Lebo School Board Member Jo Posti on the Washington Park TIF

Thanks, Bill, for sending along the full text of Jo Posti's remarks at last night's School Board meeting regarding the proposed Washington Park TIF. I've reproduced those remarks below.

The Board is scheduled to vote next Monday, March 19, on whether to participate in the proposed TIF. Jo Posti has been a school board member of the TIF committee.

Her email is jposti@mtlsd.net. You can send email to the entire School Board at schoolboard@mtlsd.net.

When we voted to participate in the TIF committee back in June, I voted “no,” explaining that my greatest concerns were process and policy. I was troubled by a process that excluded the District during the project discussion stage, asking us to help finance a development that we did not have the opportunity to help select. I was also concerned that we do not have TIF guidelines to direct our decision, only specifications of one particular project that we need to react to.

After participating in the TIF committee, I continue to have these concerns. There’s been much public debate over the TIF – debate that should have started, in my opinion, with the creation of TIF guidelines. While a TIF’s purpose is to provide economic development within a certain area, it is also an opportunity to provide a benefit to the community in exchange for the diverted tax dollars the project is financed with. Some of the public benefits a residential project like this can provide through policy are affordable housing, sustainable development through green building initiatives and an increased ability for District employees to live within the District. TIF guidelines can also spell out what level of increment a taxing body will entertain, a surcharge on any TIF to finance school projects and the mandate that the municipality provide increments for the taxes it levies but for which the District has lost right to, like parking taxes.

I am not against TIFs in principle. There are examples throughout the county of TIFfinanced projects that have made an economic impact in blighted areas. There are also examples of large-scale failures. A TIF is not at all a “sure thing” or “something that’s better than nothing.” In the end, a TIF does not solve all of a blighted area’s problems - market conditions and the free market play a role in the success of a TIF. For me, an understanding of the market demand for this project as well as our community’s market conditions was important in determining my support of the project since I did not have District policy to fall back on. If I wasn’t able to refer to our District’s collective values, I had to determine the project’s value to the community.

Unfortunately, the market study provided did not adequately present a case for units of this price point. Rather than describing current market conditions or illustrating a demand for housing that is more than twice the median sales price of homes in Mt. Lebanon, it was a historical analysis of similar housing sold in communities with similar demographics during recent years. The change in the scope of work from a two-phase project to a one-phase project with an option for a second phase does not affirm my confidence in the project. As a quality-driven organization, much of our decision-making rests on data and I need data that supports market conditions that demand half-million dollar units in Mt. Lebanon vs. housing priced closer to our median. The municipality itself has reported that our community lacks the level of affordable housing that would entice the employees of our largest employers – the school district, St. Clair Hospital and Asbury Heights – to buy homes within the municipality. Municipal officials have indicated that the high level of turnover at our health care facilities is related, in part, to the commuting challenges those employees face. As for the school district, I would like to help entice our employees to live in the District; this is something that I personally feel strengthens our community and enhances the connection our faculty and staff have with their students and parents.

Public improvements – while the elements financed by the TIF qualify by law, they do not, in my opinion, offer substantial public improvement that would warrant diverting taxes should the project be built. Many of the public improvement elements include in the TIF are improvements that would be made by any development, regardless of funding source. The Bower Hill turn lane is important to the community and while I’d be willing to help the municipality fund it, I’d also like to explore partnership opportunities that help the District accomplish its capital improvement goals, not just the capital improvement goals of the Parking Authority.

The delays associated with this project are unfortunate as this property has, in essence, been off the market for so long that it’s tempting to move forward in order to quit wasting time. However, I can’t overlook the fact that while the competing project had elements that would have qualified for a TIF, they were of the opinion that they could have moved forward with their project without one. That project would have developed the entire block, to Kenmont and Oak Way, rather than limiting development to what may just be Phase 1 of the Washington Park project. I do believe that this parcel can be developed without TIF financing if given the opportunity for the free market to work.

Allegheny County’s relatively short history in TIF projects has produced mixed results. In my opinion, this is due in part to their origins being largely developer driven rather than driven by the taxing bodies impacted. This results in precedent rather than policy. My fear is that our participation in this particular project would be a decision made not on data but because it’s the only offer on the table. Rather than believing that something is better than nothing, I need to be convinced that we haven’t limited ourselves or Mt. Lebanon’s ability to develop the entire block.

Another large concern is the impact Act 1 would have and for this we have neither precedent nor policy. We cannot predict whether our Act 1 referendum will pass in May and even the Janney report identifies it as an issue to which they have no answer. We would probably be the first TIF project in the County to see Act 1’s impact. Again, I need data to better analyze how much real estate assessed values may be reduced and how this would effect the District’s tax increment. Unfortunately, there’s nobody who can predict what that impact may be.