Opinion and Editorials

EDITORIAL: TIF-district plan deserves support

June 4, 2011

The prospect of the city’s creating Tax Increment Financing districts in four core urban neighborhoods to spur the revitalization of those districts is reason for alarm among some observers of local government, but we applaud the city’s initiative.

The tax districts allow the city to capture new property tax payments within specific boundaries and apply those funds to infrastructure upgrades and other incentives designed to lure private investment.

Such tools are necessary in certain neighborhoods. The alternative is to give up on them, an unacceptable option in a city that must nurture its neighborhoods or continue losing investment and tax base to surrounding counties.

The precise boundaries of the TIF districts the city is considering haven’t been revealed—and might not be nailed down—but the identities of the neighborhoods (reported in IBJ May 23) are known, and three of the four clearly need a lift.

There’s some momentum in those areas that a TIF district could build upon. In the vicinity of West Washington Street and Tibbs Avenue, plans to redevelop the old Central State Hospital campus are being revived, as reported in last week’s IBJ. Across town, near East Washington and Jefferson Avenue, a TIF could be used to revitalize that downtrodden area in the same manner that TIF money has contributed to improvements 10 blocks north on East 10th Street.

The two other neighborhoods that could benefit from TIF money if the city decides to proceed with the plan are near 16th Street and the Monon Trail, immediately northeast of downtown, and the Midtown area, which covers a large area from 34th Street north to Broad Ripple between College Avenue and Illinois Street.

The area near 16th and the Monon was the subject of a study last year by the American Institute of Architects, which brought in national experts to envision its future. The Midtown area is more diverse, with pockets of prosperity and pockets of blight. That district will need to be carefully crafted to avoid directing tax revenue to projects for which there should be ample private investment.

While we generally favor the use of TIFs to spur redevelopment, critics of the districts raise valid concerns that the city would be wise to take into account as planning for new districts proceeds.

Among the concerns is that the districts seem to live indefinitely. As development occurs and the tax base improves, the extra revenue generated continues to feed new projects or pay off debt incurred to spur development and therefore never reaches schools, libraries or other entities that theoretically should benefit from neighborhood revitalization. We agree TIF districts shouldn’t last forever. If a TIF is effective, there should come a time when it isn’t needed.

That would be a welcome outcome in the neighborhoods now under the city’s microscope. Some of them have needed attention for decades. We hope they finally get the help they need to become magnets for private investment.•

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To comment on this editorial, write to ibjedit@ibj.com.

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