TIFs Ad Absurdum Achieved

Here at Missouri Insight, we come down very hard on the concepts of TIFs because they favor one business over another. In Illinois, the Collinsville Gateway Center takes it to the logical conclusion, asking not only for the government to collect taxes to build infrastructure for the independent business, but to help pay its bills:

Declining revenue has prompted the Gateway Center to ask the city of Collinsville to allow it to keep the city’s portions of tax increment financing funds to cover the center’s operating costs.

Under a 2006 agreement between Gateway and the city, the convention center is allowed to use TIF funds collected in the hospitality district to satisfy shortages on its bond debt. The remainder of the funds collected are to be distributed equally between the center and the city. Gateway keeps 50 percent to cover maintenance and improvement costs and the city keeps 50 percent for future development.

Earlier this month, during a City Council strategic planning meeting, Gateway Center Director Cindy Warke asked the council to allow Gateway to retain the entire amount, which averages to about $250,000 a year, according to the city’s Community Development Director Paul Mann.

To sum up: because the business cannot generate business enough to cover its bills, it’s asking the city to give it money collected as taxes.

Why is this business more special than the hotel across the highway? Because government officials have said so, and will again.

In other convention center news, Springfield, Missouri, has a convention center that it feels is underperforming:

Inadequate facilities and the lack of a connecting hotel have been cited as reasons Springfield’s Expo Center isn’t doing more business.

In a report distributed to City Council on Tuesday, city staff said John Q. Hammons Hotels’ management of the center has fallen short of expectations, as well.

“Staff does not believe the Exposition Center has been marketed or used to its maximum potential,” the report says, noting Hammons Hotels has failed to submit required reports on a regular basis.

The memo, drafted in response to questions posed by Councilman Tom Bieker, said the problems likely fall short of justifying termination of the Hammons’ management contract, which runs through at least 2028 and could be extended a decade past that.

As a result, it might seek to terminate its designated private half of the public/private partnership that is floundering and to find, undoubtedly, another private half to rain public funds on to chase the dwindling convention and conference market. And when the new management underperforms, what then? More of the same, one might expect.