assert that these developments will benefit all property values. And while, it may not impact homes on the broad scale as described in the example, some parcels will likely be impacted. We hope to see the land use plan incorporate certain protections against over-development that can minimize or eliminate the down-side effects of development activity.