This relative absence of sport venue TIF literature matters because TIF can be an effective means of obscuring the true public cost of sports facilities. With considerable work indicating a lack of strong returns on major public investments in sports venues, TIF is a way for actors desiring a stadium or arena to obtain a public subsidy that may attract less scrutiny or resistance than other revenue sources. Similarly, TIF—as a subsidy frequently tied to the creation of assessed real estate value—is central to the growing phenomena of team driven real estate development surrounding arenas and stadiums, which has the potential to transform blighted areas of inner cities or anchor new suburban centers.
As part of a larger series accounting for the instances and extent of TIF use in North American major professional sports, this article intends to help shine a light on venue related TIF through a comprehensive inventory of the statutes shaping its proliferation. Beyond a public notice and identification function which may serve cities and their citizens as a referential resource in contemplating the merits of TIF in a stadia project, I intend to help begin closing the identified academic research gaps while setting a baseline for future work on associative relationships and the normative value of facility TIF.
More specifically, this project undertakes a comparative mechanical analysis of TIF statutes in thirty-four American jurisdictions (thirty-three states and the District of Columbia) where major league professional sports are present, or the capacity to host major league sports exists. While my other work has overviewed facility related TIF projects at the unit level, an analysis of individual projects with the intent of deducting larger trends cannot be viewed in a statutory vacuum. Indeed, a primary overarching hypothesis of my work on TIF and sport facilities is that the availability and permissiveness of local and state TIF policy is associated with the presence and size of TIF subsidies to professional sports facility related projects. Accordingly, as a step towards testing this hypothesis, this project aims to set a baseline status of TIF statutes in jurisdictions where there are, or the capacity exists for, professional sports teams in the five major North American leagues. After a brief discussion of the literature, as well as the methodology used in this study, I proceed to covering forty-two TIF statute variables across ten categories in thirty-four jurisdictions. In addition to a broader discussion of what the presence or absence of a variable means for a TIF statute, I apply this analysis to the facility context.
While there is significant variety in the mechanical components of TIF statutes across the jurisdictions in this data set, my review leads to three primary conclusions. First, most jurisdictions limit the use of TIF to property taxes, taking off the table the most potentially lucrative and volatile source of TIF revenue, sales taxes. Second, there are few substantive restrictions on TIF proliferation that pose actual hurdles to the creation of a TIF zone where the political will exists to do so. Third, while there are scarce functional barriers to TIF creation, most jurisdictions limit what TIF funds can be spent on to public improvements, and this limitation either relegates facility related TIF to supporting infrastructure (a still substantial, but often hidden cost in stadium and arena deals), or further incentivizes public bodies to retain ownership over facilities.
II. Explaining TIF
TIF involves designating a geographic area within a taxing jurisdiction where a revenue baseline is established. Revenue below the baseline will continue to flow as before, but new “incremental” revenues are retained and spent within the geographic zone for a period determined by statute.1 TIF is intended to spur private investment that would not occur with the same benefit to the TIF using jurisdiction but-for the subsidy. Although its roots are found in urban blight alleviation, TIF has become a favorite tool of local economic development more generally.2 Yet despite its popularity, the academic literature is quite mixed on its merits from each of a property valuation, economic development, and fiscal impact perspective.3
There are four primary and overlapping reasons for TIF use: financial utility, political utility, overlapping capture, and competition. With the first, Weber conceptualizes TIF as a means of smoothing revenue fluctuation for local government over a project’s lifetime—by nature the costs of a new development project will be frontloaded and the revenue benefits mostly received on the backend. TIF allows financing improvements up-front while limiting the risk pool to project itself.4
On the political front, TIF provides a bureaucratic incentive for local economic development agencies to gain an earmarked source that does not have to be fought over with rival elements of local government come budget time.5 Likewise, TIF diverts revenue instead of raising tax rates, in theory seeing that the fiscal impact is less directly felt by taxpayers.6 Thus TIF creates a political shield for elected officials relative to the alternative of raising property or other taxes to fund improvements.7
Even where but-for is not present and the financial utility cost-benefit calculation does not meet muster, a TIF project may yet still become viable through capturing revenues from overlaying and neighboring jurisdictions.8 For instance, where property tax revenue will generally make up a plurality of TIF diverted revenues, most jurisdictions will have some combination of school, county, transit, hospital, and library mills that may combine to be more significant than revenues flowing to a municipal general fund. Further, as the boundaries of these overlaying taxing jurisdictions often do not mirror municipal boundaries, TIF is an opportunity to lessen the relative share of these overlaying services for the taxpayers of the TIF initiating municipality.9
Similarly, TIF provides a facially safer route for localities to compete with financial assistance to firms. Whereas a non-TIF dependent grant to lure (or retain) a firm or project may not produce a return sufficient to justify the subsidy, a developer reimbursed TIF project will only pay out to the proponent if the return is as expected. This shifts the risk of underperformance to the private party, forming a sort of stop-loss mechanism on a subsidy race to the bottom.
III. Public Finance of Sports Facilities
Significant work exists showing that sports venues do not positively impact economic growth in a city or region.10 Still, the facility, its resident sports team, and a surrounding entertainment district can be seen as a way to compete for talent with alternative locales. This Tieboutian11 competition is on two levels: between regions for the monopoly scarce opportunity to host a franchise, and within a region to direct activity to a particular area. Rosentraub argues that despite not positively impacting regional economic growth, professional sports can beneficially reallocate activity within a region.12 Likewise, access to the major leagues may impact firm location decisions.13 However, while the presence of a new facility may alter the composition of local services and property values,14 there is mixed evidence on relationships between land values and venue location, with some showing positive localized returns15 and others finding stronger appreciation in a neighborhood after the departure of a team.16
But how do stadium subsidy deals get done? Building off of regime theory, so-called “local growth coalitions” of politicians aligned with major local companies and media outlets, have been viewed as influencing public subsidies.17 Beyond making arguments of economic growth and redevelopment, local growth coalitions spend significantly on ballot measures, and frame the alternative of not reaching a deal as losing the team.18 Politicians can also succumb to the pressure of not wanting to be remembered for losing a local institution or national status symbol.19 Indeed, Delaney and Eckstein found that local growth coalitions have more success in former industrial cities that have seen structural economic challenges.20Conversely, other cities without teams may wish to offer generous subsidies to gain or reclaim “big league” status.
IV. Why Use TIF to Finance a Sports Facility?
A. Public Approval and Local Political Risk
Beginning with the objective of approval for a public investment in a stadium project, the contingent valuation literature highlights that the public is willing to place some financial value on a facility amenity, but that there is a gap between willingness to pay and the actual cost of subsidies.21 In turn, the professional club is likely to have an expectation for public funding based upon comparable subsidies in similar markets.
While a bargaining gap could be closed through any number of financial means, TIF is particularly attractive because of its ability to be sold as a self-financing instrument that does not increase anyone’s tax rate.22 Through a TIF allocation, while the club is getting closer to its desired subsidy objective, local politicians and supportive media can plausibly say that the subsidy cost has not increased. Even though this argument may be a fiction, TIF provides a more saleable fiction than a direct grant. Such tactics may have been seen with the TIF funded Edmonton arena, where Scherer documented elements of an apparent local growth coalition using self-financing TIF arguments to successfully pushback against opponents.23
TIF again also allows for the capture of revenue from overlaying jurisdictions, such as counties and school boards.24 Thus only a portion of the TIF cost will typically be borne by the proponent local government and captured revenue would otherwise not be controlled by this local government. This capture is extended through the use of federally tax-exempt bonds.25 Unlike many revenue sources that are directly related to a facility that have been barred from being direct collateral for federal tax-exempt municipal bonds, TIF revenue (through incremental sales and property taxes) is a permissible inclusion.26
The lessening of adverse public opinion resulting from increased subsidization to close bargaining gaps, combined with the below described financial risk management benefits, allows TIF to likewise reduce electoral risk for local government decision-makers. By smothering potential public opposition to the highly visible facility deal, the prospective oxygen for new electoral opponents is possibly also reduced; anti-subsidy politicians will have a less obvious base to draw from.
B. Financial Risk Management
An instrument premised on development around the facility site—whether that revenue is derived through gains in assessed value, or commercial activity—not only makes it easier to sell the project as urban redevelopment, but can serve as a shield to the public’s downside financial risk.27 Whereas other prospective revenue sources have no direct relation to development outcomes, TIF can be structured so that the club only gets paid the subsidy if new development or commercial activity occurs in the stadium district. Thus, TIF can facilitate better conformance to the benefitting party pays principle than most alternatives, while likewise shifting underperformance risk—in completion, budget, or revenue terms—to the private party.
C. Sub-Federal Political and Financial Risk Management
In some instances however, instead of shifting risk from public to private partners, TIF can be used as a means of downloading facility underperformance risk from state to local governments. This shift has two primary benefits for state governments, respectively based in political and financial risk management. The former is the same masking function used by local governments to mitigate political risk in public-private partnerships—again unlike direct grants or tax rate increases, which are easier for taxpayers to see both as corporate welfare and an increase to their tax bills to facilitate corporate welfare, TIF is not immediately visible.28
Building off this masking function, whereas the transfer of direct grants and tax rate increases place the financial cost squarely with the state, these up-front transfers are no guarantee of the project meeting longer-term performance expectations. Structuring TIF so that local governments are responsible for covering revenue shortfalls serves three purposes: transferring financial risk to local governments, dissuading local governments from embarking upon projects reliant upon incremental state revenues where the local government does not truly believe the TIF district will meet financial projections, and protecting state governments from local government optimism bias commonly found in megaprojects.29
While state and local governments have obvious incentives to enable or embark upon TIF projects, overlaying jurisdictions whose share of property tax increment is liable to be captured and diverted from its intended purpose, have less clear reasons to consent to TIF participation. The simple answer in some states is that non-initiating jurisdictions have no choice: their increment is simply frozen at baseline levels when local governments implement TIF.30 With school districts however, the picture is complicated by state aid formulas by which the state sets a minimum per-student property tax amount and will make up the difference for districts that fail to meet the threshold.31 Thus for some school districts, captured TIF is merely replaced by state funding and TIF has the potential upside of creating greater than state level funding in the longer term. This incentive can be compounded by negotiated agreements between a school board and municipality.32 For instance, local governments may agree to transfer a share of their sales or other tax revenues in the TIF zone to make up for lost increment. Accordingly, a school board could receive state aid for lost property taxes on top of negotiated shares of non-property tax increments.
