Herald-Leader Editorial

Lexington wisely attaches conditions to support for TIFs

December 17, 2013 

Heavy excavation equipment has been moved onto the CentrePointe block in downtown Lexington; on Sunday concrete construction barricades, above, were installed around the site.

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Signs are encouraging that one cold day soon, ground will be broken for the latest version of what's been called CentrePointe since 2008 but mostly has been a grassy lot.

More importantly and assuredly, there has already been a groundbreaking change in how the city looks at the tax increment financing, or TIF, that CentrePointe and several other local developments have been eager to get.

Now, instead of playing the role of beggar at the banquet, the city's insisting on getting something for what it brings to the table. And that's a good thing.

TIFs — which are used all over the country although Kentucky's tax forgiveness is especially generous — originally were designed to spur development in blighted areas. The idea was to capture the increase in tax revenue from renewed economic activity to repay some of the project costs, usually expensive infrastructure.

The local government must define the area included in the TIF and make the application to the state to establish it. So without the support of local government, no TIF, no money.

Despite that bargaining chip, historically little has been asked of the developers seeking TIFs, at least here. Fortunately, that has begun to change.

For CentrePointe, the city required the developers — who tore down a block of historical buildings, claiming that a mysterious unnamed financier was ready to invest — the city has insisted on seeing evidence of actual financial support before signing off. Additionally, because the first work on the site will be to excavate for a 700-space underground parking garage, the city has negotiated a lien equal to the cost of refilling that hole if the project stalls.

This protects the public from living with a literal hole in the center of the city, something that has happened in the past.

At The Summit, the high-end shopping center proposed at Nicholasville Road and Man o' War Boulevard, the city's negotiating to assure that runoff from acres of rooftop and parking lots won't flood adjoining neighborhoods.

Public officials, particularly elected ones, are often pressured to endorse developments that purport to spend money and attract jobs to the community with few if any questions asked.

Economic growth is essential to a vital community, but cities that want to distinguish themselves from the crowd must insist that development rise to the standard the community sets rather than accepting whatever is dished up.

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