The majority of the Davenport (Iowa) City Council took a cue from Scott County in voting to block incentives to redevelop the former Spring Village Shopping Center on East Kimberly Road.
Aldermen voted 8-2 on Tuesday to block $2 million in tax increment financing, or TIF, to assist redevelopment of the shopping center in the 2100 block of East Kimberly Road, where a Fresh Thyme Farmers Market is expected to open a 28,000-square-foot store.
“Our policy is we don’t TIF retail,” said Alderman Jeff Justin, who represents the 6th Ward and also serves as finance committee chairman.
Justin added he has heard from another potential developer who is looking at redeveloping the shopping center without asking for TIF.
Tax increment financing (TIF) districts take future gains in taxes generated by new development to subsidize improvements within the district.
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Note from Storm: If you’ve read any of my writings on TIF, or attended one of my workshops, you’ll know that I’m a big fan of tax increment financing when used properly. But over the past decade or two, TIF has increasingly been misused (such as for sprawl), abused (subsidies to politically-connected developers), and overused (draining general revenues).
I applaud the Davenport City Council for wisely rejecting this misuse of TIF funding for two reasons: 1) it would unnecessarily subsidize the store renovation that a developer should pay for themselves, and 2) retail does not revitalize: it’s a sign of revitalization, not a cause.
TIF should be used in a leveraged way that sets the stage for private investment. The best examples of this are infrastructure renewal, brownfields cleanup, and affordable housing (bring in residents and retail will follow). See this article for more on revitalization strategies.