Where a county is not the TIF initiator, there is a more facially understandable reason for participation than with a school board. If the county or its development agency believes that financial assistance to business, and specifically TIF, works, then it will be inclined to be supportive. Likewise, if TIF is viewed as a means for the county to compete with neighboring counties, the county will happily allow a municipality to take on the lion’s share of the subsidy cost for a project that will likely benefit the county as a whole, if not all municipalities in the county. Also, where state statute allows for negotiated county participation, counties can negotiate project design to reflect specific county objectives, as well as minimize the potential for deadweight losses through intra-county municipal competition.
V. Contextualizing Sports Facility TIF Use
TIF’s flexible application and differing statutory scope across sub-federal jurisdictions means that it can be used in numerous ways to subsidize facilities or ancillary real estate development. Intended as illustrative aids as opposed to comprehensive case studies, the three examples below correspond to facilities in three leagues and political jurisdictions with divergent landscapes. These instances respectively concern TIF as the most easily available and primary subsidy means in a struggling city (Detroit), TIF as the centerpiece of a sports focused suburban growth strategy (Frisco), and TIF as a means of providing community benefits to build a political coalition for a stadium (Washington DC). However there are other significant forms, including facility renovations, closing developer cost gaps to construct ancillary real estate, facility related infrastructure (such as parking garages and road connections), and redeveloping former sites.
A. Detroit—Little Caesars Arena and Unfulfilled Promises
Little Caesars Arena is the single largest use of TIF in a sportsvenue.33 A total of $324 million in Detroit Downtown Development Authority (DDA) TIF funding has been provided to the arena out of a total capital cost of $862 million.34 TIF may have been the subsidy form of choice for several reasons: the political inability to find other significant revenue sources in a fiscally struggling city, county, and state, the control of TIF by non-elected DDA interests reminiscent of a typical growth coalition, and the lack of direct tax increases.
The arena deal and its TIF subsidy was sold as part a more ambitious neighborhood redevelopment plan by the Ilitch family (owners of the Red Wings, Tigers, and Little Caesars pizza chain), through their Olympia Development Company (Olympia). The fifty-block District Detroit plan, pledged to infill vacant lots into a coherent mixed-use district anchored by the arena, the football and baseball stadiums, as well as the Ilitch owned Fox Theatre, while more broadly connecting the downtown and midtown neighborhoods.35 However while Olympia originally promised to have ancillary development substantially constructed alongside the arena, the eighty-four acres of Ilitch owned lots in the area have for the most part remained unimproved or converted to surface parking.36 Although Olympia maintains that District Detroit will be eventually completed, the District Detroit website has replaced reference to the five proposed neighborhoods with links to purchase parking.37 This is also not the first time that the Ilitches have secured stadium subsidies accompanied by the premise of ancillary development—fifteen years after $144 million in subsidies were provided to Comerica Park (home of the Tigers), the planned “Foxtown” entertainment district (which was substantially repackaged into District Detroit neighborhoods) remains surface parking.38
The deal made a further $74 million in TIF subsidies available to Olympia upon the completion of at least $200 million of ancillary development within five years of arena completion.39 While this may appear as if subsidies are being tied to tangible construction results, this is a relatively low threshold relative to not only the $74 million itself, but when considered alongside the original $324 million. Despite this low threshold and high subsidy ratio, Olympia received permission to include Little Caesars’ new headquarters building on the rapidly gentrifying downtown side of Woodward Avenue, the new Mike Ilitch Business School beside the arena (moved from an originally planned site on the Wayne State University campus outside of the DDA zone), as well as Olympia owned parking garages to be included in the $200 million calculus.40 With this revised formula, Olympia has met the $200 million threshold to obtain the $74 million in additional TIF without delivering on District Detroit.41
Further, these outcomes have emerged after a decade of land assembly in the area by Ilitch controlled firms, during which the area has become more blighted than may have otherwise been the case had other parties controlled the properties (such as Dan Gilbert’s ambitious Bedrock development company).42 The Ilitch strategy has seemed to be to drive down real estate prices in the area,43 acquire broad swaths for cheap, allow heritage buildings to deteriorate so they can be demolished for parking,44 wait for the time when other actors have changed market conditions, then extract arena subsidies based upon increment created by market conditions changed by others (as the DDA draws increment from the entire downtown area) while embarking upon their own development projects only when the upside is sufficient to beat the relatively risk free return on surface parking.
While much of downtown and midtown Detroit is experiencing heavy redevelopment, the Ilitches have seen a number of potential development partners walk away in frustration.45 For now Little Caesars Arena is another story of failure to deliver on big promises from rent-seeking team owners. TIF’s role has been one of a masking function—allowing exciting promises to receive massive subsidies with possibly less resistance than other alternative financial means.
B. Frisco, Texas—Toyota Stadium and the Sports TIF Suburb
Unlike in Detroit, TIF has been the source of aggressive and successful sports based real estate development for the Dallas suburb of Frisco. TIF accounted for the entirety of the direct public contribution to MLS’ Toyota Stadium and 50 percent of the total capital cost of $110 million.46 Little existed around Toyota Park after its 2005 opening besides a soccer field complex, but much has developed since. The stadium was aligned to be the north end of a boulevard leading to a new town center dubbed Frisco Square. In additional to local government buildings, the 147-acre development is intended to include several million square feet of master-planned urbanist commercial and residential developments.47 Constructed phases have filled in main arteries with four story mixed-use buildings, many with street level retail.
However Toyota Stadium is actually the second of four distinct TIF funded professional sports complexes in Frisco. The first, in 1996, centered on a minor league baseball stadium and Dallas Stars practice arena, surrounded by mixed-use apartment complexes and a hotel. Across from the sports complex is a large traditional enclosed suburban shopping mall, as well as an IKEA. The third complex, The Star, is the Dallas Cowboys headquarters, practice facility, and 12,000 seat indoor stadium. Up to $90 million in TIF has been authorized for the site, although only supported by a commitment to ancillary mixed-use development.48 While there are plans for development on 91 acres, the initial stages have seen an office building, an Omni Hotel, and several blocks of lifestyle center built on a TIF funded grid pattern.
Finally, TIF is being used for $19 million of $35 million in non-performance based subsidies to the Professional Golfers’ Association (PGA) to lure their headquarters to a new golf focused mixed-usedevelopment (Juarez, 2019, pp. 28-29).49 Under this agreement that will see Frisco host the PGA Championship, further performance incentives will largely be funded through increment generated from the site based upon the $600 million in planned investment.50
Since the commencement of Frisco’s TIF efforts it has been the fastest growing municipality in one of the country’s fastest growing regions.51 While TIF may not be fully explanatory for the city’s rapid growth, its TIF funded sports based real estate efforts have differentiated Frisco in a region with many options. Further, from a but-for perspective, it is difficult to see any of the four TIF funded sports complexes occurring as they did in Frisco (as opposed to a neighboring jurisdiction) without a subsidy.
C. Washington DC—Nationals Park and TIF Funded Community Benefits?
Although Nationals Park did not receive direct TIF funding, TIF did play a significant role in the stadium deal. The largely blighted area surrounding Nationals Park near the southeastern waterfront was designated the Ballpark TIF Area. Up to $450 million in incremental property and sales tax proceeds from ancillary development in this TIF area was to be directed to a Community Benefit Fund (CBF), from which a maximum of $300 million in TIF bonds were authorized for issue.52
Within the CBF, earmarks were made for certain wards and projects, with the largest allocations for school construction and library improvements.53 The CBF can be viewed as a product of coalition building for the stadium vote in 2004.54 Considerable mixed-use development around Nationals Park has transformed the neighborhood, creating over $1.5 billion in incremental assessments in the decade since the ballpark’s 2008 opening.55
However, the original intent of the CBF has not been met. In 2009, unspent balances from the fund were taken to cover general fund expenses, and in 2011, the DC Code sections concerning the CBF were amended to make transfer of increment to the fund subject to yearly approval in the District’s budget and financial plan.56 With no predictable allocation of revenues, the capacity to issue bonds was effectively muted. Whereas the 2011 financial plan projected dedicated TIF and CBF revenues as ranging from $58 million to $108 million in fiscal years 2012 through 2014, the 2012 financial plan revised these projections to zero.57
In DC, TIF effectively served as a flexible means to allocate funding on paper to close a bargaining gap between key council members and close a deal. Despite the failure to uphold the terms of this brokering, the DC example has proven TIF’s capacity to generate revenue to provide community benefits in jurisdictions where the local economy can provide strong demand for mixed-use urbanism. In such cases, the traditional TIF component of subsidizing developers on a but-for basis is seemingly replaced by capture of development benefits for a perceived social good.
VI. The Literature Gap
The sprawling TIF literature is primarily concerned with economic and fiscal impacts.58 While there is a sizable sub-literature written from a legal perspective, most of this work is concerned with a particular jurisdiction59 or variable (such as blight or but-for).60 This sub-literature however is light on broad comparison pieces on statutory mechanics and there is no work that applies a comparative survey of statutory mechanics to the sports facility context. Thus, this project is intended to address both gaps in a complementary way.
The primary previous survey of TIF statutes was published by Johnson and Kriz in 2001,61 writing from a public administration as opposed to legal perspective. However as the Johnson and Kriz62 study repeatedly cites 1997 as a date of reference, and the data set still included the Arizona TIF statute repealed in 1999, it is likely that the review underpinning their survey is now at least twenty years old. Indeed, the two states noted as not having TIF at the time, Delaware and North Carolina, now do.63
While this project shares significant conceptual overlap with Johnson and Kriz, it is not intended to be a direct update. First, seeing that this project intends to serve a larger facility focused TIF work, I focus on only thirty-four jurisdictions with the deemed capacity to host a club from one of the five major professional sports leagues. Second, although many of the same variables are collected in both studies, this study collects more and somewhat different variables. Third, the Johnson and Kriz article does not provide methodology on review and interpretation. While some elements can easily be reduced to a “yes or no” proposition, in many instances (and as made evident in this paper’s discussion of individual variable outcomes) even within a “yes or no” bifurcation, there is subjective nuance that goes into categorization. As I cannot replicate the initial methods of Johnson and Kriz, an attempt to include point in time comparison between 1997 and 2017 would be inherently flawed. For these primary reasons, this study focuses on the review described in the methods below.
VII. Methodology
Since TIF is a financial and policy instrument exclusively operationalized through state and local taxes and does not exist at the federal level, state TIF statutes govern the parameters and jurisdiction of TIF in the United States. This paper primarily evaluates ten categories of TIF statute elements in the twenty-seven states (plus the District of Columbia) where the five major professional sports leagues operate clubs: California, Colorado, Florida, Georgia, Illinois, Indiana, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Washington, and Wisconsin. While Arizona has major league teams in four sports, the state has not reintroduced TIF since its 1999 repeal.
