posted by Mike Madison at 7:02 PM /
From the agenda for tomorrow (Monday 2/12) night's Mt. Lebanon School Board meeting:
TIF Status – A meeting of the TIF Committee was held on February 5, 2007. Details of what will become a final TIF plan for Board consideration are being drafted. A presentation of that plan is expected at the March 12 Board discussion meeting with Board and public comment solicited after the presentation. Action will be requested at the March 19 Board meeting on the District’s participation in the plan. Once the final plan is complete, it will be sent to all Board members for review.
TIF Status – A meeting of the TIF Committee was held on February 5, 2007. Details of what will become a final TIF plan for Board consideration are being drafted. A presentation of that plan is expected at the March 12 Board discussion meeting with Board and public comment solicited after the presentation. Action will be requested at the March 19 Board meeting on the District’s participation in the plan. Once the final plan is complete, it will be sent to all Board members for review.
36 Comments:
What is a TIF plan?
To TIF or not to TIF, that is the question.
Whether 'tis nobler in the community to suffer
The slings and arrows of property tax opportunity loss,
Or to provide shelter against a sea of municipality created vacancy,
And by opposing end them? To die: to sleep;
Anyway, I butchered Shakespeare, so to quote the immortal words of Nancy Reagan, "Just say no."
Anonymous Mom of 3
I would like to remodel my bathroom, how can I get a TIF for that?
With or without remodeling your taxes will go up, so go for the new bathroom - but without a TIF.
Later today I will visit Planet Art for a Valentine’s Day gift – don’t tell Peg. Mike likes Asti’s Pharmacy, I frequent Lebanon Shops Pharmacy.
This is how we support our local business owners – they have stuff we need/want and we buy.
No doubt - it costs money to make money. In a recent Commercial Districts newsletter recently, the Municipality highlighted the investments several businesses have made in their properties.
On Washington Road:
$300,000 at Bistro 19
$200,000 at Mec
On Castle Shannon Boulevard:
$300,000 at Schafer Interiors
$100,000 at La te Da
$400,000 to come at Luma South
On Beverly Road:
Iovino’s Café
All these endeavors have invested their own money to attract our business, all without public assistance. It would make Adam Smith proud.
Shop local! As far as the TIF goes, I am with Mom of 3 – Just Say No.
Good point, Bill. I'm cheap and a bargain shopper, but I make an effort to shop local if I can. Rolliers or Ace Paints/Beverly over Home Depot. Textile Studio over Joann Fabrics. The Framesmith...you get the idea.
Anonymous mom of 3
Bill,I always appreciate how well prepared you are in presenting your arguments against the TIF (i.e.last night's school board meeting). If there is anyone out there who supports the TIF, I would be interested in reading what the benefits are from a factual dollars and cents standpoint. Although emotions seem to be running high on this issue, it would be helpful to learn, "Just the facts"....anyone? Also, Bill, when are you going to announce your candidacy? ;-)
Let's all get together. you remodel your bathroom, others will buy windows, doors, and cement driveways to replace asphalt. Collectively we will ask the municipality and school board for a TIF and force our neighbors to share in the cost
Anonynous Mom of 3
Here are some TIF numbers for you altough some may have changed by now:
$400,000 in fees will be paid to the Redevopment Authority of Allegheny County to manage the TIF over 20 years.
The original TIF bond issue was for $6,425,000 but the TIF was only $4,800,000. A large part of the $1,625,000 difference was extra money borrowed to pay the first two years interest on the bond issue. In other words we borrowed the interest for the first two years of the bonds and will pay interest to borrow that interest.
A third part of the TIF is to pay the parking authority for 18 parking spaces at a total cost of $1,710,000. These spaces are for resale by the parking authority to the developer for resale to the condo owners who will pay an average of $439,283 for their unit. So the school board is transfering $1,710,000 from it's balance sheet to the parking authority balance sheet and the spaces end up being owned by the condo owners courtesy of our school board.
The $95,000 parking spaces are for sale for $15,000 each to the condo owners for a total of $270,000. The $270,000 is retained by the parking authority so the schools are out the $1,710,000 paid for those spaces. These expenses total $3,735,000 and do not include the last 18 years interest on the TIF bonds.
The last estimate of only real estate taxes from the project retained by our schools for the education of 5400 children was $119,805 in real estate taxes on a building assumed to be assessed at $20,207,021 (46 units at $439,283).
Last night the school board discussed a preliminary budget for 2007-2008 that would raise property taxes by 1 mill to 24.56 mills. A building with an assessed value of $20,207,021 at 24.56 mills should produce annual real estate taxes of $496,284. So $376,479 in annual real estate taxes is lost for the education of your three children.
