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Let's stay away from TIF

The view inside of Ridley Tower is impressive.

The marble ionic columns lift the vaulted ceiling and grand arches, preserving the history of Marion with their character. As the tallest commercial building in Marion, it’s no wonder developers are drawn to revitalize and repurpose it into a centerpiece of downtown development.

Building a more lively, robust downtown is a great idea, but the funding of the project is not a matter to take lightly.

The efforts that Mike Halstead is undertaking should be commended since we agree with what he told the Marion Redevelopment Commission Wednesday: It’s a risky endeavor.

Halstead said he has invested $1.5 million into the project already, and everyone in Marion should be happy to see someone dedicated to making downtown Marion a better place to live and work.

The idea sounded great, until the redevelopment board debated issuing a tax increment financing (TIF) district for the project as members talked with Halstead Wednesday. To get some of the grants on the developer’s wish list, TIF is needed, he said.

Redevelopment board member Ed Merchant did the right thing by expressing concern about issuing yet another TIF and bonds. He encouraged city officials to wait until tax credits are approved and a major partner joins the project before the city gets involved.

“The last thing any of us want to see is another YMCA debacle,” Ed said Wednesday. “A half-finished building is worse than it is now.”

There should be healthy skepticism about the city getting involved in the private sector. A quick search of Chronicle-Tribune reports show the Old YMCA project failed, Veriana failed, TriEnda failed, Earthbound failed, efforts to build a hockey rink failed and an attempt to build a medical park at I-69 failed.

The city lost more than $2 million in the Old YMCA catastrophe, and efforts to reclaim lost money in court is adding up fast with no clear end in sight.

Public involvement in high-risk projects is not a good use of taxpayer dollars.

Before a TIF district is approved, the city needs to remember that TIF can be used improperly.

“Indiana law now makes clear that TIF is intended to fund infrastructure to promote development that would not occur but for the added infrastructure financed by the TIF revenues,” Purdue University professor Larry DeBoer wrote in a joint report by the university and the Office of Community and Rural Affairs. “... TIF is not meant as a source of revenue for responding to ongoing development, nor as a substitute for other sources of infrastructure funding.

It is apparent that development is already occurring in the location without the TIF district, and the uncertainty surrounding the project’s success only makes public investment more questionable.

The editorial board believes economic development should be driven by market forces, not TIF.

We stand by our previous assertion that city government should stay out of the way and let success, driven by the private sector, happen.

TIF can be a tool, but given the city’s recent history with TIF and debt, the risk may not be worth the reward.