Neil DeMause Blasts Zennie Abraham On Howard Terminal TIF Revenue, Proves He Doesn’t Know It

Neil DeMause Blasts Zennie Abraham On Howard Terminal TIF Revenue, Proves He Doesn’t Know It
Neil DeMause Blasts Zennie Abraham On Howard Terminal TIF Revenue, Proves He Doesn’t Know It In his missive about the Oakland A's SB 293 Skinner legislation and the planned use of tax increment financing, Neil wrote: As for how much tax could be redirected to this infrastructure fund, it depends on how big a TIF district Oakland approves. If we wild-ass-guesstimate a $1 billion development, though, and the effective property tax rate in Oakland is a little under 1.5%, then over 30 years, in present value … we could maybe be talking about $200 million or more. Probably less than that given that you’d have to deduct the current value of Howard Terminal land, but still, likely somewhere in the low nine figures. Maybe. Neil just proved he does not know how to do tax increment financing. The fact is the $1 billion development is just the stadium but let's start there as it is privately owned in the TIF financial plan, and has to be. Over a 45 year period, assuming a rate of growth in assessed value of 4 percent, the actual tax increment revenue is $800 million. Since the actual average rate of growth in assessed value there is 6.5 percent, the expected TIF revenue is just over $1.8 billion. That's far greater than the "$200 million or more" Neal came up with, and even the present value calculation would be greater because it's based on the TIF revenue stream, even at 30 years. It's one thing for Neal to criticize some stadium spending, but not everyone under the same brush. It's completely useless to anyone trying to understand new legislation that may be used to help finance a stadium. What Neal also completely forgets is that tax increment financing revenue is greater with the increase in assessed value of the properties paying the annual property tax. Few developments are more expensive than stadiums. Tax increment financing is an intelligent way to capture a giant revenue throw off and use it for public good. Stay tuned.
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