TIF Financing and the John Kane Issue in Raleigh

While there are many topics right now that I should be blogging on, I keep getting this urge to weigh in on the North Hills development issue that keeps making the news here in Raleigh. For those reading this outside the area let me briefly explain the issue. John Kane is a very successful, wealthy developer who has remade the North Hills Mall by investing and recreating the area. Now he's moving his efforts across the road to add more new construction both business and residential. Fine so far, but he'd like the City of Raleigh to help him by using Tax Increment Financing (TIF) bonds to pay for the construction of a massive parking deck for his development.

Now first and foremost I was opposed to the Amendment 1 proposal in 2004 that allowed TIF bonds and removed the right of the voters in a community to approve or disapprove of the indebtedness. In fact the NC Institute for Constitutional Law has a lawsuit on appeal to the US 4th Circuit Court of Appeals challenging that process. So it may seem both strange and inconsistent that I rise to speak up for Mr. Kane. Let me explain why.

First, is the inherent inconsistency of the City of Raleigh's policies toward incentives (which TIF bonds are). There seems to be no problem with giving tax dollars to RBC to move from Rocky Mount to downtown Raleigh or subsidizing a new hotel in competition with others around the area, just to name a few. Also, there is a great inconstency and just plain unfairness to the state giving subsidies to Google, Goodyear, Dell....you name it, and then telling John Kane, I'm sorry your economic investment isn't important enough and the jobs you create don't really count.

And where are all of those business leaders who pushed so hard for Amendment 1 to pass just so investors and developers like John Kane could use TIF bonds to spur development in areas with an existing low tax base? Somehow all of this just smells of special interest, political influence, and shifting policies that allow for the elected leaders to pick and choose who gets subsidized by our tax dollars. It's a bad public policy and subject to abuse and I wish John Kane, someone that I suspect at heart is a good free market competitor, would hire an aggressive group of lawyers and take this case to court.