Yes, genius, but if it's not built isn't that 500K that isn't GAINED towards the benefit of this poor "Anonymous Mom of 3's" children? You people amaze me. You'd rather look at a vacant lot than accept that the world isn't always fair and that deals are done this way. But I suppose none of you visit PNC Park or Heinz Field, either. Right?
I wasn't an Allegheny County resident at the time, but my understanding is that Heinz Field and PNC Park were built with public subsidies despite public opposition to both tax increases that would have paid for the parks, and diversion of existing tax revenues to do so.
Exactly. I'm not sure of your point but my point is that they were built. And we, as a region, have gained by their existence. Again, in a perfect world of course wealthy owners and investors should front the cost of their facilities. But it's not done that way anymore. I don't hear anyone crying "foul" over the incentive package our local and state govt. has put together to woo USAirways into consolidating their call center here at the cost of taxpayer revenue. Do you? The town of Mt. Lebanon will benefit by having these condos built. It is as simple as that. Otherwise we can all simply enjoy the vacant lots along with the beautiful Dyke Auto Parts across the street.
My point was that people were opposed then, got shafted by their elected representatives, and are opposed now.
I can't see how "the region" has benefited from the existence of the stadiums. A handful of very wealthy men have benefited. A very tiny number of low income men work at the stadiums but likely would have low income jobs elsewhere in the region. The rest of us enjoy having the teams around -- but the Steelers certainly weren't going anywhere, and a lot of people would have said (and still might say) good riddance to the Pirates. And yes, I'd be happy to carry Mario's luggage if he decides to take the Penguins to Kansas City.
Maybe I'm just not cynical enough yet -- though having worked both with and against real estate developers as a laywer, I know what cynicism is -- but as a taxpayer I dislike the presumption that my obligation is to bend over and say, "thank you sir, may I have another?" And that's what this TIF proposal asks.
Would I object to public subsidies for USAirways? Yes, actually, I do, and I did, though the case for those subsidies for large employers is a lot stronger (consider the number of jobs involved) than the case for a TIF for a real estate developer who already has a profitable building. The public is starting to wise up as local governments give away the store. There's interesting news out of Lenoir, North Carolina this week as the public learns the scope of the tax giveaway associated with bringing a new data center to the state.
The problems here are partly principle, since we have a thriving market for capital that seems work pretty efficiently when it comes to high end businesses. And the problems are partly pure economics. When it comes to subsidies for USAirways, or Google, or Chrysler (remember than one?), putting public money into a private company is usually a bad investment. The TIF proposal asks the township to invest hundreds of thousands of dollars in a private real estate deal, and all of the back end returns go to -- the developer! (So, if the town took an option on the first 25% of the proceeds of an eventual sale of the development, I might reconsider my opposition.)
I have yet to hear an argument that persuades me that a large cluster of half-million dollar condominiums -- many of which, I predict, would either go unsold or would be heavily discounted -- would benefit Mt. Lebanon. All I hear from the project's supporters are conclusions, as if the merits of the tax subsidy are self-evident once anyone sees pretty pictures of the proposed buildings.
It is true that I am neither a Pittsburgh nor a Mt. Lebanon native, so I don't know how things have been done around here. Frankly, I don't see how any of that matters. The Commission and the School Board have a duty to do their best to maximize the value of that parcel. Bill Matthews has been tireless in demonstrating that so far, the relevant public authorities have failed to do so.
As far as I'm concerned the real eatate market is not supporting building material cost increases and nine foot ceilings.
I'm tired of winers who think they have an entitlement to other peoples money.
Like the penguins the developer has overstayed his welcome.
If his condo owners want parking spaces let them walk to rolliers and let the school board keep the $1,710,000 they are diverting from education of children.
A point that everyone seems to miss, concerning the request for a TIF, is that there was another developer that made a proposal to build on this lot and did NOT ask for a TIF. When Commissioner Humphrey's, the Mt. Lebanon Commissioner was asked why the city did not consider this proposal, he said, "we did not believe them". Huh?
I'm a life long resident of Mt. Lebanon. First, Dyke Auto Parts has been a tax-paying part of the Lebo landscape for a long time. You don't need to love the aesthetics of the building to appreciate they've managed to run a successful, tax paying business for decades.
Second, I'm most offended by the fact that the municipality has acted as a vigilante gatekeeper on this property - carefully screening or ignoring any and all development interests. Who knows what could or might be developed on this property? The Allegheny Institute wrote an interesting little article on this topic:
Allegheny Institute Blog
Third, I suspect Mike's hypothetical profile of the potential buyer is correct - wealthy retirees with tax sheltered income (let's collect 1.3% of their reported $45,000). I also predict that the units will not sell at the projected $500k and wind up being discounted.
Point is, the projections we're shown are questionable and development options for the property have not been fully explored.
Anonymous Mom of 3
Let's let the developer carry Mario's bags to the airport; let them both fly away.
