SIOUX FALLS, S.D. (KELO.com) -- Under the Mike Huether Administration, critics of the Mayor's use of tax increment financing--TIFs--said they were used on projects that didn't need a subsidy.
One example is the Falls Park West development, where even Minnehaha County Commissioner Jeff Barth expressed opposition as well as some citizens.
But as often as TIFs have been used by the City, Sioux Falls is not the leader in the number of TIF projects in the state, according to a recent state report. Rapid City led the state with 24 active TIF projects, Aberdeen was second with 18 and Sioux Falls third with 14.
However, Sioux Falls has a new mayor, Paul TenHaken. His chief of staff, Erica Beck, used to be an executive with Lloyd Companies, a local developer which has received TIFs for projects.
Still, Beck says scrutiny of TIFs and TIF funded projects is good.
"I think that there's always been a need to justify the use of TIFs within Sioux Falls, and rightly so," Beck said.
Beck says part of the issue is that the public doesn't always understand how TIFs work and why some projects are good candidates for TIFs. She says the City is going to do a better job in informing the public about projects, talking to stakeholders, and getting public input.
"Is there a clear understanding of how TIFs can move our community foward?" Beck said. "We'll have that conversation with the City Council and the public."
Beck says in Sioux Falls, the City has had an opportunity historically to utilize TIFs as a tool for economic development and to address development efforts where there was a great deal of blight or extraordinary development costs.
"I think the beauty of the TIF program in South Dakota is that the statutory requirements allow for a great deal of flexibility," Beck said.
She says after the budget process this fall, expect and education and input campaign by the City on TIFs.
According to a position paper by the Minnesota House of Representatives, TIFs use the increased property taxes that a new real estate development generates to finance costs of the development. For a more detailed look at how TIFs work, click here for analysis by the Lincoln Institute of Land Policy.
Click above to listen to the full interview.