Inappropriate Establishment of a TIF District

It's Inappropriate to Establish a TIF District for the Development of Land That Is Empty

A city's economic development council (EDC) should establish a TIF district where economic activity already exists

It's inappropriate to develop the Grain Valley Marketplace northeast of the I-70 interchange using TIF funds.

This special taxing district is useful to existing business people because it spreads the costs of improvements over a repayment period of 15 to 20 years.  When the properties generate an increase in property taxes, the property owners in the district are assessed payments from this incremental increase to pay off the revenue bonds which the city sold for the district.

Instead, the City of Grain Valley is using the TIF district almost entirely for speculation that new businesses might establish themselves.  Only one existing (and successful) business, McShop, is within the TIF district.

In the City of Grain Valley, the authority for this district is the Grain Valley Industrial Development Authority, MO.  This public/private venture is an administrative organization.  It is financed by the City of Grain Valley, which bears the ultimate financial risk of development and redevelopment.

City taxpayers, though, immediately begin to pay interest to the investors who bought the bonds.  This is like your 30-year mortgage.  Your monthly payments are almost entirely interest.  You'll notice that you acquire equity in your home at a rate that is much slower than the actual monthly mortgage payments that you've been making.