Last month, to the consternation of a couple dozen nearby residents, the Lincoln City Council declared Meadowlane Shopping Center “blighted,” a term that Councilman Bennie Shobe rightfully called an incendiary word that conjures up fears of tanking property values in a decaying neighborhood.
But this designation of “blighted,” as in the vast majority of cases in which it is declared by the council, is essentially a term of art necessary to allow the proposed redevelopment of the shopping center at 70th and Vine streets to qualify for tax-increment financing.
Originally designed to stimulate private investment in redeveloping neighborhoods that truly were blighted, and initially primarily aiming at assisting in the creation of affordable housing, TIF has dramatically expanded over the last five decades to include almost any economic development project that can be construed within its guidelines.
That, quite simply, is because TIF, which diverts future property tax revenue increases from a defined area toward an economic development project, is the most impactful development assistance tool available to local governments.
So, in another recent example, the proposed $25 million-plus Pershing Center redevelopment in the heart of downtown, is expected to use $3 million to $4 million in TIF funding.
There has been debate over whether any TIF project ever fully “pays for itself” since TIF was first used in California in 1952.
Proponents argue the property tax revenues diverted for the TIF projects are more than offset by the economic growth from the project that brings in more business and higher incomes
Opponents maintain those increases are difficult to quantify and that by using property tax revenues alone, it will take decades for the TIF funds to be matched by the property taxes paid by a project.
Questions also have been raised for decades about whether any project would have gone forward without TIF financing and whether TIF, having gone beyond its original intent, is being used for too many projects..
None of those, however, will ever be answered as long as TIF remains the only major tool available for local governments to provide financial assistance for redevelopment projects.
With few alternatives being proposed, nationally or in Nebraska, TIF isn’t going anywhere any time soon.
That means that for years to come, there will be more designations of “blight” in neighborhoods that don’t appear to be blighted -- and more upset neighbors.
But it also means there will be more TIF-funded redevelopment projects that help maintain existing neighborhoods and businesses and bring in new housing, business and public spaces, that move the city forward to the benefit of all.