Once again, the city of Bettendorf is planning to award tax incentives to a developer, this time for an office building on prime real estate adjacent to Interstate 74.
The deal would rebate a total of $250,000 in city, school district and county taxes over a 10-year period back to the developer. The incentive with Plantation Development sets a bad precedent and should be turned down.
Initially, Tax Increment Financing (TIF) incentives were a way for municipalities to use increased taxes from a particular development to pay for infrastructure (i.e. streets, sewers) of the development.
But today, the tax money is rebated to the developer to make it a more attractive investment for the developer and/or the project investors. The city remains responsible for picking up the incremental costs for the development, whether it's additional street sweeping, or fire and police protection.
Another justification for TIF incentives is they're necessary because development would otherwise not occur on the "blighted" or "under utilized" property without some financial help.
There are many properties in Bettendorf in need of improvement, but the area being offered tax incentives is arguably one of the choicest parcels in the city. Located next to Interstate 74, the property boasts high capacity Internet access and is next door to Trinity Medical Center and choice real estate development along Utica Ridge Road.
Another, more recent, justification of TIF incentives has been to encourage new "technology driven" job creation. But the list of businesses targeted for this "I-74 Technology Park" are pretty low tech by any measure: an office for the developer, a language translation company, financial and business consulting firms and "defense contractors."
Under such a loose definition, nearly all businesses currently located in Bettendorf would qualify for a TIF incentive for expanding or relocating. And, there's no assurance tenants in the new development won't already be currently located in the city.
Even if you believe the city should provide incentives for all businesses to expand or locate in the city, these TIF deals involve other taxpayer money: the local school districts and the county.
The largest percentage share of tax money rebated under current and new TIF's are dollars due the local school district. The city customarily informs both the school district and county about TIF plans, but neither has any authority to approve, or deny, the rebates.
Many factors go into deciding where to locate a business: good roads, quality schools, a well-educated/skilled workforce, reasonably priced land/utilities, affordable housing, local tax rates, a quality environment, excellent amenities.
On most of those factors, Bettendorf can compete in the marketplace for businesses. There should be no need to add further enticements (like TIF deals) that place an additional burden on city services and existing taxpayers.
Tax Increment Financing incentives undermine current businesses and are not in the long-term best interest of the city.
CLICK HERE to download information on the city's latest TIF deal.
