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Show Bureaucratic Accountability: A Look at Utah's Redevelopment Agencies Adam Caldwell also saves the taxpayer money because if this law did not exist, it would be the taxpayers in general who most likely would compensate the property owner for this loss. What must be avoided is a situation where RDAs do not have the power of eminent domain, and are not limited to paying market price for properties. This circumstance would be worst of all worlds for the taxpayer, since RDAs might be compelled to pay unreasonable prices for properties (SLCA 1991, 25). An absurd example to make the point clearly is a situation where a person gets tipped off that a redevelopment project is taking place for a new sports arena. That person then buys one square foot in the middle of the project and a year later when the developer offers to buy that square foot, the owner demands $1 million for that property. Such behavior would either kill the entire project or the taxpayer would have to bear the ridiculous expense for that square foot. Although such an extreme never could happen, lesser examples are possible. Despite the opposition of many property owners, the power of eminent domain should be considered one of the many necessary evils in life. Although many legislators are passionately opposed to eminent domain, there is simply not enough support among legislators to take away this power. One possible compromise that has not been suggested would be to give this power of eminent domain solely to the Utah Legislature. A legislative committee could then make the decision whether to use this power after both sides have presented their case. These cases could be presented during the regular legislative session or at the monthly interim committee meetings. While the cities or redevelopment agencies certainly would not go for such an idea, it is a possible compromise that state legislators could examine. A second suggestion comes in the area of actual expenditures and the taking of tax increment financing. Examples were previously mentioned in which the redevelopment agency went way over budget from its initial proposals. This could be tightened by requiring actual dollar limits on the amount that can be taken in tax increment financing, not just limitations on the number of years. A majority of states that the Salt Lake County Auditor's office examined require estimates on project expenditures to be part of the plan. This would then set binding limitations on how much tax increment the agency could take. A third proposal deals with the economic aspects of the problem. Much of the debate concerning the economics of a project involves claims that the projects result in a net loss of revenue for the school districts. While a particular city could benefit from a redevelopment project, the county as a whole and the school district could come out on the losing side. School districts long have been opposed to redevelopment agencies. In one of the public schools' many lobbying efforts against redevelopment plans, the Salt Lake City School District's Business Administrator, Gary Harmer, argued the following about a specific redevelopment plan for blocks 34 and 39: I have only one simple point to communicate to the Redevelopment Agency__ It is clear to me that this property would he redeveloped without financial aid from the Redevelopment Agency, and I see no reason why the school district should relinquish its rights to the property tax assessed on this development. The school district has great need for this tax revenue and that tax revenue should not he given to the City Council to use for downtown development housing or any other purpose. The need for educational services in this city is as great as any other public purpose (Harmer 1995). Although school board representatives recently have been added to the Taxing Agency Committee that approves tax increment financing, giving both the county and school district veto power could eliminate this argument. Tennessee requires both city and county approval for a project to take place that involves tax increment financing, while Kansas gives school districts a 30-day time period in which they can veto a redevelopment project if they believe it will have a net negative impact upon their school district (SLCA 1991). Giving both counties and school district veto power would dampen much of the most heated arguments. If a specific project would have negative financial effects on the county or school districts then it would be up to the redevelopment agency or developer to present compensation that would ease their concerns. A final proposal is to reduce the limit on the maximum percentage of taxable value. Utah's current rate is set at 15 percent of locally assessed value. Many feel this is too high. Both Wisconsin and Arizona have set limits on total value of tax increment financing at 5 percent of the total taxable property within the city. South Dakota has limits according to the size of the city. The smaller cities can go as high as 12 percent, medium sized cities 10 percent, while larger cities' maximum is 5 percent (SLCA 1991). There is no foreseeable reason why a common ground could not be reached in the 10 percent area. This would return 5 percent of the total taxable area to the school districts while still allowing for substantial redevelopment. Summary No one wants an abandoned gas station in the middle of a city that poses an environmental hazard. At the same time, people do not want to lose their individual property rights just because a big developer happens to develop a project that includes their property, without them having a fair say in the matter. This paper has attempted to further analyze this delicate relationship. The use of Burke's typological approach has provided a better understanding as to what one could expect from an agency which falls within the boundaries of Cell III, as do Utah's redevelopment agencies. From assessing redevelopment agencies, it is clear that more can be done to increase their accountability. Any such increase will not m |
