County should get on board if TIF is necessary
May 11, 2022
In coming weeks, the Ward County Commission is likely to take another look at a proposed Tax Increment Financing proposal for the former Midwest Federal building, also known as the “Big M” building for the iconic letter that has adorned its roof for many years.
The building has been largely vacant for about 20 years. The imposing building has been on a path to deterioration and, over time, possibly eventual demolition at the county’s expense. The building was in property tax arrears last year when EPIC Companies purchased it for renovation into commercial space, apartments and condos.
Given the potential for serious blight, not to mention the cost and complexity if demolition ever becomes required, it is not lost on county commissioners that something needs to be done. The commission is right to wait for the independent financial evaluation commissioned by the city. If that report indicates EPIC’s plans are feasible and a TIF is needed to ensure the financial viability of the project, we suggest the county commissioners get on board.
Tax increment financing does not allow the owner/developer to escape paying taxes. In this case, it does direct a large share of those taxes back into the project, saving the developer the equivalent of those taxes on renovation costs. As proposed, this TIF would take 90% of the taxes on improvements to the building and use the money to pay for asbestos abatement and associated demolition. Because of its environmental concerns, the presence of asbestos can add considerably to the cost of renovation and can be an inhibiting factor in development. Asbestos certainly has contributed to the Big M building standing vacant all these years.
The $2.7 million in taxes going to abate asbestos is money that the community won’t have to maintain roads, pay its teachers or use for other tax-related purposes. The trade-off is the Big M building becomes an asset rather than an albatross, with the ability to generate thousands of dollars in new taxes for the community after the 20-year TIF ends.
Communities don’t often get opportunities to bring buildings like the Big M back on their tax rolls. Normally, these buildings become blighted and are torn down. There’s no tax benefit in that scenario. We encourage the commission to carefully consider the TIF proposal, then take the long view in making a decision that will be best for taxpayers not only now but into the future.