OP ED: TIF, RDA, Time to Take a Deep Breath

By Björn Wellenius and Palmer Beebe

What is the real issue here? Wickford El has become a town liability. The public voted not to indebt itself to restore and repurpose the school as a new town hall, and authorized the town to dispose of the property. The town is trying to do this while also preserving the school building for its historical significance to the community. Tax increment financing (TIF) would encourage the private sector to both develop and preserve the property, and a redevelopment agency (RDA) would provide oversight by the public.

TIF refers to a type of public financing tool that supports a development project that has community interest but is not commercially viable on its own, and is repaid by a dedicated property tax revenue stream generated by the project. TIF is not a tax break. The new development pays property taxes at prevailing rates, of which a part is used to service and pay off the TIF debt. These new taxes could not be realized without the TIF. TIFs are widely used nationally, including in Rhode Island, as a form of public- private partnership. This tool allows the public to incentivize private enterprise for the benefit of the community.

Relating to Wickford El, the obligation to preserve the school has a negative impact on the value of the property. A case can be made for using TIF to offset this impact, but only to the extent needed for property development to just become commercially viable. Either by offsetting decline or improving infrastructure, the intent of TIF is to benefit the community. Using TIF provides an opportunity to add value to Wickford at no cost to the existing taxpayers.

According to Rhode Island state law, projects supported by TIF require a town board consisting of members of the public to oversee aspects of the development. This board is called a redevelopment agency or RDA. The recently approved amendment of the Comprehensive Plan allows the Town Council to consider establishing an RDA. The Town Council can create an RDA by ordinance, following established procedures. No RDA would be needed if TIF will not be used.

In order to use TIF for Wickford El, the first step would be for the RDA to prepare and submit to the Town Council a redevelopment plan for this property. For this to happen, the developer needs to define the project, justify the amount of TIF needed, explain what the funds would be used for, and show how it would be repaid. No project, no TIF.

Contrary to the opinion of some, TIFs and RDAs are not evil. They are merely a means to municipal revitalization. One thing is certain. We need to take a positive step in some direction. Doing nothing hasn’t been the answer in the past. We can’t expect it to be the answer in the future.

Björn Wellenius and Palmer Beebe North Kingstown