April 17, 2013 - To the editor:
In his April 11 letter to the Call, Grant Mabie offered advice on the Crestwood Court redevelopment.
First, in blatant disregard for the right to free speech, he recommended that the Call stop publishing letters which contain misinformation about tax-increment financing, or TIF — though he declined to recommend an arbiter who would decide what constitutes “correct” information.
Then he urged Crestwood’s incoming board to hire the professionals who can shepherd them through the development process. Given Mr. Mabie’s profession and employer, his favorable view toward Centrum’s proposed mall redevelopment, including his support of TIF, is not surprising.
In supporting the use of TIF for Centrum’s plan, Mr. Mabie and those who would like to see the mall developed at any cost are ignoring a vital piece of information. Sol Barket has twice publicly admitted that Centrum does not need a TIF to develop the mall. The distinction Mr. Barket drew for the public is that the redevelopment will not move forward without a TIF.
Why? Simply put, Angelo Gordon & Co., the mall’s majority owner, made its investment with the expectation that its investors would earn an expected rate of return on their investment.
This explains Mr. Barket’s comment that the rate of return on the project would be higher with a TIF than without one — 10 percent versus 5 percent. Centrum doesn’t need the TIF to assist with the project’s development costs; it needs the TIF to meet a designated return on investment, or ROI, for its investors.
While this is a nuanced point, it is central to the TIF debate. The incoming board must weigh the interests of New York-based Angelo Gordon & Co. — with $13 billion in real-estate holdings — against the interests of local businesses and taxing districts, which would be forced to forgo income so that the mall’s owners could enjoy a higher rate of return on their investment.
Editor’s note: Martha Duchild’s husband, Paul, serves as Crestwood Ward 3 alderman.