I read the account of the city council meeting where the $16 million in TIF funds for the Edgewater was kept in the capital budget.
It was reported that the property tax increment from the new development would be approximately $750,000 to $1 million per year. That is very important, since the city cannot count room tax and sales tax revenue toward the TIF payback calculations (since Edgewater will be poaching business from other downtown hotels, whose room and sales tax collections for the city will therefore decrease).
It wasn't clear, however, whether the $750,000 to $1 million property tax increment referred to the city's share of the property tax bill, or to the total property tax bill. This is also important, since the county and school district get a cut of the annual property tax bill (but are not ponying up for the TIF money).
I don't think the $16 million makes sense as an investment for the city in future property tax revenue. The payback will be long, and interest must be paid in the meantime on the $16 million the city will borrow to finance the project.
It may make sense as an economic stimulus measure, to create some construction jobs now and additional service jobs later. If that is the justification for the investment (and it was certainly the reason for organized labor's support of the project), then Alder Satya Rhodes-Conway's attempts to insert some union-friendly requirements on the project make a lot of sense. After all, if taxpayers are forking out money to buy jobs, we should be sure they are family-supporting jobs that will go to area residents (rather than minimum-wage jobs that will be filled by trucked-in immigrants who will send or spend most of their paychecks back home).
How long will it be, though, before Inn on the Park comes to the city to ask for TIF money to remodel and expand, in order to compete with the newly-refurbished Edgewater? Inn on the Park is also past its prime. Will the city be able to deny them a level playing field? Should city government pick winners and losers in a soviet-style planned economy? How many hotels can we afford to remodel?
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