The data set also includes seven states where there are not currently major professional sports teams resident, but these states are deemed to have the potential to host a major league team. This potential is defined in one of two ways: first, immediate proximity to an urban area in another jurisdiction that is home to a major league team, or second, having a metro market with sufficient population to support a major league team. The first category includes Delaware (Philadelphia), and Virginia (Washington DC), while the second contains Alabama (Birmingham), Connecticut (Hartford), Kentucky (Louisville), and Rhode Island (Providence).
The ten categories of TIF statute characteristics are: taxation sources that can be captured, permissible accompanying purposes, approval sources, forms of financing, requirements for a TIF district, type of TIF district available, permissible uses of TIF for public improvements, permissible uses of TIF for private improvements, permissible land uses, and TIF district lifespans.
Data was compiled for forty-two variables for all jurisdictions in the data set from a direct review of state TIF statutes complimented by annotated sources, law review and other academic articles, policy documents, and resources from the Council of Development Finance Agencies. Given the breadth of this study, variables were coded primarily as “yes or no” propositions, although many variables are again conceptualized in such a way that a spectrum of strength is more appropriate. However, as the objective of this article is to provide a general survey of larger trends across states, variables have been coded as to best facilitate this goal. Still, the potential for oversimplification as a trade-off for a cohesive state-level discussion, is a notable limitation of this study.
A. What Taxes Can Be Captured by TIF?
While TIF is most commonly associated with real property taxation, there are non-property forms of TIF as well, such as sales and income taxes. Some states also allow for PILOTs (Payments In-Lieu of Taxes) to be captured through TIF. For the professional sports facility context, sales taxes and PILOTs are most relevant. This study does not collect data on income or payroll-based TIF as these amounts are relatively insignificant in comparison to the financial impact the included sources can have.
Table 1. Allowable TIF Capture Source by Jurisdiction [See PDF]
Not surprisingly, all states studied allow real property based TIF. Property taxes are generally controlled by local governments, and as we will see, local governments are overwhelmingly the gatekeepers of TIF projects and areas. Thus, property taxes are the logical first tool of choice when it comes to TIF. The many variants of property TIF will be discussed at length throughout this paper.
After property TIF, the next most common form of TIF uses sales or consumption taxes. However sales tax-based TIF is not as widespread. Only thirteen of twenty-seven states with major league teams and a further three of seven potential host states, have sales taxes available for TIF capture, and only two (Indiana and Louisiana) allow for sales TIF absent a parallel capture of property taxes.64 There are two primary reasons why sales TIF is less common than real property TIF. First, sales taxes are mostly imposed at the state level. While counties and cities may have the ability to levy their own additional sales tax points, even where this power is present, the local share of sales tax is in most cases only a fraction of the total sales tax. Thus, if TIF is applied to sales taxes, the effect is the diversion of primarily state revenues for local government projects.65 Accordingly, many state legislatures are unwilling to lose both control and agency over significant revenue sources. Even where legislatures are willing to provide for sales TIF use, this use might be more restrictive than revenues generated through property taxes.
Secondly, sales TIF is far more volatile and risky than real property based TIF.66 Whereas sharp declines in real property in short periods are relatively rare events, similarly severe declines in sales tax receipts are less so. Combined with the ability of sales taxes to often generate significantly more revenue than property taxes, projections reliant on sales TIF are married to the whims of consumer spending, which itself is more subject to the pitfalls of recession, business failure, and business movement. For instance, when a retail business leaves a TIF zone, it is possible that the building they leased will lose some of its assessed value, but most of the value is in the land and improvements. However with sales TIF, if a business leaves without quick replacement, that departure can create a massive hole in TIF revenue and potentially wipe out otherwise solid incremental gains from other businesses in the zone.67
The relocation aspect is further focused from a TIF district maximization perspective. While the inclination of TIF authorities may be to capture as large of a geographic area as possible, such capture brings the risk that sales TIF revenues are hostage to business activities far away from the facility.68 Additionally, this may result in a TIF project that is simply predatory on impacts that have little to do with the facility or related project that TIF revenues are being diverted to fund, in turn being a drag on general revenues.
For these reasons, there are often more substantial restrictions placed on sales TIF. In some states, there will be claw-back provisions whereby the percentage of increment captured by TIF will decrease. The Illinois structure, for example, sees 80 percent of sales tax increment captured for the first $100,000, 60 percent for the next $400,000, and 40 percent above the $500,000 threshold.69 In other states, sales TIF may be limited to certain projects and state participation may be negotiated or represent a further procedural hurdle. Indiana70 and Kentucky71 have specifically used such structures in the sports facility context.
Applied to a sports venue, sales TIF has the potential to be a large source of revenue, especially if the TIF zone includes significant established retail. The relative impact of sales to property TIF depends on the existing and planned economic activities in the TIF zone, as well as the project specific objectives that TIF is intended to pay for. In some instances, the nature of local activity on its face lends itself towards sales TIF. For instance in Kentucky, bonds for the NBA sized downtown arena were intended to be roughly one-third repaid through TIF and the ratio of sales to property TIF generated has been in the range of ten to one.72 However, this is not to say that property TIF is incapable of being a primary source of facility finance—in Michigan for instance, sales TIF is not permitted and property TIF has been sufficient to fund hundreds of millions in public contributions to Little Caesars Arena.73
The third part of the revenue source story are PILOTs. PILOTs are payments made pursuant to an agreement by property owners who have been exempted from local property taxes. These payments are often securitized and offered as bonds. PILOTS are a common local economic development subsidy whereby a local government will agree to a PILOT that would have been far less than property taxes in order to attract or retain development activity.74 Much of the literature classifies PILOTs as a distinct but closely related form of subsidy relative to TIF—considering the overlap this paper views them as a worthwhile inclusion.
A total of eight states in the data set allow for PILOTs to be captured through TIF. In the TIF context, those PILOT payments are simply diverted in the same way as property taxes otherwise would be, either for a specific project or a designated TIF area. In Missouri for example, PILOT increment is calculated by establishing the same baseline for TIF as with regular property taxes.75 PILOTs above the baseline of what property taxes would have otherwise been become increment.76 Relative to the primary alternative of property TIF, PILOTs are less risky propositions as the amounts captured are known factors as opposed to projections decades out into uncertain futures.
Even where PILOTs are not explicitly permitted to be captured through TIF, PILOT arrangements share overlap. Such conceptual overlap is found in jurisdictions such as New York and the District of Columbia. In fact, PILOTs are viewed as an alternative path of less resistance to the same financing objective in instances where TIF may require further state approval and a PILOT would not, or where bonds issued under one form would count against the state constitutional debt limit and the other would not.
The most well-known instance of PILOTs in the facility context is the issue of billions in PILOT backed, municipally tax-exempt bonds by New York City for the new Yankee Stadium and Citi Field.77 However these deals were structured differently than a traditional PILOT and bear less resemblance to TIF. With Yankee Stadium for instance, the land was publicly owned and the PILOT came from stadium related revenues.78
However if more traditional PILOTs were committed to a facility project in the place of traditional property tax increment, the likely trade-off would be less gross yearly available incremental revenue for a more certain source of revenue. PILOT increment would not be directly subject to economic or neighborhood declines, but at the same time also not able to increase if the property gained assessed value beyond that predicted. Still, if TIF or revenue bonds are being issued, a predictable payment source may lead to significantly lower interest rates and a closing of the facial present value gap between the PILOT and the property assessment increment. TIF related bonds and other means of allocated captured increment will be discussed in more detail in subsequent sections.
B. Accompanying Purposes
1. Special assessment districts
TIF is one of several local economic development tools that have some sort of district-like geographic component. Typically known as special assessment districts, these districts allow for a property mill rate to be attached to properties within the district to pay for some defined improvement. Unlike TIF, special assessments are an additional direct tax burden.
Table 2. Jurisdictions Allowing Special AssessmentDistrict Overlap With TIF [See PDF]
Often associated with sewer, road, or other localized infrastructure, the rationale is that the additional tax mill will result in property appreciation for the properties paying the mill.79 In the commercial context, business improvement districts are frequently used for any number of projects within a concentrated retail area, including capital improvements, streetscape beautification, security, and marketing.80 These districts often allocate funds to many of the same purposes as TIF zones, but will be petitioned for and approved by the property owners.
Twenty-nine jurisdictions in the data set allow special assessment districts to overlap with TIF zones. Often these overlapping districts will have different boundaries, governing structures, and statutory restrictions on funding use. However, if well-coordinated, dual funding sources can be leveraged to have a complementary impact. For instance, the model of urban redevelopment in Dallas—the Uptown district—benefitted from overlaying both TIF and a business special assessment district.81
In the facility context, a special assessment district would most likely overlap with a commercial and retail strip within a facility TIF zone. Special assessments are unlikely to generate the gross return that TIF would, and most states have restrictions on property owners being assessed for the sole apparent benefit of a neighboring property owner (the stadium or arena) unless the assessment was on lands owned by the same parties as the facility and the assessment was a negotiated component of the facility deal. Thus special assessments would more likely be dedicated to improvements that would benefit all parcels within the district and those that would be most attractive to commercial enterprises—such as beautification, streetscape, and branding.
2. Eminent domain
Eminent domain often accompanies major redevelopment and local economic development projects. These projects can require swaths of contiguously assembled land to be realized and property owners on required lands either may not be willing to sell, or wish to extract a premium well beyond the market value of their land absent the redevelopment project. To solve this holdout problem, jurisdictions with the power of eminent domain will exercise their power to expropriate and assemble land. Accordingly, eminent domain can be one of the building blocks that allows for a viable TIF project in the first place.
Table 3. Jurisdictions allowing eminent domain to be used with TIF [See PDF]
Twenty-five jurisdictions in the data set allow for TIF to be combined with eminent domain. Previous works have noted parallels and complements between state TIF statutes and urban renewal acts.82 Conceptually, the overlap between eminent domain and TIF is often a finding of blight, and the need for public intervention to rectify the issue. In the wake of Kelo v. New London,83 more explicit leeway was provided to the combination of TIF and eminent domain. Kelo saw the Court affirm expropriation and transfer to another private owner for an economic development purpose with a public benefit.84 For public bodies looking to assemble land for large scale redevelopment projects, Kelo has been a boon.
