Does anyone have a running total of all the incentives DIA has given out over the last 5 to 10 years to developers? Are we close to or above $1 billion? And, what is our ROI on that?
Doesn't seem Downtown has exactly taken off as planned. Would be proof positive that investing dollars in other avenues might be better for everyone. Hope a Deegan administration takes a fresh look at this approach.
If the various large rendering projects get underway (Lions Skyscraper, old courthouse, brew house, Trio) then we will top $1B in incentives when you factor in the various Vestcor projects DT as well. I could do the math to see, if you take vestcor out, what it comes out to but it is certainly close.
Also, need to agree on how to define the monetary impact of an incentive. Obviously, cash up front 'counts' as a cost to the city. But, what about an abatement or discount of future property taxes on the increased property value? Do you count cash-on-completion of a project just starting, in today's budget, or whenever the project is proposed to be completed, at a future-value in today's budget? How does a delay in completion affect that accounting?
It is a simple concept to model, but extremely hard to do accurately. Generally, money 35 years from now is worth half of what it is today. (Rule of 70). But a single year of high inflation changes all of that. So, basically impossible to know but generally in 30 years it will be worth half of what it is today.
Does anyone have a running total of all the incentives DIA has given out over the last 5to 10 years to developers? Are we close to or above $1 billion? And, what is our ROI on that?
Doesn't seem Downtown has exactly taken off as planned. Would be proof positive that investing dollars in other avenues might be better for everyone. Hope a Deegan administration takes a fresh look at this approach.
I feel like at least part of the question here is gonna be figuring out how much money we actually gave out in the first place, and whether the projects they were given to actually happened.
I think regardless this argument by Charles is what I have been mentioning as well. Even if these projects don't happen, the opportunity cost of not doing so has arguably become more expensive. There are several mostly true statements that support that.
- Construction Costs don't go down
- Housing Values don't go down
- The US has continuous inflation
(Please, I don't need someone telling me "Oh but remember in 2008.." because everyone knows about 08. I'm talking about the 80+ years of data outside of 2008.)
So every year that a project is not started, the cumulative cost the taxpayers rises because assumption 2 is simply not true in the microenvironment we have DT.. but the other two are. Oh and the opportunity cost continues to "increase" the true cost of development on their respective parcels. So truthfully, housing/rent values are what limit DT and are why we can't get out of the incentive loop. (Inputs are increasing their spread). Also why several local leaders have started to question incentives on the Southbank for multifamily.