Month: October 2012
This message is a guest post from the City of Cincinnati
For those who have read the Cincinnati Enquirer’s Sunday Editorial, “Streetcar: Stop,” there are quite a few inaccuracies surrounding the financing plan and operations plan. Please help us spread the correct information.
The Enquirer wrote: “The budget now plans for $14 million to come from a pool of money created by tax revenue generated by property improvements to The Banks.” This is wrong.
The editorial refers to what’s commonly called a Tax Increment Financing (TIF) district. The plan had always been for part of the streetcar financing to come from the Downtown South/Riverfront TIF District — this is nothing new.
And $11 million will still come from the Downtown South/Riverfront TIF District, but not The Banks — The Banks project generates its own revenue that goes back into The Banks.
Rather, the City has changed the source of funds for repaying $14 million of the $25 million in notes issued as part of the original financing proposal for the streetcar project.
The substitution source for the $14 million is the Urban Redevelopment Tax Increment Equivalent Fund, which was established in 1995 to collect service payments from the Westin/Star, Hyatt and Saks. This fund was not currently committed to any project. The City’s Finance Department will commission a study to determine the current valuation of the Downtown South TIF, but because we need to issue the bonds, we will use this as the source in the interim.
When the Downtown South TIF District rebounds because of growth projects both within and surrounding the district — like the Casino, The Banks, Dunnhumby, Omnicare and the Streetcar — the City will look at the Downtown South TIF District as a funding source once again.
Projects the Enquirer referred to that need funding such as a police district on the West side and the Smale Riverfront Park were already passed by Council in June and are happening.
The Enquirer wrote: “Mayor Mallory and City Manager Dohoney are counting on growth and development along the streetcar route to cover the $3 million or more each year that it costs to operate it.” This is patently wrong.
The City has publicly said again and again that the operating costs will come from sponsorships, fare box revenue and up to $3 million of casino revenue. Even baseline projections show that the casino will generate that and is a viable source precisely because property valuations lag actual investment.