Q. Why is the lot vacant anyway?
A. Mt. Lebanon wants control its development.
Q. Why has it taken so long?
A. Mt. Lebanon wants to control its development.
Q. Why are they insisting on a TIF?
A. Mt. Lebanon wants to control its development.
Q. Why does Mt. Lebanon want to control its development?
A. Because Mt. Lebanonites will be better for it.
Q. ?
To Anonymous from 2/13/2007 at 8:54 PM:
Wow.
First of all, way to win over the crowds with courteousness and wit. You amaze "us people."
Second, it's a bit disingenous to assume that the alternative is "an empty field" that "we'd rather look at", isn't it? I don't hear anyone on this site protesting development of the property altogether. In fact, I agree with the later anonymous poster - I'd like to know what became of the TIF-less alternative.
And, come on, "deals are done this way?" Us bumpkin taxpayers just get to foot the excesses of greedy real estate developers, wah wah wah? C'est la vie! Are you serious?
Please let me know what you and I stand to gain, specifically, from the construction of this particular plan, and how that benefit is solely contingent upon a TIF.
The TIF, as noted above, may be just a means of control by the Municipality.
“Taking the King’s gold, generally ensures doing the King’s bidding.”
For example: How else could we get a developer to build 18 MTL Parking Authority parking spaces, which have NO economic justification on their own?
And what about the $520,000 the Parking Authority is pocketing in the transaction?
It appears to be part of the "take" in this game of Three Card Monte.
Mike, I don't know why you said.
"The Commission and the School Board have a duty to do their best to maximize the value of that parcel."
6/10 of an acre sold for $350,000 and is now being purchased for $500,000. An assessment of that size is far greater than the $150,200 median assessment of homes in Mt. Lebabon. Thereare homes on Hoodridge Dr. that don't sell for that much. Would anybody propose putting this building on Hoodridge to maximize the value of those properties?
Furthermore, do we want our school board in the real estate business?
According to paper filed in the prothonotary's office the employees of our district haven't trusted central office for a long time. What happens to education if the board doesn't deal with that issue?
I think that whether or not another company would have built here without a TIF,it doesn't matter. In the past 50 years they didn't.
I think this TIF could be an opportunity for Mt Lebanon to attract more high clientel (aka more $$$), and will be a beautiful building right in uptown Mt. Lebanon (and a new turning lane!). I could see other buildings refacing, and new buildings popping up.
All around this country, towns like Mt. Lebanon are thriving. (old neighborhoods close to town with a great school system) People in these other towns are tearing down the old, building new and better. You may not like that, but this always results in more money for the schools, and isn't that what we want?
Looking through Mt. Lebanon, it looks like all of this stopped in the 70's, early 80's.
With home prices through the roof in the South, people will be coming back, and coming back with lot's of money that they made when their house doubled in 4 years. We need to be ready for them, and ready to show that even though all the land is basically sold, that Mt. Lebanon is still the place to build, whether it is tearing down the old, building a new condo, or building on to a house.
A turning lane on Bower Hill costs $75K. We've needed that for 30 years. If we don't have enough moeny to do it, we need growth. And this could be a good start to that growth.
Anon 2/14 11:30 [I wish anonymous commenters would at least give themselves pseudonyms -- thanks Anon Mom of 3 for that!],
If there's a logic in your comment, I missed it entirely. Please explain what Hoodridge Drive, or any other residential street, has to do with the Zamagias TIF. My point was that the Commission and the Board are being asked to sell short the tax benefit associated with the Washington Road property. They shouldn't; they should maximize that benefit. And explain the reference to the prothonotary.
This property has been underperforming by design. The Municipality effectively directed the Parking Authority to assemble the parcels several years ago, in order that a grand “gateway” development could be realized. No problem!
It is this government initiative that has kept the propertry from being adequately developed by private interests.
Further, for many years the land was the home to Medical Rescue Team South, a temporary library and a parking facility for lease. Until the Rescue Team moved to its new home there was no meaningful discussion about developing the site.
Anon 2/14 7:53:
I'm not sure I agree with "didn't." While it's obviously true that no developer has yet developed the land, that doesn't mean there haven't been attempts. I'd use "couldn't."
As I understand it, the municipality (or the parking authority, specifically) has held the parcel and has been waiting for the "right" development.
To me, then, there are a couple key questions:
1)Is this the "right" development?
2)Can it be done without a TIF?
3)If not, why?
What does it bring that makes it "right?" The parking spaces, the turning lane, the first floor retail... etc. All good points. Does the community benefit the most from high-priced luxury condos? That's another question.
For the sake of argument though, let's say it does. Then we come to questions 2 & 3: if it's great, and we can do it without a TIF, why wouldn't we?
Zamagias has shown, in their own numbers, that they stand to make a substantial profit without a TIF. Of course, if we offer them one, they have no reason not to take it. But we have no reason to offer them one, so far as I can tell.