The new scope granted by Kelo however, has been at least somewhat reined in by many states. Within two years of Kelo, forty-one states passed laws purported to restrict the use of eminent domain. Many of these post-Kelo legislative actions were similar in nature to those found in Kansas:85
K.S.A. 26-501a. Eminent domain; limited to public use; transfer to private entity prohibited; exception.
On and after July 1, 2007: (a) Private property shall not be taken by eminent domain except for public use and private property shall not be taken without just compensation. (b) The taking of private property by eminent domain for the purpose of selling, leasing or otherwise transferring such property to any private entity is prohibited except as provided in K.S.A. 2009 Supp. 26–501b, and amendments thereto.
Others actions were even more to the point, such as the successful 2006 ballot measure amending the Florida Constitution:86
SECTION 6. Eminent Domain.—
Private property taken by eminent domain pursuant to a petition to initiate condemnation proceedings file donor after January 2, 2007, may not be conveyed to a natural person or private entity except as provided by general law passed by a three-fifths vote of the membership of each house of the Legislature.
However, Byrne’s 2016 analysis found only twenty states that had functionally restrictive eminent domain provisions as qualified by two conditions: the barring of economic development grounds for eminent domain, and the absence of significant exemptions from this prohibition for instances of blight.87 Using this test, the Kansas statute did not qualify, but the Florida amendment did. Yet even where there were functionally restrictive eminent domain provisions, this was not necessarily indicative of lessened eminent domain use—the two states with the most instances of eminent domain use (Florida and Pennsylvania) fell in the functionally restrictive category.88 These outcomes can be seen through the tension of strong post-Kelo support for legislative action to preclude eminent domain for private economic development purposes, and the propensity for lawmakers at the state and local level to see policy value in such takings.
Applied to the facility TIF context, there are several practical implications based on whether a state has a functionally restrictive eminent domain framework or not. In a functionally restricted eminent domain jurisdiction, the facility itself is more likely to be publicly owned as sufficient land for the facility will be that much harder to assemble. The facility parcels will also not be as useful for TIF on immediately ancillary development as publicly owned property will be tax exempt and not come with a PILOT payment. Sales TIF on these parcels would be possible assuming this facility was in a sales TIF permitting state. While property TIF could still be effective on parcels in blocks surrounding the facility, again, assembling these blocks for a private purpose that could maximize assessed values is more challenging. Thus, reaching the full assessment potential is made more difficult and the time horizon required to assemble land to reach a higher assessment potential (with more increment created) is lengthened.
C. Type of TIF District Available
There are two primary types of TIF districts available: area wide and project specific. 30 jurisdictions in the data set allow area wide TIF and all permit site specific TIF. The former is the more traditional concept and entails designating a geographic area of between several blocks and several miles. Within this geography, increment will be captured and assigned to projects in the same area. The project TIF alternative is simply the limiting of the district geography to a single parcel, or a single site of several parcels. A project specific TIF zone is generally less ambitious in terms of public improvements and less fiscally risky in that a more limited number of parcels will have increment diverted out of general revenues.
Project specific TIF is likely to entail a negotiated agreement with a single developer, whereby increment generated from the project will be reinvested in the project or paid back to the developer as a subsidy. Alternatively, a jurisdiction may create a project TIF zone for a large development that would otherwise have been constructed anyway, knowing that the project will create substantial increment, and then funnelling that increment to other nearby projects.89 The benefit of this latter structure is that money can be diverted to a project through TIF that may otherwise struggle to pass via a general appropriation from democratically accountable representatives.
Table 4. Jurisdictions Allowing Area Wide and Project Specific TIF [See PDF]
There is potential for both area wide and project specific TIF to be used in a facility-related project. The form of TIF district used will depend on the broader deal negotiated between the club controlling parties and the involved local and state governments, as well as state law more broadly. For instance, functional restrictions on eminent domain and private use may prevent the facility project from being privately owned and thus within a TIF zone, meaning that increment would have to be captured from an area TIF district. An area TIF district could likewise be attractive to divert more increment to the facility project without a direct appropriation from the general fund. Alternatively, project specific TIF could be used as a policy tool to throw-in a subsidy that is limited to the project parcels, with the intention of closing a deal-making bargaining gap, but stopping short of capturing neighboring activity.
D. TIF District Approval Authority
There are generally two distinct aspects to TIF approval: district creation and approval of what projects TIF funds may be directed to within a TIF district. With the former, there are four primary potential governmental approval authorities: municipalities, counties, redevelopment authorities, and state governments. All jurisdictions in the data set allow municipalities to approve TIF districts, while counties are approving authorities in twenty-four states. A further six states allow for redevelopment or other similar public authorities to approve TIF districts. Few states however are themselves TIF district approving authorities—instead, state legislatures enable local bodies to approve TIF.
Table 5. TIF Creation Authorities by Jurisdiction [See PDF]
The distribution of TIF creation authorities reflects TIF’s status as an instrument of local economic development. The presence of redevelopment authority TIF indicates that local governments have the option to shelter both financial and political risk within a purpose built public corporation. These redevelopment and similar authorities are generally entrusted with facilitating local economic development with significant autonomy relative to keeping functions within the bureaucracy of local governments. Redevelopment authorities also protect local governments from transactions gone wrong as TIF obligations are generally limited to the assets of that authority.
The relative role of municipalities and counties in TIF district creation may also depend on the taxation powers respectively enumerated to each government by the state legislature, as well as their comparative political priorities. In some states, a county may have more capacity to generate increment and in others, relatively little. Likewise, the political coalitions in a county may lead to certain projects being more or less feasible than they would be in a municipality—a county may have greater fiscal capacity to direct increment, but a municipality may have more political will to direct increment to a particular project within its boundaries as it will be closer to the perceived benefits.
In other instances, state legislation may allow for counties or cities to participate in one another’s TIF projects, providing an impetus for one jurisdiction (typically the city) to make the project attractive to the other with the objective of capturing the increment from both jurisdictions. In Texas, for example, counties can choose to participate and allocate their increment to municipally created TIF districts, which allows counties to have strong effective policy influence.90
This dance of fiscal capacity and political will is often operationalized in the stadium deal context more generally—depending on the state legislative framework and the corresponding ability and will to pay, a facility may be primarily funded by a country, a city, or a partnership of both.91 The same dynamics can be viewed for TIF related facility projects, although preliminary data on these projects finds a greater trend toward municipally centered projects where there may be overlaying county participation. There are also instances of redevelopment authority TIF districts being used in facility development.
E. TIF District Project Authority
Once a TIF district is established, authority then shifts to the bodies entrusted to spend captured increment on projects. Responsibility for project approval and allocation addresses the control, autonomy, and ongoing political oversight of a TIF district. There are five primary potential governmental or semi-governmental options through which state TIF statutes delegate the power to approve TIF projects: municipalities, counties, states, redevelopment authorities, and TIF commissions. The category of TIF commissions (not previously discussed), generally consists of a board created alongside the TIF district, which is then delegated the administrative and operational functions from the point of creation.
Twenty-seven jurisdictions allow municipalities to control TIF projects, while counties have the same broad powers in eighteen states. Unlike with TIF district creation, six states permit the state to retain TIF project authority. Meanwhile, twelve states provide redevelopment and similar authorities the power to oversee TIF project selection and allocation. Finally, six states allow TIF commissions to determine how increment is directed.
Table 6. TIF Project Authorities by Jurisdiction [See PDF]
F. Requirements for a TIF District
States can have any number of pre-requisites for a TIF district. This paper evaluates five of the more common requirements: blight, but-for, public hearings, feasibility or property condition analysis, and financial or cost-benefit analysis.
Table 7. Requirements for a TIF District by Jurisdiction [See PDF]
1. Blight
Blight is at the conceptual core of TIF’s redevelopment roots. Blight stems from the concept of urban blight or decay, broadly speaking, a process entailing a general and visible neglect of the physical environment. This visible component is often accompanied by quantifiable measures such as resident and firm departures, unemployment, crime rates, and tax base deterioration. In many respects, the need for the presence of blight is what separates a TIF framework from being an instrument of redevelopment and merely a general development subsidy.
Twenty-one states in the data set have some sort of blight requirement for TIF designations. Most commonly, blight in TIF statutes includes the designation of the area as an economic, social, or public health liability. More specifically, a blight definition may require one or some combination of the following to be present: deteriorating or obsolete structures, unsafe conditions, vacant lots, assessment delinquency exceeding land value, environmental contamination, and inadequate infrastructure.
Permissive definitions allow blight to be satisfied by meeting one of a laundry list of blight qualifiers in the subjective and qualitative opinion of the TIF creation authority. The definition of blight in the Tennessee Code is a strong example:92
Blighted areas are areas, including slum areas, with buildings or improvements that, by reason of dilapidation, obsolescence, overcrowding, lack of ventilation, light and sanitary facilities, deleterious land use, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community. Welfare of the community does not include solely a loss of property value to surrounding properties, nor does it include the need for increased tax revenues. Under no circumstance shall land used predominantly in the production of agriculture, as defined by § 1-3-105, be considered a blighted area.
Although farmland is explicitly exempted, and more than property value loss is required, it would not be difficult for any TIF creation authority in a non-rural area to meet one of the conditions, and thus find blight. A particularly creative TIF authority could even extend a TIF district in an otherwise not blighted area, to include parcels that would meet the blight definition, thus making the TIF district itself “blighted.”
Other states have somewhat less permissive definitions that require multiple elements to be met for a blight designation. This list of elements is typically accompanied by a chapeau clause. Exemplifying this structure, Florida requires two of fifteen possible conditions:93
(8) “Blighted area” means an area in which there are a substantial number of deteriorated or deteriorating structures; in which conditions, as indicated by government-maintained statistics or other studies, endanger life or property or are leading to economic distress; and in which two or more of the following factors are present:
(a) Predominance of defective or inadequate street layout, parking facilities, roadways, bridges, or public transportation facilities.
(b) Aggregate assessed values of real property in the area for ad valorem tax purposes have failed to show any appreciable increase over the 5 years prior to the finding of such conditions.
(c) Faulty lot layout in relation to size, adequacy, accessibility, or usefulness.
(d) Unsanitary or unsafe conditions.
(e) Deterioration of site or other improvements.
(f) Inadequate and outdated building density patterns.
(g) Falling lease rates per square foot of office, commercial, or industrial space compared to the remainder of the county or municipality.
(h) Tax or special assessment delinquency exceeding the fair value of the land.
(i) Residential and commercial vacancy rates higher in the area than in the remainder of the county or municipality.
