Part 5 – Lakewood TIF Debate Continues

Steve Willson replied to Ted Smith’s reply to Wilson’s critique of the Lakewood Tax Increment Financing District and SportsPlex yesterday.

Here is Wilson’s reply:

Ted, I appreciate it that you would write and challenge me on my reasoning.

With regard to your first comment, please consider the following two situations:

  1. The TIF results in NO incremental taxes for the schools for 23 years.
  2. There is NO TIF, and NO development for 10 years. Results: more taxes for the schools for the next 13 years.
Steve Wilson

Steve Willson

There is no way our Village Board can see 23 years into the future with sufficient confidence to make that judgment.

And, in fact, the way they did it was dirty.

You’ll see those details in my next post.

With regard to the potential subsidy for the SportsPlex, the evidence is strong that the only parties who benefit from TIF districts are the subsidized businesses.

California got so tired of the shenanigans involving TIFs, especially the beggar-thy-neighbor policies of issuing municipalities, that the State legislature prohibited all future TIFs and took over administration of the existing TIFs to make them pay off as quickly as possible instead of siphoning excess incremental revenues to the issuer.

You know what the worst situation would be?

That the SportsPlex gets built and then limps along, barely making money but not going out of business for 23 years.

The second version of the SportsPlex will cover the following area, some of which is owned by the Village of Lakewood taxpayers.

The second version of the SportsPlex will cover the following area, some of which is owned by the Village of Lakewood taxpayers.

There would be no marginal taxes, and we would have given up the possibility for a stronger business in that location.

So if we are going to give some business a subsidy, I do not think we should give it to a speculative business.

Better to keep our options open.

That’s why I don’t care what terms the Village negotiates with the SportsPlex.

I would rather have NO deal with the SportsPlex than the best deal the Village can negotiate.

In short, I would rather let the market decide what the best option for that location is, today and for the next 23 years.

Ted, I hope I have answered your objections.

If you have any other issues with what I’ve written, please write again.

All of my opinions are tentative and subject to change based on better evidence and argument.

My opinion on this issue is not knee-jerk, but the result of substantial research.

(Including that Lou Tenore tried to recruit me, so I’ve seen his business plan. I declined to work with Lou.)

And I prefer collaboration to debate. When people collaborate, they often come up with solutions neither had thought of alone.

If you present information or arguments I have not considered and the evidence favors your position, I will change my mind.

= = = = =

A second comment from Wilson appears below:

Ted, I want to make one more comment on your last point.

The five scariest words in the political lexicon are,

“We need to DO something!”

Too often what is “DONE” is worse than if NOTHING had been done.

Or, to put it another way, it is the taxpayers who are “DONE”.

I’m with you — I’d love to see development at the corner of 47 & 176. \

But I have no magic solution that is better than letting the market take its course.

But boards like to take action!

Doing nothing doesn’t get headlines.

And if they take “action” today and the TIF turns out badly many years from now, well, they’ll all be gone by then.

Remember that RedTail was purchased with all the best intentions.

Yes, the state set up this tool for the purpose of business development.

Unfortunately, good intentions rarely equal the actual results, and that is the case here.

Not only have most TIFs not resulted in excess development, there is a substantial history of abuse, of parties favored by those in office receiving the favors.

The Cook County Clerk himself has a video on his site about TIFs in which he refers to them as “slush funds”.


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