Summit Denali, an out-of-town developer, has proposed that the city of Joplin fork over a share of our tax dollars so it can turn a small woodland on the edge of town into the next big commercial hub, centered around a Menards home improvement store.
The proposed name, Boomtown Central Shopping Center, should give us pause, as should the idea of handing over tax money to a big private developer while we struggle to pay for adequate police protection. Beyond city government, all taxing districts, including Joplin schools, would forfeit a portion of their revenue from the tax increment financing district until the TIF period (up to 23 years) is fulfilled.
Having rejected the first proposal, the Joplin City Council sent Finance Director Leslie Haase back to the negotiating table to get a better deal by Sept. 16. There is, however, no deal where the city or its residents come out ahead.
Tax increment financing is a scheme in which a developer can pay back loans they take out on new developments with tax money — in Missouri's case, both property and sales taxes — raised by the businesses that locate in their new development. Proponents claim no tax revenue is lost because the tax money is only siphoned off of the new development. TIF districts were originally conceived to rehabilitate blighted areas in low-income neighborhoods.
In reality, TIF districts are a mixed bag at best. The majority of TIF districts are placed in suburban locales that would have been developed regardless, or should never have been developed in the first place. Much of the “new business” they attract comes at the expense of existing businesses in the region. As a result, they often serve to suck resources out of those lower-income neighborhoods they were supposed to be helping.
Proponents of the TIF district — notably the developer who stands to benefit — claim that Boomtown Central will bring hundreds of new jobs. In reality, TIF districts generally bring in lower paying retail jobs with little opportunity for advancement. Our city is already flooded with low paying retail jobs. What we lack is an environment that attracts 21st century industries and a level playing field for locally owned small businesses — those businesses that provide significantly more prosperity to the community than big boxes.
All the TIF district gives us are a few more places to spend our meager wages. Those options are short lived though, because the competitive advantage provided by the government subsidies will help the new businesses in the TIF district drive out many of their local competitors.
It's not like we will suddenly need millions of dollars worth of additional home improvement supplies when a Menards moves to town. Much of the revenue of a new Menards would come at the expense of existing businesses. Lowes and Home Depot will probably weather the upset, but others may have a harder time.
TIF districts cannibalize cities. Although Summit Denali will build the infrastructure around Boomtown Central (paid for by tax money), the city of Joplin will bear the full responsibility for maintaining it. Maintenance will come due long before the TIF agreement expires. The cost of maintaining that new infrastructure — roads and traffic signals we did not need to begin with — will come in part from taxing the businesses outside of the TIF district. These are the same businesses that will have lost sales to the new stores in the TIF district if they haven't been forced out altogether. Boomtown Central will speed the demise of small local businesses with their own tax money.
Even if all the hoped for businesses materialize within the TIF district (and right now, Menards is the only committed player), and they did not take a dime from existing businesses (and they will), it would be hard for the city to break even on maintenance expenses. The only winner in this game is Summit Denali.
There are places in Joplin that genuinely suffer from blight and could use some TLC. North Main and East Town come to mind. Unlike the proposed Boomtown Central (which is anything but central), developing these centrally accessible locations would add value to our already productive places, promote walking and biking, and make public transit more feasible. But this will never happen as long as we keep taking our cues from out-of-town developers looking to make a quick buck. It is time the people actually living in Joplin and their elected representatives take back control of development decisions so we can build the city we actually want to live in with a stable financial future.
Zach Spiering lives in Joplin.