(j) Incidence of crime in the area higher than in the remainder of the county or municipality.
(k) Fire and emergency medical service calls to the area proportionately higher than in the remainder of the county or municipality.
(l) A greater number of violations of the Florida Building Code in the area than the number of violations recorded in the remainder of the county or municipality.
(m) Diversity of ownership or defective or unusual conditions of title which prevent the free alienability of land within the deteriorated or hazardous area.
(n) Governmentally owned property with adverse environmental conditions caused by a public or private entity.
(o) A substantial number or percentage of properties damaged by sinkhole activity which have not been adequately repaired or stabilized.
Although somewhat less subjective than the Tennessee-style definition, again there should be few problems in manufacturing a blight finding if desired.
The Florida definition is also useful for exemplifying the entry level partial quantitative blight test. Seven states in the data set have a form of quantitative blight finding, meaning that some mathematical calculation and objective threshold is required for at least an aspect of a blight provision. The five quantitative Florida blight conditions (b, g, h, i, and l) are fairly representative of basic quantitative blight provisions in other states.
Illinois has a similar structure to Florida, but its quantitative condition has more depth:94
74.4 ILCS Illinois Municipal Code.
(F) The total equalized assessed value of the proposed redevelopment project area has declined for 3 of the last 5 calendar years prior to the year in which the redevelopment project area is designated or is increasing at an annual rate that is less than the balance of the municipality for 3 of the last 5 calendar years for which information is available or is increasing at an annual rate that is less than the Consumer Price Index for All Urban Consumers published by the United States Department of Labor or successor agency for 3 of the last 5 calendar years prior to the year in which the redevelopment project area is designated.
As seen in the Florida conditions,95 quantitative methods of determination are not necessarily complicated. Even where there are more complex tests (such as in Illinois), the statute allows these hurdles to be avoided through alternative conditions. In fact, many projects passing the purely subjective blight definitions (such as Tennessee’s) may easily meet basic (and more advanced) quantitative measures as well. However, even basic quantitative means that are independently verifiable and transparent, can provide a check on TIF over-proliferation.
The most restrictive blight test is likely found in Utah. The Utah statute has both a restrictive and often quantitatively defined conception of blight, and a requirement for a “blight study.” Blight in Utah is defined as:96
Conditions on board determination of blight—conditions of blight caused by the participant.
(1) A board may not make a finding of blight in a resolution under Subsection 17C-2-102(1)(a)(ii)(B) unless the board finds that:
(a) (i) the proposed project area consists predominantly of nongreenfield parcels;
(ii) the proposed project area is currently zoned for urban purposes and generally served by utilities;
(iii) at least 50% of the parcels within the proposed project area contain nonagricultural or nonaccessory buildings or improvements used or intended for residential, commercial, industrial, or other urban purposes, or any combination of those uses;
(iv) the present condition or use of the proposed project area substantially impairs the sound growth of the municipality, retards the provision of housing accommodations, or constitutes an economic liability or is detrimental to the public health, safety, or welfare, as shown by the existence within the proposed project area of at least four of the following factors:
(A) one of the following, although sometimes interspersed with well maintained buildings and infrastructure:
(I) substantial physical dilapidation, deterioration, or defective construction of buildings or infrastructure; or
(II) significant noncompliance with current building code, safety code, health code, or fire code requirements or local ordinances;
(B) unsanitary or unsafe conditions in the proposed project area that threaten the health, safety, or welfare of the community;
(C) environmental hazards, as defined in state or federal law, that require remediation as a condition for current or future use and development;
(D) excessive vacancy, abandoned buildings, or vacant lots within an area zoned for urban use and served by utilities;
(E) abandoned or outdated facilities that pose a threat to public health, safety, or welfare;
(F) criminal activity in the project area, higher than that of comparable nonblighted areas in the municipality or county; and
(G) defective or unusual conditions of title rendering the title nonmarketable; and
(H) at least 50% of the privately-owned parcels within the proposed project area are affected by at least one of the factors, but not necessarily the same factor, listed in Subsection (1)(a)(iv); and
(I) the affected parcels comprise at least 66% of the privately-owned acreage of the proposed project area; or
(b) the proposed project area includes some or all of a superfund site, inactive industrial site, or inactive airport site.
(2) No single parcel comprising 10% or more of the acreage of the proposed project area may be counted as satisfying Subsection (1)(a)(iii) or (iv) unless at least 50% of the area of that parcel is occupied by buildings or improvements.
(3) (a) [F]or purposes of Subsection (1), if a participant involved in the project area development has caused a condition listed in Subsection (1)(a)(iv) within the proposed project area, that condition may not be used in the determination of blight.
Yet the satisfaction of the blight definition is only one aspect that the blight study must satisfy:97
(1) Each blight study required under Subsection 17C-2-102(1)(a)(i)(A) shall:
(a) undertake a parcel by parcel survey of the survey area;
(b) provide data so the board and taxing entity committee may determine:
(i) whether the conditions described in Subsection 17C-2-303(1):
(A) exist in part or all of the survey area; and
(B) qualify an area within the survey area as a project area; and
(ii) whether the survey area contains all or part of a superfund site, an inactive industrial site, or inactive airport site;
(c) include a written report setting forth:
(i) the conclusions reached;
(ii) any recommended area within the survey area qualifying as a project area; and
(iii) any other information requested by the agency to determine whether an urban renewal project area is feasible; and
(d) be completed within one year after the adoption of the survey area resolution.
The Utah blight study requirements close much of the gap for expansionism. Yet, these more onerous requirements create a transaction cost that may impact the feasibility in the first place. Beyond ensuring that blight is truly present, high transaction cost hurdles may be designed in part to dissuade projects that cannot generate sufficient increment for the project financial cost-benefit to make sense after start-up expenses. It is also worth noting that many of the reporting requirements found in the Utah blight sections may be to a certain extent found in financial or cost-benefit analysis provisions in other state TIF frameworks.
For an urban stadium, arena, or ancillary real estate project, blight is unlikely to be a major obstacle in most states. Even where there are more restrictive quantitative blight conditions, the size of the project will mute the impact of transaction costs, and most projects are likely to satisfy blight anyway. For suburban facilities however, a blight finding may be harder to substantiate.
2. But-for
After blight, but-for is the second primary traditional TIF requirement. In the TIF context, but-for typically means that absent TIF, real estate development would not occur, would not occur as quickly, or would bring less fiscal benefit to the implementing jurisdiction. Despite its conceptual role alongside blight, only 14 jurisdictions in the data set have direct but-for requirements. However, even where there is no state requirement, local authorities can add one. In Texas for instance, there is no state provision, but the City of Dallas imposed its own.98 Further (discussed later), some other states have requirements for cost-benefit or fiscal impact studies that include many elements of but-for.
Depending on the jurisdiction, but-for findings can be made solely by the TIF creation authority, or based upon a project proponent signing a contract affirming that but-for the TIF subsidy, they would not undertake the project or modify the project to the extent that the costs of the change (to the taxing jurisdiction) would exceed the TIF subsidy.99 In either event, but-for provisions are generally framed in cost-benefit terms through comparing alternatives where the subsidy is not present. For instance, the District of Columbia’s but-for requirement, determined by the District’s Chief Financial Officer, is set out as follows:100
(2) Whether the project will likely result in a net increase in the taxes payable to the District, taking into consideration income taxes, franchise taxes, real property taxes, without regard to the real property tax increment revenues to be applied to payment of the TIF bonds, sales taxes, without regard to the sales tax increment revenues to be applied to payment of the TIF bonds, parking taxes, use taxes, and other taxes, over the amount that would have been payable to the District in the absence of the project;
Minnesota’s provision incorporates both the “development would not have happened” and “fiscal benefits” aspects, but delegates determinations to municipalities:101
(2) that, in the opinion of the municipality:
(i) the proposed development or redevelopment would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future; and
(ii) the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the district permitted by the plan. . . .
This local subjectivity problem has been mitigated against in Wisconsin, which requires a local TIF creation authority’s finding to be studied by a Joint Review Board,102 composing of one member from each taxing district—typically a city, county, and school district.103 While the Wisconsin statute is otherwise permissive in blight and but-for, the review board is an additional check. The review board must base its “decision to approve or deny a proposal on the following criteria”:104
a. Whether the development expected in the tax incremental district would occur without the use of tax incremental financing.
b. Whether the economic benefits of the tax incremental district, as measured by increased employment, business and personal income and property value, are insufficient to compensate for the cost of the improvements.
c. Whether the benefits of the proposal outweigh the anticipated tax increments to be paid by the owners of property in the overlying taxing districts.
If the review board denies a proposal, the board is also required to provide written explanations as to why a criteria was not met, providing transparency and future predictability to the process.105
In the facility context, but-for has far more potential to pose a substantial obstacle to TIF use than blight. While jurisdictions with a but-for test left to the subjective determination of a local government eager to use TIF to close a facility related deal are not likely to see but-for represent a major hurdle, those with more restrictive tests may. Specifically, jurisdictions that require detailed financial analyses undertaken by independent actors may return findings – again consistent with the literature106—that facility related projects do not have net fiscal or economic benefits. However, in practice, even where there are but-for tests requiring financial impact calculations administered by independent experts, the TIF deal may get through—this was the case in Washington DC with the Capital One Arena renovation.
3. Public hearings
A common element of land use approval in many states, a public hearing requirement in theory provides two things to a potential TIF project: a procedural brake and an opportunity to hold decision makers accountable. Some twenty-six jurisdictions in the data set require a public hearing prior to approving a TIF zone. Public hearing requirements generally require notice being sent thirty to sixty days prior to the hearing to affected property holders and any overlaying taxing jurisdictions. In some places, such as Portland, Oregon, notices will be sent to all property holders in the city.107 Notices usually contain a description of the TIF plan and where the entire plan may be viewed, the time, place, and location of the hearing, as well as a representation that affected parties may be heard. A TIF project public hearing would likely be one of several public hearings in relation to a major facility project. While the hearing can slow down and bring a measure of transparency to a process, a hearing alone is not likely to be a major obstacle where political will is present.
4. Additional analyses required
Nineteen jurisdictions in the data set require some form of feasibility or property condition analysis prior to TIF district creation or project approval. A non-binding feasibility study (alternatively dubbed as a financial or cost-benefit analysis) can be viewed as a softer form of but-for and a property condition analysis as a muted variety of a blight test; while many points of analysis will overlap, these studies are intended to inform decision makers as opposed to forcing their hands. However, these studies may in some jurisdictions effectively serve to satisfy state statutory but-for or blight tests.
