Baton Rouge Metro Councilman Ryan Heck is urging his colleagues to take a stand against tax increment financing districts, starting with the River Park Development, a $600 million Mississippi River front project the council will vote on later this month.
This past week Heck sent a 900-word email to the Metro Council and two city-parish staff members outlining his concerns about using public dollars to finance the project and other projects like this in the future.
“I urge you to consider making this the time where we put our foot down and say, ‘No more retail TIFs in Baton Rouge,’” he wrote. “If we do not take a firm stance, this will continue to be an issue until such time that we can no longer provide basic services to the taxpayer.”
River Park is a proposed 50-acre project by developer Pete Clements that will include a boardwalk, hotels, retail, green space, a parking garage, concert facility and residential space.
A TIF was approved by the Metro Council in 2011 to rebate the 2 cent local sales tax back to the project. But, the agreement was terminated June 30 because the developer was unable to meet mandated requirements in the contract. The TIF is being renegotiated and will be put before the council for reconsideration on Aug. 28.
This is a different council than the one that previously approved the River Park TIF without any opposition. And even some of the council members voted in favor of the project in 2011 say they tend to agree with some of Heck’s statements now.
In Heck’s email, he draws comparisons to the Alive riverfront development which was included in two failed tax packages proposed by Mayor-President Kip Holden in 2008 and 2009. The Alive component was largely viewed as the downfall of the infrastructure plans.
“It is in effect a tax that the voters haven’t approved,” Heck wrote of using tax dollars to subsidize the River Park development. “In fact, it’s almost funny that they will be paying for a government subsidized entertainment complex on the river, when the voters have specifically shot this idea down time and time again.”
Clements has said the TIF would support the public aspects of the project including the boardwalk, parking garage and concert venue. But Heck said in his email that the public elements cannot be separated from the retail side.
“Without the parking and boardwalk, there is no incentive for customers to visit his development. It would likely be a failure,” Heck wrote. “To call them a public benefit is simply misleading.”
In response to Heck’s email, Clements said, “We respect that Councilman Heck is entitled to an opinion. We do not agree with some of his issues and will respond at the appropriate time.”
Heck also used the example of Gov. Bobby Jindal vetoing the Livingston Parish Juban Crossing TIF, which would have diverted state sales tax to finance the project.
“The reason Gov. Jindal vetoed the bill is because it would have involved the state with picking winners and losers,” Heck said. “I know first hand that the Mayor’s Office lobbied hard for the veto, as did several other BR centric groups. I myself sent a letter to Gov. Jindal requesting he veto the increased government participation in the project.”
Holden said Friday that it was “100 percent incorrect” that he or any of his intermediaries asked Jindal to veto the Livingston Parish TIF.
Holden said he supported the River Park development, but agreed the language of the TIF needed to reviewed.
Heck said in his email that the Juban Crossing development would have had a negative effect on Baton Rouge sales collections, just like River Park will negatively impact other developments.
“We’ll be subsidizing a private developer to cannibalize Ascension and Livingston’s tax base? And from other parts of our own parish?” he wrote. “The Mall of Louisiana? Cortana? Perkins Rowe? Towne Center? All of these wonderful retail centers were developed without subsidies.”
At least a couple council members say they agree with Heck.
Councilman Buddy Amoroso said he does not support the River Park TIF, because like Heck, he is concerned about subsidizing retail projects.
“Something needs to be done to help the river area but I just don’t think it’s the role for government to do that,” Amoroso said.
In recent months, the council has had to consider using public dollars to subsidize other economic development projects like Costco and IBM.
Amoroso said he supported Costco, a retail development, because he was concerned that if the city-parish didn’t approve the agreement, the retail giant would move to a neighboring parish.
He said he hopes the state legislature would consider banning retail TIFs “so we’re not pitting one parish against another.”
Councilwoman Ronnie Edwards said while she loves the concept of the development, she is concerned that the city-parish is “maxing itself out” with tax incentives.
She also said TIFs were initially designed for blighted and under served areas to promote development, but questioned whether the downtown riverfront met that definition.
Edwards voted in favor of the project in 2011, but admitted that she thinks the council as a whole was not carefully vetting some of the TIFs they’ve been asked to approve in recent years.
Councilman Joel Boé said he doesn’t want the city-parish to finance any developer’s profit margins, but he thinks the city-parish should give some consideration to large-scale developments like River Park.
“In reality, there are very few opportunities to do something of this scale. My door is open to anyone for a project of this magnitude,” Boé said. “Not just a financial magnitude, but I’m talking about impact on the community.”
Councilman John Delgado said it’s unrealistic to aim for a purely capitalist market.
“We are not a strict capitalist society, we do have some aspects that are government regulated, funded or supported,” he said.
He noted that Baton Rouge is the largest city on a major river without a commercialized riverfront. The reason is because the city-parish has not implemented the infrastructure needed to attract business to the area.
“This is not about picking winners and losers,” Delgado said, referring to Heck’s email. “The fact is if we don’t have this done, then everyone loses for having an undeveloped riverfront.”