Kiss defends tax district, rejects city council vote to remove TIF from March ballot

The Burlington City Council attempted to reverse a major decision on Friday, voting 10-0 to remove a ballot item that would allow the city to obligate up to $10 million for downtown infrastructure improvements in a new Tax Incremental Financing (TIF) District.

A few hours later, Mayor Bob Kiss demonstrated that he does not plan to be a lame duck by issuing a strong statement that defended TIF and said the question will remain part of the March ballot.

The Council’s move came in response to recent report by state Auditor of Accounts Tom Salmon that examined Milton’s TIF, which was created in 1998. The audit argues that Milton now owes $3.4 million to the state tax department due to confusion over the handling of education taxes. No decision has been made about whether any money will have to be paid.

Vermont laws have been updated since the Milton TIF was created to help avoid such confusion. But City Councilors in Burlington, led by Republican Mayoral candidate Kurt Wright, decided that delaying a vote until November or later was preferable to asking for approval while questions linger.

In explaining his decision, Mayor Kiss noted that, despite the council’s vote, members also voiced unanimous support for the proposal. “I do not believe it is constructive to remove the TIF question from the March ballot at the eleventh hour, after substantial efforts by many, with strong support from numerous stakeholders,” he wrote.

“We should be open to questions from the public, not fearful of them,” Kiss added, suggesting that Council members “focus their energy on supporting the TIF question for this March by actively working to inform the public on why it is important to the City’s future.”

On Dec. 5, the Council voted unanimously to ask for voter approval of a downtown TIF. Establishing a new district would empower the council itself to borrow up to $10 million “by pledging the credit of the city” to subsidize and stimulate promising redevelopment ideas. At the time of their first vote a few councilors expressed concerns, but only about how the public might view the proposal.

Since then Wright and Democrat Miro Weinberger have mentioned it as a tool they hope to employ in pursuing projects. Weinberger has discussed it as part of a plan to save Centennial Field by exploring a “new ownership structure” with UVM. Wright frequently mentions it in relation to a key promise, getting a development project started within three years on the gateway “superblock” that includes Memorial Auditorium.

On Friday, however, he urged Mayor Kiss to follow his lead, and that of the Council, by allowing the item’s removal from the ballot. Looking down the table at the man he hopes to replace, Wright said, “Don’t let your last legacy be something that hurts the city.”

Wright, who is also a state representative, argued that “there is a big cloud up there [in Montpelier] around this issue.” If the mayor keeps it on the ballot, he threatened, “it goes down in flames.”

David Hartnett, a Ward 4 Democrat who is managing Wright’s campaign, added that reconsidering an earlier decision “is the way it’s supposed to work. This is it right here.”

The vote came at the end of a brief Special Meeting requested by Democrat Joan Shannon. Progressive Vince Brennan had circulated an e-mail on the issue, and, according to Shannon, questions about the timing of the ballot item were raised by Wright.

Although attendance was sparse due to the short notice, a few residents did receive sufficient notice. Both Weinberger and Independent candidate Wanda Hines were present, listening carefully as Church Street Marketplace director Jeff Nick, a self-identified TIF proponent, said that March would be “the wrong time to bring it to voters. We need time to get people familiar” with the concept.

Burlington Business Association Director Kelly Devine, who has been part of the team developing the plan, said it “could have huge benefits” but nevertheless felt that “things in the press are working against us.”

State Auditor Tom Salmon released the Milton report on Jan. 19, the second of four planned TIF audits. The first one examined Newport’s TIF last June. A draft of Burlington’s audit is circulating, but may be revised before its public release sometime in March. Winooski will be the subject of the fourth audit.

Salmon recently criticized Burlington for failing to respond to requests about its management of cash and internal controls. Councilors mentioned that the current distrust of city government, due to its handling of Burlington Telecom and other financial matters, makes passage of TIF and tax increases difficult.

The main concern expressed about bringing TIF to a vote in March, however, was that the public does not yet understand the concept. “This should not be construed as wavering support,” insisted Shannon. “We all feel it is important to the future of the city.” She described removing the item as a “small step back” so that “we can all move forward.”

Brennan also called himself as a “big supporter,” but acknowledged that “misinformation is out there.” An amendment he introduced, saying that the council could would work to make sure the proposal is on the November ballot, attracted only two other votes.

Democrat Ed Adrian blamed the Council for failing to ask enough questions. “This is a failure of leadership on our part as much as the mayor,” he said.

Another Democrat, David Berezniak, reminded his colleagues that “we knew it would be a hard sell.” He also noted that Wright did little to clarify the issue when questions were raised at a Ward 7 Neighborhood Planning Assembly meeting on Tuesday.

With the outcome of the Council vote a foregone conclusion, Wright’s main focus turned to confronting the mayor. “Take heed,” he told Kiss, “Listen to the business community.”

In his written response, Kiss repeated that a “downtown TIF district is a critical element of the City’s economic development plans. It will promote new businesses and jobs while financing public infrastructure that benefits everyone in the community. Approval of the TIF question on the March ballot will allow the City to take the next step of identifying specific downtown TIF projects. “

He noted that this approach to financing development won’t incur any city debt or force it to pursue a specific project. Any idea would have to be approved by the Vermont Economic Progress Council. Once that happened, “the City will only incur debt through another vote by residents or the City Council at a future time.”

Kiss reminded the Council that Burlington has successfully used the same financing method “to develop the Waterfront into one of Burlington and Vermont’s most important places for both residents and visitors alike, promoting business development, housing, and public access and infrastructure.”

The mayor has previously also pointed out that Burlington is among “an elite group of municipalities that have this opportunity.” Newport, Milton, Colchester and Hartford also have state approval for TIFs. Burlington has a similar district covering most of the waterfront, but the downtown TIF would give the city more latitude in developing various elements within the district.

Possible projects could include a public parking facility on the TD Bank block and infrastructure improvements in under-developed or distressed areas. The new TIF district would include at least 17 contiguous blocks, between Pearl and Maple Streets, and from Union to Battery Street near the waterfront.

Cities use TIFs for everything from demolition, planning, storm drainage, street construction and lighting to landscaping, curb and sidewalk work, park improvements, and parking structures.

Greg Guma

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