As with many but-for requirements, feasibility study provisions will often be vague. For instance, Oregon outlines its feasibility and financial analysis requirements as follows:108
(3) An urban renewal plan shall be accompanied by a report which shall contain:
(g) A financial analysis of the plan with sufficient information to determine feasibility;
(h) A fiscal impact statement that estimates the impact of the tax increment financing, both until and after the indebtedness is repaid, upon all entities levying taxes upon property in the urban renewal area; and
(i) A relocation report which shall include:
(A) An analysis of existing residents or businesses required to relocate permanently or temporarily as a result of agency actions under ORS 457.170;
(B) A description of the methods to be used for the temporary or permanent relocation of persons living in, and businesses situated in, the urban renewal area in accordance with ORS 35.500 to 35.530; and
(C) An enumeration, by cost range, of the existing housing units in the urban renewal areas of the plan to be destroyed or altered and new units to be added.
Other jurisdictions, such as Minnesota, require financial effects of TIF to be calculated for all potentially fiscally impacted jurisdictions:109
469.175 Establishing, Changing Plan, Annual Accounts.
(a) A tax increment financing plan shall contain:
(6) statements of the authority’s alternate estimates of the impact of tax increment financing on the net tax capacities of all taxing jurisdictions in which the tax increment financing district is located in whole or in part. For purposes of one statement, the authority shall assume that the estimated captured net tax capacity would be available to the taxing jurisdictions without creation of the district, and for purposes of the second statement, the authority shall assume that none of the estimated captured net tax capacity would be available to the taxing jurisdictions without creation of the district or subdistrict;
Beyond vague or incomplete statutory requirements however, feasibility and cost-benefit studies, especially those on a project specific basis, will often include similar elements to those undertaken by prospective private sector developers and financial institutions considering lending to developers. They may begin with defining the local marketplace in terms of land and construction costs, location, impact of land use regulations, rents, and vacancy rates.110 From here, a cash flow projection can be developed to determine net present value and internal rates of return.111 Then the cost of development can be estimated and compared to the developer’s sources of capital to ascertain a gap.112 This gap, and the evaluation or proof of this gap, is the core of many TIF feasibility studies.113 Once this but-for like feasibility is satisfied, it may be complemented by evaluation of TIF as the appropriate means through which to close a development gap. This will be calculated through prediction of TIF district increment available, the value added by the project, and the increment available after project cost and/or debt coverage.
Property condition analysis typically entails tedious low level data collection about the parcels in a proposed TIF district or project. These data points can include the parcel number (or “PID”), street address, whether the parcel is improved or vacant, the property area, the improvements coverage area, the coverage ratio, the number of structures on the property, the replacement cost of structures on the property, and the survey method. If need be, this assessment can be the basis for a blight finding.
Major facility projects are almost certain to already include a number of public and private feasibility, cost-benefit, financial, and property condition analyses, both for the entire project and for any specific TIF component. Thus these requirements are not particularly burdensome. Where these requirements might have more of an impact however is in a transparency function if these reports are made public. As with the many facility related economic feasibility studies that have been placed into serious question, manipulated TIF studies can serve as a platform for public critique and second guessing.
G. Forms of Financing and Spending
There are three primary forms of TIF financing: general obligation bonds, revenue bonds, and “pay as you go.” Twenty-two jurisdictions in the data set allow for general obligation bonds to be issued based on future TIF revenues, while 29 permit the issuance of revenue or TIF bonds, and 27 have pay as you go schemes.
Table 8. Forms of Financing [See PDF]
1. Debt issues—general obligation
General obligation bonds are at the same time the riskiest, highest leverage, and potentially most cost efficient TIF instrument. Instead of being limited to revenues produced by TIF, a general obligation bond is backed by the full credit of the issuer. This means that if TIF revenues are insufficient to service the bonds, the general fund of the issuing government is responsible to make up the deficit. Where TIF revenues may be volatile or predictions unreliable, these general obligations may constitute a substantial risk—if TIF falls short, it will likely be basic municipal functions that bear the cost. In jurisdictions with strong debt ratings, the potentially substantial risk of backing bonds with the general fund can result in a lower interest rate, and thus lower cost of borrowing. However, where local government bonds are closer to “junk” status, a better interest rate may well be had through cordoning off TIF proceeds into revenue bonds. In many places however, general obligation bonds require voter approval, which can serve as a substantial political brake.
2. Debt issues—revenue bonds
TIF, PILOT, or revenue bonds are the primary debt alternative to general obligation bonds. Revenue bonds are issued in anticipation of being paid off by a particular income source, in this instance TIF. A primary benefit of revenue bonds is that the issuing jurisdiction’s risk is limited to the TIF district. However, as there is no further backing from the general fund, the cost of borrowing is likely to be higher unless if the issuer has a poor credit rating. Further, even though the general fund is not formally responsible to fill an underperformance gap, many issuers will either feel political or policy pressure to make up any gap, as the jurisdiction will not want future revenue bonds to have junk status. Finally, revenue bonds have the advantage in some states as not counting against state constitutional or statutory debt ceilings.
In addition to a federal tax exemption on interest payments, TIF related bond issues more generally have the benefit of allowing TIF funded improvements to be constructed up front. If the theory is accepted that TIF improvements should spur further incremental growth beyond their financial cost, then the more quickly these improvements can be constructed, the better. However there are many instances where instead of being a self-financing proposition, TIF is a deadweight loss subsidy. The key calculation then is whether the revenue gains that can be generated by financing improvements upfront exceeds the cost of borrowing and the risk of underperformance.114
3. Pay as you go
Where jurisdictions find in the negative for the previous question, or are more risk adverse, or are limited by statute or policy, the primary alternative is pay as you go. In most cases pay as you go entails a TIF district being approved, followed by the creation of a prioritized list of TIF improvements. As increment is generated for the TIF fund, that fund will be used to allocate money to projects in the order of priority. While pay as you go eliminates the previously discussed risks associated with both general obligation and revenue bonds, the generation of increment is likely to be back loaded in the later years of a TIF district, meaning that improvements intended to spur further growth may not arrive for years. In many instances, the lost increment through delayed improvements may well exceed the borrowing cost up front.
To solve this potential loss problem, some jurisdictions allow for developer reimbursement. Here a private developer will pay for improvements upfront with the promise of being repaid from the TIF fund as increment is generated. Usually the developer’s costs will be included in their larger project loans. Thus the above mentioned borrowing risks associated with general obligation and revenue bonds are shifted to the developer. However with developer reimbursement the issue becomes whether TIF was even necessary in the first place. If the developer had the means to afford the project then the concept of but-for may not be satisfied and the TIF reimbursement is simply a subsidy to a project that would have gone ahead in the much the same way absent the subsidy.
In the facility context any of these payment and borrowing forms can exist depending on the statutory bounds, available debt limits, tolerance for risk, and deal-specific bargaining outcomes. The developer reimbursement form of pay as you go has been seen in the ambitious Victory Park real estate development surrounding the Dallas arena,115 while revenue TIF bonds have more recently made up the overwhelming contribution to Detroit’s Little Caesar’sArena.116 General obligation bonds intended to be repaid through TIF were central to the failed Boston Olympic Stadium plan.117
H. Allowable Public Improvements
TIF statutes generally specify what increment proceeds (through either debt issues or pay as you go) can be spent on. This project collected data on six categories of publicly owned improvements particularly relevant to the facility context: public infrastructure, public beautification, land acquisition, site preparation, parking structures, and soft development costs.
Table 9. Allowable Public Improvements by Jurisdiction [See PDF]
1. Public infrastructure
Public infrastructure refers to any publicly owned infrastructure improvement that is not primarily used to visually improve the public realm, although there is inevitable overlap. Parking is also under its own heading. Relevant to the facility context, this category includes works such as roads, sewers, utilities, bridges, lighting, sidewalks, and light rail. Most often these infrastructure elements will be found in publicly owned rights of way. More generally, this category of infrastructure investments represent the building blocks of a new neighborhood—a previously blighted area that sees a venue development will require major infrastructure repair and replacement. Every jurisdiction in the data set allows for TIF to be allocated to this broadly conceived form of public infrastructure.
2. Public beautification
All jurisdictions in the data set also allow for public beautification to be funded by TIF. Public beautification includes infrastructure intended to improve the public realm and make an area more attractive to multi-modal traffic. This can include streetscape improvements (sidewalk widening, public furniture, indented parking, decorative paving, and banners), trees and landscaping, parks, pathways, and roadway descriptions. These improvements can in theory help make an otherwise bland and unappealing area into a destination in which people will want to spend time and money. For a facility project intended to transform a neighborhood, these visual elements are especially crucial.
3. Parking garages
The importance of parking to venues makes it worth its own improvement category. All TIF using jurisdictions in the data set allow for TIF to be directed to public parking structure costs. While significant event parking is generally required for major professional sports facilities, outside of event periods, surface lots often sit empty. Depending on the volume of events, parking structures may not be financially viable, but allow parking spaces to be stacked and free surface lots for construction. In turn, parking deserts can gain more vibrancy in non-event periods and a more cohesive neighborhood can emerge. A particularly well-conceived parking garage can even include retail uses at ground level to facilitate a continuously active streetscape. Thus, a TIF investment in public parking structures can fill a valuable gap between what the market can support and the best outcome for catalyzing neighborhood development—the more quickly surface lots can be built on, the more quickly activity outside of event periods (and increment) can be generated.
4. Land acquisition
As discussed in the eminent domain section, land assembly can be a substantial challenge for major facility and real estate development projects. TIF funds can be used to buy parcels—whether through negotiated purchases or eminent domain—to complete assembly sufficient for the envisioned project. Since publicly owned lands are generally not subject to property taxes, the point of assembly is either for a publicly owned facility, or to transfer assembled parcels to a private developer for development to maximize future increment. Thirty-one jurisdictions with TIF statutes in the data set permit TIF funds to be used for land acquisition by public authorities.
5. Site preparation
Thirty-one jurisdictions in the data set also allow for TIF funds to be allocated towards some or all site preparation costs. Site preparation can include environmental remediation, demolition, utility relocation, excavation, land clearing, and testing. Many brownfield sites will require substantial site preparation investments to make them development ready and competitive with green fields. For developers weighing returns on a range of prospective investments, public contributions to site preparation can both tip the financial return scales to an urban site, as well as expedite projects with an unclear timeframe. For a facility development, an already prepared site can bring quicker development.
