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HOLD OFF ON T.I.F - AND MORE!
by:
Mr. Charles M. Weymouth, AIA
&
Mr. Fritz Griesinger

August 27, 2008


The Civic League has previously passed by resolution curtailment of further new residential growth unless there is demonstrated need—that support to economic generators requiring a proximity of housing or means easily to avail such work. A substantial portion of mandated infrastructure costs to residential growth comes from State/Federal sources, and, unique to Delaware, much from private, outside resources derived from State franchise taxes, etc-to pay for schools, roads, sewer, etc—not from the County which sponsors such proliferate residential growth. Whether entitlements or Capital projects, it is borrowing more money from the International well source, to, only perhaps, be paid by our future generations. In ever stiffer competition, our natural resource products are paid at higher purchase costs abroad, and, beyond our shores, manufactured products and services are produced at equal quality and less cost. We don't have the money ourselves to continue our self indulgence. Noting the above, housing infrastructure costs should be paid by the developer.

Now to the proposed T.I.F. One can be fully immersed in the given attributes for a specific project, albeit T.I.F. Nationally aimed at long term job creation for business or industry): it is a redevelopment, (albeit new residential housing) within an existent urban core, with substantial existent infrastructure, close proximity to interstate, inter modal transit systems, nearby public open space, AT FIRST GLANCE, a government required user fee pay-back on up front financing, however prolonged that recovery of costs. The payback period is in determinant (do sums intended actually divert to pay back limited up front financial underwriting?) The government could still be denied benefits due to remaining tax write down/depreciation continued as in a normal business real estate investment and, with this County financial underwriting, a vote of Council might extend the payment schedule and the County never paid in full. Current housing "for sale" signs and National foreclosures cannot predict full owner occupancy or timely build out. It could easily appear there is a surplus of existing housing stock.

Other counter arguments to such T.I.F. proposal: a high land cost purchase "boondoggle, " now being potentially endorsed by government intervention, could remain an ultimate financial loss with the un informed attendance by future taxpayers. The physical plan, for the residential elements again revised with low rise, tightly clustered row units, "first cost," construction spread over much of the site, with but a few nuances of challenged "New Urbanism", such image portends light framed construction (fire/sound concerns), a lessoned quality of life (less private open space) and higher infrastructure costs---roads, sewer, Schools, police, etc. (Admittedly, the major burn out of the O'Neil complex/Norristown brings focused attention to the fire hazard of light frame mid rise.)

Though the County Reorganization Act provided for the County to establish a Redevelopment authority, and much as other jurisdictions have in place for intended long term economic growth, this would be our County's first such endeavor and to a questionable, and short term, purpose. Due to only cursory County requirements for physical description in presentation (thus preserving the ability to change the plan in the future), any reviewing body may have only limited visualization what this project will eventually become or the tortuous changes endured by future residents of unwanted change. Market changes can markedly change or curtail any one plan. Financially, it is also conceivable, that laying beneath that criticized inordinately high land purchase price (winning the development rights) and the immediate viewer sympathy due to the apparent stressed financial picture, beneath such manifestations could be a payback by the original seller, voiding such financial need. Has the County received the land transfer taxes? In evaluating a project, the profit on the escalated value of the land rezoned, is usually captured by that initial developer at the first stages, compromising the quality of the project in its build out. Government intercession is not going to make it better.

Our economy being down and the ability to pay for new housing projects at super inflated costs, it would be unwise for the County to invest in this project, or any real estate project at this time. The design reflects only possible marginal increase in quality of life to that previous project, with an undue burden on the State and Federal government to the immediate benefit of only the developer. Real estate is a risk venture, the developer, assuredly, taking this into account and must now bear the burden of that risk.

The County should not entertain engaging in a new Redevelopment Authority or engage in an Authority of any form.

Sincerely,
FRITZ R. GRIESINGER       Email: Fritzpsi@aol.com
CHARLES MACHOLD WEYMOUTH, AIA       Email: CWeymouth@aol.com

 


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