Economy Challenging TIFs, Speakers Say

Tax-increment financing is an increasingly popular finance tool for cities looking to finance mass transit development, but participants in such projects said that economic conditions have created several significant challenges for TIF undertakings. Speaking to an audience of mainly local government employees and bankers during a webcast sponsored by the Council of Development Finance Agencies and Stifel Nicolaus & Co., Alex Iams, a commercial development planner for Arlington Economic Development in Virginia, and Karl Stundins, area redevelopment program manager for Dallas, expressed similar concerns. Stundins said Dallas created seven TIF districts between 1988 and 1999, but saw an explosion in them recently, with seven new ones popping up between 2005 and 2006. Most of those are way up in value, he said, but others have not seen the expected increases. Local governments considering TIF need to find developers with pockets deep enough to absorb high up-front costs, and understand enough about market absorption to scale back overly optimistic projections from the developer, Stundins said.

Bond Buyer

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