6. Soft/consultant costs
Almost all projects and districts will have a variety of soft costs attached. These costs are most commonly incurred for external planning, engineering, architecture, real estate, parking, and environmental consultants, as well as TIF administration. Twenty-eight jurisdictions in the data set permit at least some public soft expenses to be covered by TIF funds.
I. Allowable Private Improvements
Some jurisdictions allow for TIF monies to be allocated for private infrastructure related improvements. However while almost all TIF statutes in the data set permit TIF diversion to fund public improvements, a minority of jurisdictions allow the same for the seven categories of private improvement costs covered in this project: new construction, renovation or rehabilitative construction, soft/consultant costs, parking structures, beautification, privately owned infrastructure on private rights of way, and site preparation. Note that private land acquisition is not included in the category list as my review did not identify any jurisdictions in which this form of TIF allocation is permitted.
Table 10. Allowable Private Improvement Costs by Jurisdiction [See PDF]
1. New construction
A total of twelve states in the data set authorize TIF increment to be dedicated to new private construction projects. This is a direct subsidy of new private construction, but implicitly with an eye to make financially feasible projects that otherwise would not be. This category of provision is the most viable path to directly subsidizing a privately owned facility development.
2. Renovation and rehabilitative construction
Fifteen states in the data set will allow TIF to be directed to renovation and rehabilitation of already existing structures. As many modern and urban facility related projects attempt to incorporate historical structures into their design (notable examples include Baltimore’s Camden Yards and San Diego’s Petco Park), where this form of TIF subsidy is permitted, it can be quite useful in the facility context.
3. Soft/consulting costs
In many cases private development parties will experience somewhat duplicative soft and consulting costs to those incurred by public bodies. Fifteen jurisdictions in this paper’s data set allow for soft costs to be reimbursed to private parties. In jurisdictions where these costs cannot be covered by TIF funds for private parties, there is an incentive for the public sector to formally take on as much as possible to allow for more permissive reimbursement.
4. Parking structures
Fourteen jurisdictions allow for increment to fund privately owned parking structures. Where these structures cannot be both privately owned and funded by TIF, there are two likely effects: surface lots will remain longer until real estate values and development demand become sufficiently lucrative for construction, and public authorities will feel more pressure to construct publicly owned structures if the option of closing a cost gap for a private structure through TIF is made more difficult.
5. Beautification
Fourteen jurisdictions in the data set allow for private beautification projects to be funded through TIF. Such projects will share similar characteristics to public projects, although these will be on private rights of way. A likely allocation for these funds will be for landscaping and street interfacing required by the local government development approval.
6. Private infrastructure
Although sharing some similarities with the broadly conceived public infrastructure category, private infrastructure focuses more on connections to, and integration with, municipal infrastructure from private property—utilities, roads, lighting, and pedestrian access. Thirteen jurisdictions in the data set allow for these types of private infrastructure costs to be covered through TIF funds. Again, subsidizing these improvements goes to closing a prospective financial feasibility gap.
7. Site preparation
Much the same applies here as with the discussion of public site improvement as well as the discussion of financial gap closure. The primary difference here is that instead of preparing publicly owned land, or acquiring and preparing land for development and then transferring it to the private sector, the TIF jurisdiction could directly fund preparation of privately held land. While in theory the TIF jurisdiction intending on assisting a private party can get around a statutory bar through expropriation and shell corporations, the explicit power for a direct subsidy provides more planning flexibility. Sixteen jurisdictions in the data set allow for TIF to fund site preparation on privately held land.
J. Land use
There are three primary land use categories that state TIF statutes generally permit TIF districts to be created in that are of interest to the stadium context: mixed, commercial, and residential. The overwhelming trend in facility ancillary development has been towards mixed-use development, but within that development there can be projects that are exclusively residential or commercial. In this project’s data set, thirty jurisdictions allow for TIF use in mixed-use zones, thirty-two in commercial zones, and twenty-eight in residential zones.
Table 11. Permissible Land Use Zoning for TIF Districts [See PDF]
K. Length Limitations
There is a wide range of TIF district lengths across the jurisdictions in the data set. Where maximum lengths are defined, the range is between five and fifty years. However ten jurisdictions do not have specific limits on TIF district length, although some outline that length will be specific to a TIF agreement or plan (DC, Tennessee, and Utah), or that the TIF district terminates once costs are fully paid (Florida). At least four jurisdictions allow for extensions that can significantly lengthen lifespans (three to four times) and—as increment generation will typically be back loaded—increase the increment captured. The ability for TIF districts to be modified or extended can also be seen as some retention of political control by authorizing bodies, especially where the TIF authorizing body differs from the governing body. This power is again reinforced by the later years of a TIF district likely to be more valuable in gross and present value increment terms.
Table 12. TIF District Lifespan by Jurisdiction [See PDF]
The policy balance in TIF district length is between enough time to create sufficient increment to pay for planned improvements and to prevent an overly drawn-out TIF district from failing to deliver upon longer term net benefit to general revenues and thus being predatory on the general fund. While a jurisdiction may in theory wish to diligently guard against the possibility of a predatory TIF district, this tendency will in many instances be weighed against ensuring there will be sufficient increment to pay back TIF debt and to guard against volatility. Thus, beyond the retention of political control, this ability to alter district length to potentially create more increment for debt service is another reason for variable TIF sunsets.
VIII. Discussion and Conclusion
This overview of state level TIF statute components reveals certain areas where there is broad consensus between statutes, and many more variables in which divergence prevails. When defining a “very strong” consensus as the presence of a variable in thirty or more jurisdictions in the data set, “strong” as twenty-five to twenty-nine, and “moderate” as twenty to twenty-four, there are eleven variables with a very strong consensus, eight with a strong consensus, and only three in the moderate category.
Thus, the lowest common denominator “very strong” consensus TIF statute will allow for municipalities to create TIF districts and select projects to allocate increment to, the increment will be limited to property taxes and both site specific and area wide TIF projects can be pursued. However, TIF funds can exclusively be used on public improvements, specifically infrastructure, beautification, parking structures, land acquisition, and site preparation. Finally, the very strong consensus statute allows TIF to be used mixed-use and commercial zones. If strong consensus variables are added-in, then the statute would also require public hearings, allow counties to create TIF districts, as well as permit the use of eminent domain, spending on soft costs, revenue bonds, and pay-as-you-go structures, the overlay of special assessments, and residential zoning.
At the same time, there are important components that are absent from most jurisdictions—namely the funding of private improvements, but-for and quantitative blight tests, financial or feasibility studies, and the inclusion of sales taxes or PILOTs. These exclusions trend towards making the creation of TIF districts more procedurally permissive, but restricting both the money available to spend and what it can be spent on.
For the venue context there are several key takeaways. First, the absence of sales TIF availability in most jurisdictions closes off the largest source of potential revenue, but also the most volatile form of TIF. Second, the general absence of substantive restrictions on TIF creation means that if proponents and political actors want to use TIF in the context of a venue deal, then they will likely have the option to do so. Third and finally, the limitation of TIF spending to public improvements means that TIF will either be a subsidy to address public infrastructure needs for a facility with perhaps an overlaying special assessment for certain private infrastructure, or that the venue will need to be publicly owned to directly use TIF. The latter outcome, like tax-exempt bonds, is something of a perverse incentive for public ownership and subsidization of professional sports venues.
More generally, the inventory and assessment of TIF statutes in the context of professional sports venues offered by this article sets the stage for future research on associative relationships between TIF and facility finance outcomes as well as the normative value of venue related TIF. Work on the normative aspect may be particularly important. With TIF being in some ways a more difficult to understand and critique form of subsidy, it poses the risk of being more successful in helping rent-seeking actors overcome a strong literature indicating that public subsidies for sports stadiums are poor investments. Yet in cases where governments have already chosen to invest in a facility project and the decision depends on the means, the normative objective may then center on harm reduction and fairness. With the former, the question becomes of the numerous facility subsidy options, which means limits the public’s financial risk and maximizes utility? With the latter, the issue is more who should pay what?
On its face, TIF has the potential to beneficially address both goals. If the facility project is premised on anchoring ancillary real estate redevelopment, and reimbursement is only received upon increment generation, then TIF can be designed to force proponents to deliver on construction promises or be left without the subsidy, in turn limiting public financial risk. However, as Detroit demonstrates, performance risk should truly be with the private partner.
TIF also can be seen as conforming to the benefitting party pays principle in that but-for the activity, the revenue would not have been produced or produced as quickly. In the many instances where but-for is something of a fiction however, TIF becomes predatory on general and overlaying revenues. The relative benefit of TIF is then tied to what role the TIF subsidy plays in getting a deal completed. If TIF is crucial in closing a bargaining gap, then its risk shifting function provides relative utility over many alternative means to close the gap, and the revenue relied upon stems from the activity in question. If TIF has nothing to do with whether and when a project moves forward, then it has less fairness utility: effectively everyone’s tax burden share is higher than it would have been absent TIF.
Thus TIF may be a worthwhile form of major league facility subsidy if two conditions are met: but-for, and the shifting of underperformance risk to a private partner. If neither component is present however, politicians may be using TIF as a means to mask the true subsidy cost and limit their own political risk as opposed to protecting against the financial risks that such facility investments pose to the public. However future research is needed to test these hypotheses as well as shine more light on the specifics of where thresholds are met to make for a potentially beneficial facility related TIF project.
Endnotes
1. Richard Briffault, The Most Popular Tool: Tax Increment Financing and the Political Economy of Local Government, 77 U.C. L. Rev. 66, 67 (2010).
2. Id. at 71.
3. Robert T. Greenbaum & Jim Landers, The Tiff Over TIF: A Review of the Literature Examining the Effectiveness of the Tax Increment Financing, 63 Nat’l Tax J. 655 (2014).
4. Rachel Weber, Tax Increment Financing in Theory and Practice, in Financing economic development in the 21st century, 56 (Sammis B. White, Zenia Z. Kotval eds., 2014).
5. Id.
6. Briffault, supra note 1 at 73–74.
7. See Jan Brueckner, Tax Increment Financing: A Theoretical Inquiry, 81 j. pub econ. 321, 329–41 (2001).
8. Id.
9. Id.
10. See, e.g., Dennis Coates & Brad Humphreys, The Growth Effects of Sport Franchises, Stadia, and Arenas, 18 J. Pol’y Analysis Mgmt. 601 (1999); Rodney Fort, Sports Economics (2003).
11. Charles M. Tiebout, A Pure Theory of Local Expenditures, 64 J. Pol. Econ. 416 (1956).
12. See Mark Rosentraub, Major League Winners: Using Sports and Cultural Centers as Tools for Economic Development (2009).
