Controversial tax break vote deferred

Hours before the City Council was set to vote with no prior public discussion on a tax incentive program that forgives developers for property taxes, the council deferred the vote for two weeks after public outcry.

Critics praised their elected officials for delaying the vote and then asked to meet with council members either publicly during their committee meeting or one on one to express their concerns with the revamped payment-in-lieu-of-taxes, or PILOT, program.

“We’ve been asking for transparency and accountability,” said Eric Atkins, secretary of the NAACP and a member of the watchdog group Accountability for Taxpayer Money. “We think this decision is a good start in that direction.”

A growing number of property owners and special interest groups who are concerned about tax incentives spent months calling for reform before Mayor Andy Berke announced in mid-July that he would make significant changes to the program, severing a formal agreement with River City Co. The program offers 10-year tax breaks to developers building rental property downtown who set aside a portion of their units at an affordable rate.

The controversy has centered around whether the public is benefiting from forgiving potentially millions of dollars in taxes to developers. Critics have said the bulk of the new housing was market rate and only a small share were affordable units the incentives were supposed to achieve.

At the time of the announcement, Berke couldn’t offer specific details about his new program, but his staff said the changes wouldn’t require a City Council vote.

Yet nearly two months later, a resolution was placed on the City Council agenda for a vote on Tuesday.

Members of the watchdog group ATM have been asking the mayor’s office and other city officials when the changes would be available to the public and were surprised to find the resolution on the agenda.

City Council members decided Tuesday they will hold a hearing in two weeks during the Economic and Community Development Committee meeting to talk about the changes to the PILOT program.

Under the old program,

developers were required to set aside 20 percent of their rental units at 80 percent of the area median income. The proposed changes would extend that requirement to half of their rental units at the same income level.

Berke’s director of economic and community development, Donna Williams, said the new guidelines are much better and create more incentives for developers who are willing to rent to residents who make less than the required median income.

While developers under the new requirements will have to set aside more of their rental units, Helen Burns Sharp, a retired city planner and founder of the watchdog group ATM,

said the new standards still don’t benefit low to moderate income residents who still won’t be able to afford to pay those prices.

“We don’t believe the current proposal goes far enough,” Sharp told the Council during the meeting.

Councilman Chris Anderson said he would be happy to meet with Sharp and anyone else to talk about the PILOT program, but he wouldn’t give them time to speak during the committee meeting. Anderson said because of public interest in this issue, he’d like to give residents more time to weigh in.

Contact staff writer Joy Lukachick Smith at jsmith@times freepress.com or 423-757-6659.