NID deserves a review
Wednesday, November 12, 2003
A new proposal to give a boost to Prestwick Plantation, an upscale housing development planned for the area around Cape Girardeau's new Dalhousie Golf Club, has been made. The idea is to form a neighborhood improvement district to pay for water, sewer and street improvements.
The new proposal comes on the heels of the decision earlier this year to abandon the idea of tax-increment financing which was strongly opposed by the Cape Girardeau School District because of the potential tax revenue that would have been diverted to the subdivision rather than going to the district.
There are some similarities and several differences between TIF and NID:
The TIF plan was proposed by the Prestwick Plantation developers. The NID plan was proposed by city officials.
Under TIF, tax revenue generated by the increased assessed valuation of developed home sites would have gone to the developer to be used for infrastructure expenses. Under NID, any increase in tax revenue would go to the various taxing entities, including the school district and city.
Both the TIF plan and the NID plan would be a big boost to the developer of Prestwick Plantation. Although both options have been available for a number of years, neither has been tried before in Cape Girardeau. No other developer other than Prestwick has sought TIF, and the city hasn't proposed a NID for any project except Prestwick.
Under TIF, the city would have had no financial liability, because the funding needed by the developer would have come from increased tax revenue. Under NID, the city would issue bonds to be paid off by special assessments on the individual parcels of property in the development. If the development fizzled after the bonds were sold, the city would be obligated to pay them off, but it would also have the development as collateral.
With TIF, a special commission had to review the plan and make a recommendation to the city council, which was not obligated to follow the commission's lead. Prestwick withdrew its plan before the commission made a recommendation. With NID, the city council would make the decision after a public hearing.
There was considerable opposition, along with that of the school district, to the TIF idea. Some of those opponents, including the school district's representative on the TIF commission, say they like the NID idea.
The city's interest in the Prestwick project has several dimensions. One is the desire to encourage development that will create jobs and have a positive impact on the local economy. Prestwick, which would have 700 expensive homes, is viewed as having much of the same impact that attracting a major new industry to town would have.
City officials say they would be willing to listen to similar plans from other developers, but some of those developers say they would rather use conventional financing options available from local lenders rather than deal with the bureaucratic red tape of a TIF or NID.
All of these factors, of course, will have to be weighed as the city moves ahead on the NID idea. The most important consideration for the city council will be what's best for the future of the city. The NID idea deserves a thorough review, just as the TIF plan received.