posted by Mike Madison at 8:58 AM /
Zamagias Properties has submitted its final proposal for a TIF (tax increment financing) for the development proposed for the intersection of Bower Hill and Washington Roads.
The document is available online at the Municipality website. A link is a available on the "What's New" page at www.mtlebanon.org OR directly at the link below. WARNING - - It is a 41 page, 2.2 MB document.
http://www.tinyurl.com/2ptsb9
The next step in the process is the Mt. Lebanon School Board meeting on Monday, March 12, when the Board will hear public comments about the proposal. If you want to have face-to-face input on the proposal before the School Board votes, then go to the March 12 meeting. The vote itself isn't until later -- March 19 -- but there will be no meaningful opportunity for public comment at the March 19 meeting.
In related TIF news, the Mt. Lebanon Commission voted to extend the deadline by which Zamagias must get this deal done.
Link: http://www.post-gazette.com/pg/07060/765642-55.stm
The document is available online at the Municipality website. A link is a available on the "What's New" page at www.mtlebanon.org OR directly at the link below. WARNING - - It is a 41 page, 2.2 MB document.
http://www.tinyurl.com/2ptsb9
The next step in the process is the Mt. Lebanon School Board meeting on Monday, March 12, when the Board will hear public comments about the proposal. If you want to have face-to-face input on the proposal before the School Board votes, then go to the March 12 meeting. The vote itself isn't until later -- March 19 -- but there will be no meaningful opportunity for public comment at the March 19 meeting.
In related TIF news, the Mt. Lebanon Commission voted to extend the deadline by which Zamagias must get this deal done.
Link: http://www.post-gazette.com/pg/07060/765642-55.stm
Labels: municipality, school board, taxes, TIF, washington park
17 Comments:
If you need a TIF for the project it is overpriced and forces the community to pay for expensive condos.
Not one school board member has a house assessed at the average price of these condos. Why would they vote to pay taxes on houses nicer than their own?
When this TIF issue is done and dead.....I think we shouldhave a parade down main street with Bill Mathews as GRAND MARSHAL! Bill Mathews for Mayor!
This site has been ugly for years. It is good to see a project, but c'mon. $500,000 condominiums getting a $1,301,251 taxpayer funded public park? Install a sidewalk and plant some grass, done.
The TIF will pay for land. TIF bonds will borrow $6.1 million but only $4.6 mil will go into TIF.
The money borrowed to TIF land worth $1,088,329 is $1,443,219
($1,088,329*6.1/4.6). That's $354,890 above the land's value
. . . + . . . 20 years interest
Based on newspaper accounts, our Mt. Lebanon Commission extended the Zamagias Properties TIF deadline with limited zeal. Nevertheless, later this month the Municipality will ask the School District to get on board the TIF Express.
How about a little unbridled enthusiasm when asking the Community to support diverting future (incremental) taxes from education and essential government services?
More later …
I don't really care to know but it would be interesting to find out if there is the same level of outcry over the TIF being used to partially finance the new PNC skyscraper downtown as there is over this one in Mt. Lebo. My guess is that there isn't and, lo and behold, a formerly nasty area around 5th Avenue is being brought back to life. But, as I've said before about all of you, "progress, we don't need no stinkin' progress." Keep looking at that beautiful Dyke Auto building. That's the future of Mt. Lebanot.
You asked, so here you go.
Yes, at least some of us who have been opposed to the Zamagias TIF have also publicly spoken out against a TIF for the PNC building:
Here, and here, for example, and if you surf the Pgh blogosphere, you'll find similar sentiments elsewhere.
Have the residents of the city come out in force to condemn the PNC TIF? No, partly because the heavy hand of the Commonwealth is behind the project (so a local outcry would be largely fruitless, unfortunately), and partly because the forces of truth and right in the city have much bigger fish to fry -- a bankrupt city, a falling tax base, a barely competent and perhaps corrupt municipal government. Understandably, I think, attention has been focused elsewhere. But the PNC project is bad economic developemt strategy just as the Zamagias project appears to be.
I hear bunches of skepticism around the notion that land selling for close to $1,000,000 an acre is “blighted.” Just for a minute let's put the blight question aside, an equally relevant question may be: Is TIF even necessary to deal with the "blight"?
My impression is the well intended TIF law contemplates that blight should be so severe as to REQUIRE public assistance to eradicate the conditions. In support of my position I offer that the TIF law specifically requires the Municipality to pass a resolution that states in part:
“The (TIF) District is a blighted area containing characteristics of blight as described in the Urban Redevelopment Law and the project to be undertaken is necessary to eliminate such blighting conditions.“ (Note: not simply “will eliminate” - - but “is necessary to eliminate”)
Most TIF advocates consider the mere finding of “blight” just the “key to the coffers” of public monies. I believe this parallels the view of the Municipality. A few years ago, a Commissioner said in a public meeting that it was unfortunate the legislature ever used the term “blight” - - he thought the term “TIF eligible”’ was more appropriate.
The municipal sponsored fleecing continues …
I am for progress. I am for cleaning up this idle property and adding it to the tax base. I am not for giving away the taxes it might generate so the developer can either make a killing or build something that can't justify itself. I heard Zamagias threatened to quit if there was no TIF a couple months ago. Who promised what to get him back. Doesn't sound like the Commission has a handle on this.
