Thursday, April 16, 2009

Developers being given money and tax breaks at Filene's

How does Boston reward developers who open gaping wounds in downtown Boston and start projects with out proper financing? By rewarding them with grants and tax breaks. The current tally is:

Gale & Vornado now want $262 million in subsidies to finish their $700 million One Franklin (a.k.a. “Filene’s”) project:

$200 million in federal Recovery Zone bonds and city DIF tax breaks
$ 50 million from Empowerment Zone tax-free bond loan
$ 12 million waiver of required linkage payments

$262 million

Gale/Vornado’s DIF and linkage subsidies would be pure gifts, from the taxpayers to the developers, that the developers never repay, and that taxpayers repay for them.

DIF's are District Improvement Financing which basically means that a developer can use his future real estate taxes to pay for the improvements to his own property and immediate surrounding area. So, instead of a development adding taxes to the tax base, essentially the citizens pay the tax for the burden that additional development puts on the city resources.

I sure wish when I did a development I could use my taxes to pay for the improvements to my driveways, yards, etc. and not send a check to the City. But, I'm not rich and connected like the vast majority of us, so I just have to pay my taxes and make sure the business deals I get involved with make sense without government bailout.

City Council needs to hold a public hearing, and advocates for this bail-out need to disclose the real, total cost.

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