The $20 million Hatch project in NewBo will receive $3.5 million in tax breaks over 20 years, according to B.A. Morelli’s report (“Cedar Rapids projects put affordable housing center stage,” Dec. 19).
Were the city to forego the tax break and its public bank to finance the $20 million project at 1 percent, interest would total more than $2 million — and the city would get taxes, rather than losing $3.5 million in uncollected taxes. That’s a turnaround of $9 million to the city.
Plus, Jack Hatch would get to deduct interest and taxes, and the community would get the affordable housing for which it is “starving.” Neither would citizens have to bear the burden of the austerity accompanying reduced tax revenue or of having to pony up additional funds to make up for lost taxes. The City would be using tax dollars to benefit the community rather than have the interest paid fly off to distant pockets.
Perhaps Hatch’s interest rate is better than 1 percent. The public bank could even charge a half percent and come out on the plus side. Should Hatch default, the city has an apartment complex to market in the “hottest” part of town — as a member of the Council characterized NewBo.