Cindi Ross Scoppe

What’s got me cheering about these downtown failures

A rendering of the proposed Kline Center
A rendering of the proposed Kline Center

NOBODY SHOULD be happy that three high-profile downtown development projects are simultaneously hitting hard times.

Clearly Columbia would benefit from the massive hotel-retail-residential Kline Center planned for the long-vacant corner of Gervais and Huger streets. The 15-story Edge student housing tower nine blocks to the northeast would bring more foot traffic to Main Street and the Vista. And then there’s BullStreet. It’s an exciting opportunity that we’d want to succeed even if city officials hadn’t sunk $37 million into a baseball stadium and promised many, many millions more for more justifiable infrastructure improvements.

In spite of all that, I’m cheering. Enthusiastically. Loudly. If you care about how tax money gets spent in the Midlands, you should join me.

It’s not that I’m opposed to developing the Vista’s most visible vacant lot, or erecting that scaled-back-but-still-massive apartment building on Assembly Street, or bringing great new shopping opportunities to BullStreet.

I’m not even necessarily opposed to the idea of the city building another parking garage to aid the Vista development. If in fact no one is going to build a hotel in the Vista without a taxpayer-funded garage, and if it is truly realistic to expect that taxes from the hotel will pay for the garage in short order, then a legitimate argument can be made for that investment. (A legitimate argument can be made against it too, but that’s getting off point.)

ScoppeSmileVERTical
Cindi Ross Scoppe

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No, I’m not cheering failures themselves, but the failure of city officials to create the special tax mechanism that was supposed to benefit — or benefit from — the projects. I’m cheering because all three projects were supposed to be tied to tax-increment financing districts — which steal money away from the rest of the city, tie the hands of future elected officials and, when they work, allow the city to spend money that rightfully belongs to the county and, much, much worse, schools. I’m cheering because we ought to celebrate anytime government is unable to create a TIF but has to instead consider a more responsible funding mechanism.

The idea behind a TIF is that by spending money on infrastructure and amenities, a government can spur private development in an area — usually an area that needs revitalization. Once a TIF district is created, all the property taxes generated by new construction are plowed back into the district, either for a set number of years or until a pre-determined amount of money is generated. The theory is that local governments and the schools benefit once the district expires and they can use the taxes from what is now a much larger tax base.

But while government spending inside a TIF district can spur economic development that generates more tax money (that’s what drove Vista development), simply creating a district does not create money. What a TIF district really does is divert money. The government could do that anyway, through the annual budget process, but this makes it automatic. This strips elected officials of the ability — and duty — to make spending decisions. It says that everything inside the TIF district will be paid for no matter what, while everything else has to fight for funding.

It’s worth celebrating any time a TIF is not created.

Creating a TIF district is the opposite of a council making responsible decisions every year about how to allocate our resources.

Which brings us back to those three shrinking and stalling development projects.

The problems at the Kline Center are most closely tied to the city’s failure to create a TIF: The hotel part of the project wasn’t ditched because the developer couldn’t attract a hotel to the site; it was ditched because the council concluded that it couldn’t convince Richland County and Richland School District 1 to give up their tax money — and their control of that money — to pay for the parking garage.

The city doesn’t have to create a TIF in order to build a parking garage.

Now, it might be difficult, and it might be uncomfortable, and it might take some creative thinking given limits on the city’s bonding capacity, but the city does not have to create a TIF in order to build a parking garage. If it wants the full Kline Center to work, hotel and all, it can allocate money for the parking garage through the annual budget. Should it? I don’t know. But it has the option to build that parking garage, using a more responsible and appropriate funding mechanism.

The problems at the other two projects are not related to city policy. Neither was asking for money from the city (or at least not any more money). Just the opposite: City officials had hoped to draw TIF districts around what they assumed would be wildly successful developments at both the Edge and BullStreet so they could siphon off the property taxes to pay for renovations to Finlay Park and for infrastructure improvements designed to lure business to north Columbia.

Fortunately, the county and the school district weren’t interested in donating money to those projects either — and frankly, any school board members who even considered donating school money to pay for renovations to a city park should be removed from office.

And City Council members ought to be relieved that those two TIF proposals fell flat: Imagine what kind of fix they’d be in if the council had made commitments to fix up the park and — more importantly — help entice development to north Columbia using money from planned developments that have now slowed down or stalled out.

Ms. Scoppe writes editorials and columns for The State. Reach her at cscoppe@thestate.com or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.

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