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Cedar Rapids, Iowa 52401
CEDAR RAPIDS - Tightening availability of incentives at state and federal levels for local projects, particularly quality-of-life amenities, have spurred cities to step up, Cedar Rapids City Manager Jeff Pomeranz said during a panel discussion about use of tax incentives.
For example, money from the Vision Iowa Program, a fund for recreational, cultural, entertainment and educational attractions, is harder to come by, and Congress has clamped down on federal earmarks.
'It means to me cities can't do less,” Pomeranz said. 'They have to do more. With these dollar becoming highly competitive, with fewer dollars for projects, it really comes down to a local community to work toward making things happen.
'It is certainly our style in Cedar Rapids if we see a good project, we don't want to let it go, if it makes sense for our city, if it creates jobs and creates vitality. More has to be done in my mind locally because we can't always rely on other partners.”
He was speaking as part of a panel discussion hosted by The Gazette at the Cedar Rapids Public Library on Thursday morning that also included Coralville City Administrator Kelly Hayworth, Cedar Rapids area developer Steve Emerson and Dave Swenson, an economist at Iowa State University.
The panel tackled the complexities of public tax incentives, and particularly tax increment financing. In a TIF, a municipality captures the incremental tax growth of a designated property or area and reinvests it specifically in that area, but it doesn't go to the rest of the city or county.
Swenson, who's been a critic of overuse of tax incentives by cities and the state, said tax incentives have shifted over time from urban renewal tool addressing blighted areas - which he supports - to purely for economic development, of which he questioned the efficacy.
'A lot of the money is being used for firms that would have expanded or located here nonetheless,” Swenson said. 'We can't distinguish between the needy and greedy, and the public ends up paying more than it needs to for economic activity.”
Emerson spoke from the perspective of a developer tackling a project that serves a public good, such as restoring a historic property, but has added time and cost. Without the incentive, the project might not happen, he said.
He added that the public benefits because the incentives lead to new tax base and don't require public investment.
'There's times there is so much you have to do, so much to the historic flooded buildings, the costs are much higher up front to be able to redevelop them, and if you don't develop them they are just going to sit there and degrade further,” Emerson said. 'But some projects don't need it.”
Coralville had become one of Iowa's most prolific users of TIF, such as for Coral Ridge Mall and Iowa River Landing developments. But as a wave of TIF districts expire, including the 20-year TIF for the mall, Coralville will start to see the benefit, Hayworth said.
The portion of Coralville's property value tied to a TIF district will decline from 40 percent today to 10 percent by the end of next year, Hayworth explained.
'And every year thereafter we will have continued rolloffs,” Hayworth said. 'We are really happy that it is working in our particular case, and we are now actually able to have funds come back to all the different entities and we are able to see the benefits of that today, after which we struggled with for about 20 years.”
Some 90 people attended the panel discussion, the first in this year's series of quarterly Gazette business events.
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