If revoking the TIF option makes them pull out, so be it. We've heard from other developers who didn't require a TIF. And if the project plan is sound and profitable without a TIF, I see no reason why another developer couldn't be found to take over.
Now, I personally disagree with premise 1 - I don't think the condos will be sold at the expected price, and I don't think it's the best plan for the community. The only growth I would see the project bringing is growth in the number of developers expecting taxpayer handouts to build here. Do we really want that?
Matt, Mike and those anonymous posters who argue against the TIF -I truely hope that you are communicating your thoughts to the school board. Conversations I have had with others lead me to believe that at least 5 of the 9 board members are leaning toward the "something is better than nothing" way of thinking (thinking??) and that as it now stands I feel there is a better than 50/50 chance that they intend to approve the TIF. Please let them know you don't want this to happen.
Has anyone noticed that mt lebanon is better off than 95% of allegheny county? Tif and redevelopment maybe needed in other parts of the tri state area. But in mt lebanon we should be able to attract developers and new residents. If the project is not financially viable it should not be built. Something that can make it by itself and contribute to the community is what is needed. Mt lebanon is a good community and a nice place to live. Has anyone on the township staff ever worked in industry that they know how to make money not just spend it?
A lifelong resident.
There seams to be enthusiasm around the Bower Hill turning lane. So we should build it. $75,000 should be easy to find, or include it the next time they sell bonds. BUT DONT PAY $4,000,000 TO A DEVELOPER TO GET A TURNING LANE.
But if you do and because the school taxes are 4X the township taxes does that mean the tif will have the schools paying $60,000 and the township $15,000 for this lane? I would rather have a new playground at Hoover than a turning lane, if we don't need the money for the schools.
There seams to be enthusiasm around the Bower Hill turning lane. So we should build it. $75,000 should be easy to find, or include it the next time they sell bonds. BUT DONT PAY $4,000,000 TO A DEVELOPER TO GET A TURNING LANE.
But if you do and because the school taxes are 4X the township taxes does that mean the tif will have the schools paying $60,000 and the township $15,000 for this lane? I would rather have a new playground at Hoover than a turning lane, if we don't need the money for the schools.
Anonymous said "Has anyone noticed that mt lebanon is better off than 95% of allegheny county?"
There is always need for improvement. We all live here for a reason. I expect Mt. Lebanon to continue to grow and in 20 years still be one of the best places in Pittsburgh to live, if not the best.
Growth can be condos, home additions, tearing down homes. We need to add to our tax base somehow because it seems that there is no room to cut anything in the school district and municipality.
Joe -
We will send a letter or email. The spouse has been out of town and we like to draft/send these things out together.
Anonymous Mom of 3
Oh, I should mention my spouse is named Anonymous Dad of 3. ;-)
AMO3
Development (growth) is good I agree. 'never said the site should not be developed - only that the Municipality has never made the case for the TIF. The Municipality NEVER did any quantitative analysis on the competing projects. Additionally, the Municipality summarily dismissed the second developer's assertion that a TIF was not necessary (I was at the meeting when the question was asked). As far as revenue to the schools and municipality, the competing project, without a TIF, bettered Zamagias Properties by more than $3,000,000 on a present value basis. The only analysis the Municipality did and reported in the Magazine (and on the website) showed Zamagias Properties was better than two alternatives which never got to the formal presentation stage (a hotel and apartments). Further, the Zamagias Properties own feasibility analyses indicate the project could earn a competitive return without the TIF. Nevertheless, Zamagias Properties considered the contribution of OPM (Other People's Money) via TIF “mandatory” AND the Municipality is championing their cause.
Bill Matthews brings up a good point - $520,000 to the parking authority. This is the same parking authority that did not earn enough money to pay the debt service on their bonds last year. Perhaps if the parking authority member who put a great deal of effort into his employer's interst had put that energy into his parking authority responsibility that would not have happened.
Mount Lebanon owns the land, that explains why it has not been developed. It could be a tough site - but no rougher then the rest of Pittsburgh? We do not have alot of table top flat land.
And is it any more difficult than the lots developed on James Place? Seems there was much earth moving required there and the developer had to build houses, install a road, sewers, utilities and sidewalks. I do not remember any public subsidy for that project. This project on Washington Road has all that infrastructure at its door step. What is the going on?
When asked tonight at the board meeting Mrs. Posti indicated that, as part of the regular board meeting on March 12 there would be time for public comments about the proposed TIF. There was no indication that the board would have any kind of "presentation". Time for public comments is all well and good, but why is the board not sharing the information they have gathered in the TIF meeting which have not been open to the community? Maybe the board does intent to discuss this issue, but they gave no indication of theat tonight.
If Mt. Lebanon is better off than 95% of Allegheny why are we paying a developer to build here?
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