August 24, 2000

The New TIF District:

The Good, The Bad And The Ugly

By Jon A. Brake

What about the two new TIF Districts that the City of Manhattan wants? Is it good? Is it bad?

The answer is "yes", and there is even room for ugly.

The Good:

The two new TIF Districts are meant to help relocate Steel and Pipe from North Third Street into the Industrial Park on the
East Side. It will also take out many older homes and older business buildings.

Steel and Pipe has negotiated a contract of sale with the developer. They should have received what they feel is a just
compensation for their property.

If the East Side TIF District is developed Steel and Pipe should receive another benefit. The TIF money will be used by the
City to purchase the land for Steel and Pipe. The real estate taxes paid by Steel and Pipe will be used to pay the City Bonds
for the land.

Two large stores like Target and Lowes will anchor the Third Street District and the East Side District. The development
could provide space for twenty to thirty smaller stores.

A new development will help the looks of Downtown Manhattan.

The Bad:

There are many bad points about this TIF District.

The two biggest drawbacks are (1) the location of the East Side TIF District and (2) The inclusion of the Manhattan School
Districtís Kitchen and Bus Barn.

Ten years ago the City of Manhattan and the Manhattan Chamber of Commerce make a new Industrial Park a top priority.
The East Side Industrial Park was full and they needed to spend millions to develop a new park.

We have a new Industrial Park west of the Airport and now the City want to destroy half of the older East Side Park. Why?

Thirty small businesses will be taken by the East TIF District and they will not have a place to relocate. The cost will be
tremendous. Why put in an Industrial Park and then move half of it?

The Manhattan School District property is a puzzle. Why is this property in the District? The School District does not pay
real estate taxes, so the value will not help pay for the redevelopment area. The property to the north is not in the TIF
District, so why is the School District?

City officials told the Manhattan Chamber of Commerce that the School District had just build a new million dollar central
kitchen on the property and it would not be taken. They also said that the School Board would have to approve of the TIF
District. If the Board members thought their property would be condemned they night not approve.

But, the question is still why put the Bus Barn and Kitchen in the TIF District? After the City, County and School Board
approve the TIF District any property can be condemned by the City and taken for redevelopment.

If the School Board approves of this TIF District they are open for condemnation.

The Ugly:

What is ugly about any TIF District is the remove of people and businesses.

City Commissioners like to tell the public that "They will be paid at Fair Market Price." What does that mean? Nothing!
What is fair to the City Commission may not be fair to the business. Just because a businessperson is paid for the land,
building and for moving, does not mean it is fair.

And the thing to remember is that sometimes a business is forced to move but business does not move with them. They may
not make a living in a different location.

Many times a TIF District is used to purchase land for a developer because to purchase the land direct would be too
expensive.

The businesses on Third Street and the businesses in the Industrial Park have been approached by real estate developers in
the past. The cost would have been high. With the TIF District, the developer can name a price and if the owner does not
like the price, he must fight it out in court. And that can be ugly.

Something should be said about Wal-Mart. Wal-Mart will start construction on a new Super Store this fall. For the past two
years they have purchased several properties. They paid cash for their land and 100% of their tax money will go to the City,
County and School District.

A TIF District has some good; some bad and it can get ugly.