Governor supports 7th ‘TIF’ district; Lauzon pleased
By Peter Hirschfeld
and David Delcore
Staff WriterS | September 07,2012
MONTPELIER — The high-stakes race to become Vermont’s next “TIF” district looks like it could have two winners instead of one.
Gov. Peter Shumlin on Tuesday said he’ll work with the Legislature next year to revise a law that could otherwise have prevented either Barre or South Burlington from using property tax revenue to pay off debt incurred for improvements to roads and other infrastructure.
Existing law limits to six the number of Vermont municipalities allowed to become “tax increment financing” districts, a status that allows cities to withhold for public works a portion of tax revenues that would have otherwise been sent to the state’s education fund.
But Shumlin said that when lawmakers instituted the cap in 2006, no one anticipated the scenario involving Barre and South Burlington that unfolded last week when representatives from both communities submitted their TIF applications minutes apart for the sixth district.
“No one could have predicted a photo finish between two communities filing applications for the last TIF district slot,” Shumlin said.
Given the time and money invested in the process by both cities, Shumlin said, “the fair thing to do now is allow both Barre and South Burlington (proposals) to go through the review process.”
Shumlin has assured leaders in both cities that he’ll persuade lawmakers in January to make an allowance for an additional TIF district.
“I can’t say they’ve said, ‘We’re going to pass it,’” Shumlin said at a Statehouse news conference. “But I think they understand why we’re looking at avoiding this competition between South Burlington and Barre, and I think they’re sympathetic.”
Reached at the Democratic National Convention in Charlotte, N.C., House Speaker Shap Smith said that while he has underlying concerns about the TIF concept, he “won’t stand in the way” of the governor’s proposal.
“The difference between six and seven (districts) to my way of thinking is more of a technicality,” he said.
Smith, however, said he isn’t convinced that TIF districts are the most effective way to spur municipal redevelopment.
“TIF districts do work in some instances, but I think that only certain communities in Vermont can access that kind of financing,” Smith said. “I would like to find some way we can finance redevelopment so that all communities will have access to it.”
Fred Kenney, head of the Vermont Economic Progress Council, which will evaluate the cities’ proposals, said he’s confident enough in legislative action to proceed as though the state will allow a seventh TIF district.
Barre Mayor Thomas Lauzon, who is a vocal proponent of TIF districts, said those words were music to his ears.
Lauzon praised Shumlin for making the right call and asserting his influence to resolve what could have quickly devolved into a TIF tiff.
“I’m grateful to the governor for supporting this solution,” he said.
Just a week ago, Lauzon was quick to suggest both communities’ applications be reviewed by the VEPC board after learning that they had been submitted almost simultaneously.
“That just seems fair to me,” he said, reiterating his belief that it “would be unfortunate for this to turn into a competition” between communities interested in making the most of a valuable economic development tool.
Although Lauzon said he hadn’t reviewed South Burlington’s application, he said he understood it is an attempt by that community to establish a defined town center — a laudable goal but one that, he believes, is no better than Barre’s.
“South Burlington is trying to create (with TIF money) what we are trying to support,” he said, pointing to Barre’s efforts to invest in infrastructure improvements that will enhance and attract development in the city’s historic downtown district.
According to the council-approved TIF plan, that may require construction of a multimillion-dollar parking garage, as well as redevelopment of Merchants Row and Enterprise Alley. Both projects, in conjunction with the current reconstruction of North Main Street, will help spur a downtown renaissance that is highlighted by plans to redevelop the historic Blanchard Block and to build City Place — a structure that would bring new businesses and more than 200 state employees into the heart of the city’s business district.