13. See, e.g., Kevin Delaney & Rick Eckstein, Local Growth Coalitions, Publicly Subsidized Sports Stadiums, and Social Inequality, 30 Human. & Soc’y 84 (2006).
14. Brad Humphreys & Li Zhou, Sports Facilities, Agglomeration, and Public Subsidies, 54 Reg’l Sci. & Urb. Econ. 60 (2015).
15. See Charles Tu, How Does a New Sports Stadium Affect Housing Values? The Case of FedEx Field, 81 Land Econ. 379 (2005); Xia Feng & Brad Humprheys, The Impact of Professional Sports Facilities on Housing Values: Evidence from Census Block Group Data, 3 City, Culture & Soc. 189 (2012).
16. Brad Humphreys & Adam Nowak, Professional Sports Facilities, Teams and Property Values: Evidence from NBA Team Departures, 66 Reg. Sci. & Urb. Econ. 39 (2017).
17. See Delaney & Eckstein, supra note 13.
18. Id.
19. See Charles C. Euchner, Playing the Field: Why Sports Teams Move and Cities Fight to Keep Them (1994).
20. See Delaney & Eckstein, supra note 13.
21. See Bruce K. Johnson & John C. Whitehead, Value of Public Goods From Sports Stadiums: The CVM Approach, 18 Contemp. Econ. Pol’y 48 (2000).
22. Briffault, supra note 1, at 87.
23. Jay Scherer, Resisting the World-Class City: Community Opposition and the Politics of a Local Arena Development, 33 Soc.& Sport J. 39, 45–46 (2016).
24. See Brueckner, supra note 7, at 327.
25. See Philip Geheb, Tax Increment Financing Bonds as “Debt” Under State Constitutional Debt Limitations, Urb. Law. (2009).
26. Id.
27. See Weber, supra note 4.
28. Briffault, supra note 1, at 73.
29. See Bent Flyvbjerg, Massimo Garbuio & Dan Lovallo, Delusion and Deception in Large Infrastructure Projects: Two Models for Explaining and Preventing Executive Disaster, 51 Cal. Mgmt. Rev. 170 (2009).
30. Briffault, supra note 1, at 88–89.
31. Id.
32. Id.
33. Robert Sroka, Tax Increment Financing and Major League Venues (July 20, 2019) (unpublished manuscript).
34. J.C. Reindl, Little Caesars Guy on New Detroit Arena Roof? Wings Fans Seeing Red, Detroit Free Press (July 11, 2017), https://www.freep.com/story/money/2017/07/11/painted-little-caesar-new-arena-roof-sparks-social-media-controversy/469450001.
35. Louis Aguilar, District Detroit: Inside the Ilitches’ Land of Unfulfilled Promises, Detroit News (May 22, 2019), https://www.detroitnews.com/story/news/local/detroit-city/2019/05/22/ilitch-companies-control-district-detroit-area-land-larger-than-downtown/2636965002.
36. Id.
37. Id.
38. Id.
39. Id.
40. Id.
41. Id.
42. Id.
43. Id.
44. Id.
45. Id.
46. Sroka, supra note 33.
47. Steve Brown, Frisco Square Land Sells for New Development, Dallas Morning News (Nov. 9, 2018), https://www.dallasnews.com/business/real-estate/2018/11/09/frisco-square-land-sells-new-develpments.
48. City of Frisco, Master Development Agreement for Facilities and Related Improvements (2013), https://www.friscotexas.gov/DocumentCenter/View/1574/Frisco-Master-Development-Agreement.
49. Lindsey Juarez, Development Joins Slew of Other Well-Known Public-Private Partnership Deals in City, Community Impact Frisco (Jan. 11, 2019)
50. Id.
51. See Why Frisco, Frisco Economic Development Corp.
52. D.C. Code Mun. Regs. tit. 2, § 1217.12. (2005).
53. D.C. Code Mun. Regs. tit. 10 § 1602.02. (2011).
54. Fund Created to Appease Ballpark Critics, Wash. Times (Oct. 27, 2004), https://www.washingtontimes.com/news/2004/oct/27/20041027-100543-1391r.
55. Marc Fisher, Ballpark Boomtown, Wash. Post (July 14, 2018), https://www.washingtonpost.com/graphics/2018/sports/nationals-park-brings-growth-worries-to-southeast-washington/?utm_term=.971e6d7ec985.
56. D.C. Code, supra note 53.
57. D.C. Office of the Chief Fin. Officer, Financial Plan FY 2013, 3–12 (2012), https://cfo.dc.gov/sites/default/files/dc/sites/ocfo/page_content/attachments/ocfo_fy2013_financial_plan_and_structure.pdf.
58. See Greenbaum & Landers, supra note 3.
59. E.g., Michael P. Juby, Tax Increment Financing in North Carolina: The Myth of the Countermajoritarian Difficulty, 83 N.C. L. Rev. 1526 (2004).
60. E.g., Colin Gordon, Blighting the Way: Urban Renewal, Economic Development, and the Elusive Definition of Blight, 31 Fordham Urb. L.J. 305 (2003).
61. Craig Johnson & Kenneth Kritz, A Review of State Tax Increment Financing Laws, in Tax Increment Financing and Economic Development: Uses, Structures, and Impact 31 (Craig Johnson & Joyce Man eds., 2001).
62. Id.
63. See Del. Code Ann. tit. 22, § 17; Juby, supra note 59.
64. See Laura Smith, Alternatives to Property Tax Increment Finance Programs: Sales, Income, and Nonproperty Tax Increment Financing, 41 Urb. Law. 705 (2009).
65. Id.
66. Id.
67. Id. at 721.
68. See Robert Sroka, Getting STIF[ed]: Louisville’s Yum! Center, Sales-Tax Increment Financing, and Megaproject Underperformance, Urb. Aff. Rev. (2019), 1078087419830527.
69. Ill. Revenue, Sales Tax Increment Financing (2018), http://www.iltax.com/LocalGovernment/Overview/HowDisbursed/tif.htm.
70. John Stafford, Sales Tax Increment Financing in Indiana: Putting HB1144 Into Historical Perspective, Ind. Fiscal Pol’y Inst. (2017), http://indianafiscal.org/resources/IFPI%20session%20report%20No.%204%20.pdf.
71. Kentucky Economic Development Finance Authority, Louisville Arena Project Revenue Bonds Series 2008, Louisville Arena Authority, Inc., 2008, 1–100.
72. Kentucky Economic Development Finance Authority, Louisville Arena Project Refunding Revenue Bonds Series 2017, Louisville Arena Authority, Inc., 2017, at 9.
73. Bill Shea, Latest Little Caesar’s Arena Project Construction Cost: $862.9 Million, Crain’s Detroit Bus. (June 6, 2017), http://www.crainsdetroit.com/article/20170523/NEWS/170529950/latest-little-caesars-arena-construction-cost-862-9-million.
74. Daphne Kenyon & Adam Langley, Payments in Lieu of Taxes: Balancing Municipal and Nonprofit Interests, Lincoln Institute of Land Policy (2010), https://community-wealth.org/sites/clone.community-wealth.org/files/downloads/report-kenyon-langley.pdf.
75. Mo. Code § 99.845 (2011).
76. Id.
77. Ted Gayer et al., Tax-Exempt Municipal Bonds and the Financing of Professional Sports Stadiums, Brookings Inst. (2016).
78. Id.
79. See generally Lorlene Hoyt, Planning Through Compulsory Commercial Clubs: Business Improvement District, 25 Econ. Aff. 24 (2005).
80. Id.
81. Wick Allison, How to Build Another Uptown, D Mag., 2014.
82. Susan Mead & Ann Cole, Eminent Domain in Tax Increment Financing Districts and Other Redevelopment Areas: A Developer’s Perspective, 30 Urb. Law. 619 (1998).
83. Kelo v. City of New London, 545 U.S. 469 (2005).
84. Id.
85. Kan. Stat. Ann. § 26-501.
86. Fla. Const. art. X, § 6.
87. Paul F. Byrne, Have Post-Kelo Restrictions on Eminent Domain Influenced State Economic Development? 31 Econ. Dev. Q. 81 (2016).
88. Id. at 84.
89. See Robert Sroka, TIF For That: Brownfield Redevelopment Financing in North America and Calgary’s Rivers District, 9 Cambridge J. Reg., Econ., Soc. 391 (2016).
90. See Dall. Cty. Dept. Planning & Dev., 2016 TIF District Status Report 1-2 (2016).
91. See Judith Grant Long, Public/Private Partnerships for Major League Sports Facilities (2013).
92. Tenn. Code Ann. §13-20-201 (2010).
93. Fla. Stat. §163.340 (2017).
94. Il. Muni. Code, §74.4.
95. Id.
96. Utah Code Ann. § 17C-5-405.
97. Utah Code Ann. §17C-5-403.
98. Dall. Cty. Office of Econ. Dev., Public/Private Partnership Program (2018), http://www.dallasecodev.org/263/Public-Private-Partnership-Program.
99. Id.
100. DC Code Mun. Regs. tit. 2 § 2–1217.03 (2018).
101. Minn. Stat. § 469.175 (2017).
102. Wis. Stat. §66.1105 (2017).
103. Id.
104. Id.
105. Id.
106. See e.g., Robert Baade & Victor Matheson, Financing Professional Sports Facilities (2011).
107. Nicholas Griefer, An Elected Official’s Guide to Tax Increment Financing, Government Finance Officers Ass’n 22 (2005), https://www.gfoa.org/sites/default/files/EOGTIF.pdf.
108. Or. Rev. Stat. §457.085 (2017).
109. Minn. Stat. §469.175 (2017).
110. See Joe Gromacki, A Madison Approach to TIF Feasibility Analysis, City of Madison, Aug. 14, 2014, https://docs.legis.wisconsin.gov/misc/lc/study/2014/1192/020_august_14_2014_meeting_10_00_a_m_413_north/gromacki.
111. Id.
112. Id.
113. Id.
114. Weber, supra note 4.
115. See Robert Sroka, Pyrrhic Victory: Tax Increment Financing, “But For,” and Developer Capture in the Dallas Arena District, 28 Marq. Sports L. Rev. 201 (2017).
116. Shea, supra note 73.
117. Greg Ryan, Bond Experts: Boston 2024 Financing Plan Contradicts Vow to Avoid Public Funds, Boston Bus. J. (May 28, 2015), https://www.bizjournals.com/boston/news/2015/05/28/bond-experts-boston-2024-financing-plan.html.