I must say that it's fun seeing a business guy with fire in his eyes for a public cause. Which is what I saw last week in Gregory Poole Sr., the moving force behind the group called the Dix Visionaries. Poole is determined that the Dorothea Dix Hospital campus, if and when the state is willing to sell the land, should become a great destination park for Raleigh. Meaning, in other words, not like the shrunken park proposed in the Urban Land Institute (ULI) plan.
A few words about Mr. Poole. He grew up on Poole Road. He went into business as a Caterpillar dealer in 1951, and today Gregory Poole Equipment Co. is one of the biggest such construction outfits in the Southeast. Point being, he's moved a lot of dirt in his time and made a lot of money doing it, and a lot of his friends are developers. So when Mr. Poole says all of Dix should be a park, and none of it developed, the developers listen—as they did last week, along with their bankers and other persons of means, when Poole called a meeting to unveil the Visionaries' plan. .
Actually, he held a series of meetings so every City Council member could see the Dix Visionaries' plan without being in the same room, which would violate the open meetings law (Mayor Charles Meeker having refused Poole's request to show the plan at a public meeting).
Two things about it:
On that second point, I listened hard as Greg Hummel, a tax lawyer and TIF expert brought in from Chicago, explained why tax-increment financing would make sense for Dix, and I'm sure he was right, except for one thing. Hummel said repeatedly that Raleigh should only use TIFs for "important public improvements and infrastructure," and not to "subsidize unduly private-sector development."
Oh, that Raleigh had any history of distinguishing the one from the other.
The best thing about the Visionaries' plan is the way it imagines a Dix Park framed on its western boundary by high-rise housing up on Spring Hill. That's the eastern edge of NCSU's Centennial Campus that ULI proposed be added to Dix (part of it, anyway) in a swap for the portion of the Dix campus known as the Big Field (see "Imagine Dix," Nov. 29, 2006, www.indyweek.com/gyrobase/Content?oid=oid%3A40782).
Turns out, NCSU isn't interested in swapping, and surely the reason is that it would be calling out a hornet's nest of public opposition if it tried to then build on the Big Field, as ULI recommended; whereas if NCSU develops up on Spring Hill, it can build bigger, better and with the public cheering it on.
By the way, I am henceforth going to join the Visionaries in calling the back 56 acres of Dix the "Great Field," because it isn't just big, it's—to quote park designer John Hoal, who came from St. Louis—"spectacular" and the key to a successful destination park.
(This in contrast to ULI's landscape guy, who said the Great Field had "no intrinsic value.")
But back to Spring Hall. Let's say NCSU partners with a developer, and they put up 1,000 condos, profiting handsomely. Let's say, further, that the whole thing has a tax value of $500 million. That's $500 million taxable dollars, versus the zero taxes paid by tax-exempt NCSU today. It translates to some $5 million a year in property taxes that Raleigh and Wake County would be collecting that they don't collect now—and voila, there's your tax-increment.
Now with tax-increment financing, what happens, according to Hummel, is that the public doesn't have to buy Dix, because private investors will buy it for us, "shifting the risk" from us to them—albeit not for free. How's that work? Simple. Raleigh issues bonds—TIFs—but instead of promising to pay them back with interest out of general revenues, it promises only that it will pay them back if the tax-increment associated with Dix is sufficient to do so. At higher interest, naturally.
So a "TIF district" is drawn around Dix, and as taxes go up in the district, the extra money goes first to repaying the TIFs.
Just to be on the safe side, the Visionaries' district would include everything within 10 blocks of Dix, about 5,000 properties. Over time (and TIFs can be issued for up to 30 years), they'd increase in value by some $2 billion—plenty to repay the bonds.
But that's exactly why Raleigh should not TIF this project. A "destination" Dix Park will absolutely drive up property values around it, and be worth whatever the city has to pay without any need to "shift" a risk that is, in fact, non-existent.
Ask the voters to approve a general-obligation bond issue for Dix. They will. No doubt about that, either.
Meanwhile, though, developers are waiting in the wings with their own TIF plans if this first one goes through. You already know about John Kane's pitch to the City Council for $75 million to pay for his parking decks at North Hills—not a public purpose. Now, as if drawn to the honey, comes a letter to council, dated Jan. 19, from the Soleil Center's would-be developers, Dicky Walia and Sanjay Mundra.
No, they haven't given up at all on their 42-story tower at Crabtree Valley, they write (despite their apparent lack of progress). But they, too, need a parking deck, and if Kane gets his TIF, they want theirs. "Otherwise," they say, they'll be "at an economic disadvantage in competing with North Hills East."
Can Raleigh say yes to a Dix TIF and no to Kane and the Soleil boys?
I do doubt that.
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