City of St. Petersburg politicians want to build the “Lens” as a replacement to the deteriorating pier for a starting cost of $50 million. That is for “Phase I”. They have been sending their agents around to neighborhood association and community meetings to sell the plan and offering multiple deceptions to support their position along the way. One of the major deceptions is that “the money has been set aside” and it “won’t raise taxes” one penny. The nature of the deception is that the taxpayers will actually be required to back a $50 million loan (in the form of a municipal bond it must repay) and if that loan were not taken to build a new pier, the money would be returned back to the pockets of the taxpayers or could be used for other purposes. In other words, to the surprise of nearly no one, the new pier WILL cost taxpayers considerable amounts of money, and will surely cost much more than the much heralded $50 million figure. To unlock this mystery, one must be introduced to the magic government potion know as “TIF” or Tax increment Financing.
TIF’s are used as a way to borrow money against anticipated future tax revenues. The city draws a line around a designated part of the city, in this case a multi-block area extending from about Tropicana Field to the pier a few blocks wide. Those blocks are called the “Community Redevelopment Area”, or CRDA and in this case is designated the “Intown CRDA”. The total “Taxable value” of that area is “frozen” at the year the CRDA is established. Any taxable value that develops after the frozen year are used to go directly into a fund called the “Tax Increment Finance” zone. This explains the motivation to allow major development through cond’s in the intown area: to grow the taxable vale of the CRDA. The intown Zone held its taxable value at about $200-$300 million until the housing boom and it rose to just over $1 billion from its original starting point of about $108 million. The values have since fallen to about $815 million. Based on this “Excess Taxable value”, the city diverts millions of dollars every year into a special fund. The total amount diverted last year totaled about $7 million, down from $9 million a few years ago at the height of the housing boom. Now here is the grand deception. That money is not “saved” so that it can be used to buy things like a new pier. Instead, it is used to pay interest on debt that the city takes on for projects like the pier.
So the city is not “saving money” to pay for the Pier. The money is not “set aside” in a TIF fund. The Taxpayers will be required to pay the interest on a $50 million loan. The interest at this point is scheduled to be $5 million. However, as the cost of the Lens goes up, it is likely the borrowing and interest costs will increase. Furthermore, if the taxable value continues to drop, the amount of money available to pay for the Lens debt will also fall. That means, the taxpayers will be obligated to pay any debt that can’t be covered by the TIF revenue. As of August of 2011, the city reported to the Sun Beam Times that the total amount currently in the “Intown” TIF account is $1.8 million. Current revenues are obligated to pay debts on prior projects for Mahaffey Theater, SouthCore garage and BayWalk-related public initiatives.
The other great secret is that money for “CRDA’s” through TIFS were originally designated for blight. Those who live in St. Pete should drive through the waterfront area with its gleaming condos, bistro’s, beautiful museums and boutique shops and take a picture of the “blight” for the record. There won’t be any pictures to take! Finally, if the city doesn’t spend the money on paying interest on unneeded debts, that money would be returned to the government. That money could then be used to pay back the taxpayers or find a better use for the taxpayers.
So as political agents go around the city to grow support of the Lens, remember that when they say the money is “saved” or “allocated” or won’t raise taxes, you are being deceived. When politicos deceive in this way, they should not be trusted and any other information they present is suspect. Go to the group “STOPTHELENS.com ” to join the effort to stop the entire Lens project in its tracks.