The group is not against TIFs, Chris Nevitt, one of the authors of the report tells GlobeSt.com. "Tax increment financing subsidies are one of the most powerful and important tools currently available to promote redevelopment of blight properties," the report notes. "TIF is like a redevelopment credit card--we can buy new projects now and pay them off with future tax revenues."
The report notes that like a credit card, TIF subsidies pose risks and should be used carefully. "In Denver, we have already mortgaged over $500 million in future tax revenues to pay off existing TIF subsidies to private developers," the report claims.
However, John Huggins, economic development director for Denver notes that the income stream from developments that received TIFs would not exist if not for the subsidy, so these are new revenues being generated. In other words, there would be no new taxes without the TIFs, which the city sees as a way to encourage development that cannot get traditional financing.
The latest report examines the average salary at three major retail developments that received TIFs. They are Broadway Marketplace, where workers, it says, receive an average salary of $9.95 per hour; Quebec Square, $9.20 per hour; and Denver Pavilions, $8.46 per hour. That compares to an average retail wage in Denver of $11.15 an hour, and an average of $20.28 an hour for all jobs. However, a spokeswoman at Denver Pavilions questions the veracity of the average salary at Pavilions. Although she did not have the average salaries, she suspects they are low. Nevitt says the numbers are based on a survey his group conducted.
"Wages at the three major TIF-subsidized projects examined in the study are so low as to leave most workers' families unable to provide for basic family needs on their own," the report notes. "At these three projects alone, the estimated self-sufficiency deficit amounts to almost $23 million a year," the report says. "This results either in personal family hardship--extra jobs taking time away from family and community activity, skipped meals, missed payments of bills, unsupervised children--or costs imposed on publicly funded assistance. At the three TIF projects examined, it is estimated that workers are eligible of roughly $10 million annually from various public aid programs."
Nevitt tells GlobeSt.com that he is "frustrated" with the city because he says the problem can be addressed. Many other cities across the country already require a commitment from the developer that it will create jobs meeting certain minimum standards for wages and benefits before they receive TIFs. "The city should also establish a reporting system that allows for tracking the number, wages and benefit structure of the jobs actually created," the report notes. "This would allow the city to estimate the true net economic impact of any development."
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