As I have said in the past, I hate taxes and I hate that our country has come to this. This is the evolution of our democracy, though. It used to be that people were able to run their lives and businesses without the govt. intervening in everything from the materials their children's pajamas are made to the amount of feet there needs to be between the front of your house and the road. But then a combination of technology, trial attorneys and an amazing capitalistic economy took hold and put us where we are today. Things will not revert to the way they were, it is only going to get worse. Soon we too will have a nationalized healthcare system, $6 per gallon gas and a top tax rate in the 60's. Ever fly from Pittsburgh into Dulles or National? Do you think it is privately made money building all those homes and office towers? I think not. American is still the greatest place to live in the world, but our society is on the decline. Might as well get used to this transfer of wealth and approve the TIF so at least we have a nice building to look and the schools get more money than they would have if the lots remain in their current sorry state.
Over the last 10 years we have averaged between $25 and $30 million dollars per year in private and public investment - - measured by building permits issued in MTL.
Yes, this includes the elementary schools, public safety building and municipal building. It also includes investments by St. Clair Hospital (one of our Community jewels), the Galleria and numerous other commercial properties.
Most importantly, it includes around $100 million in additions and renovations to residential properties.
When we invest in our properties our taxes go up. When Zamagis invests they get a tax break. Exactly who is asleep at the switch? Let them make money the old fashioned way.
Yes, and I'm sure you are investing multiple millions into your homestead . And I have no doubt that the $5000 per year you have going into the schools is pushing them right over the top.....
Having looked at the TIF plan more, here are some quick observations. While the project is proposed on 2 phases, the numbers below represent the total project.
The total TIF borrowing is $6.1MM with $4.6MM (75% of total) being available for the project. The balance goes to issuance costs, capitalized interest and related expenses. This means, even before we get to debt service, we are paying $1.33 for every $1.00 of improvement.
Three components account for $4.0MM (87%) of the $4.6MM into the project:
Land Acquisition - $1.1MM
Parking Improvements - $1.6MM
Public Park - $1.3MM
Land Acquisition is a new TIF component in this draft. Because the project is now phased, with a big question mark hanging over phase 2, this enables the developer to recover maximum project costs with OPM (Other People’s Money), in the event phase 2 and the associated revenues are significantly delayed or never materialize.
Parking Improvements are heralded as a public improvement because this component includes 18 parking spaces for the Mt. Lebanon Parking Authority and 16 for the “public.”
As far as the Parking Authority spaces are concerned, they should be paid for by the revenues generated from the spaces to the Authority, or not be built. Additionally, please recall the Authority is selling its land for $520,000, 100% of its market value. Neither the developer nor Municipality is expecting any contribution from these funds to be applied to the construction of the parking spaces either. Hence, the Authority can eat its cake and have it too.
The Municipality has offered that while the Zamagias Properties project manager is also Vice Chair of the Authority, this has not afforded any advantage to either the Authority or Zamagias Properties. I can only take this to mean the Municipality would have offered this taxpayer unfriendly arrangement to any developer. Another wrong answer!
Lastly, the other 16 “public” off street parking spaces will be PRIVATE property and really intended to serve condominium guests and customers of the retail businesses. Imagine paying $500,000 for a condominium and having no place for guests to park - wouldn’t be prudent. Further, taxpayer funded, privately owned, free parking is an advantage not afforded to any other private business in the Central Business District or all of Mt. Lebanon.
Public Park is nothing more than a plaza area along Washington Road at the doorstep of the condominium and retail storefronts. Nice idea, but again, it will be PRIVATE property. The Municipality will have nothing to do with the care, maintenance, use and/or any associated liability of the plaza. Again, this is a direct advantage (without the construction expense) to the tenants and property owners.
Bill,
A question for you:
Zamagias would receive $1.1 mm in TIF funds up front for land acquisition costs, but because of the (new) phased nature of the project, it has no obligation to build the second phase, yet it get to use that money to help it carry all of the land? Is that right?
In other words, under the proposal, all of the land may never be developed -- yet Zamagias would own it and not pay taxes on it? Is that right?
Mike
Mike,
Yes and I’m not sure.
In phase 1 most of the land is used for building 1 and the temporary (could be permanent) surface lot. Upon completion of phase 1, Zamagias Properties could walk, particularly if phase 2 would dilute their financial return. At this point they will have recovered most of the land acquisition cost via TIF and other project expenses from sales proceeds.
The TIF funds may also enable the developer to move phase 1 at a discount and still protect their target margin.
If phase 2 is delayed or never built, all the property would still be taxable, albeit at a much lower valuation. But I am not clear on how it would be handled for ownership and tax purposes. Eventually I would expect all common areas to be transferred to the condominium owner’s association. Before and after the transfer, I am not sure what happens.
Before there is a condo owner’s association, Zamagias Properties could serve in that role. Rest assured they will not do it at a loss.
Without the TIF, the condominium owners would have to pay about $64,000 more per unit ($4,600,000 divided by 72 condomiums = $63,888). Is there any data that says they can only afford $500,000 condominiums and not $564,000? If you can't afford it, don't buy it. If no one will buy it, don't build it. Only government would think of a plan like this.
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