Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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A U G U S T 2 0 1 7 / S C T 29 to perform as you hoped it would." Nonetheless, Gibbs is bullish on realistically structured TIF financing. "The basic model really works well," he said. "There are probably thousands of TIFs across the country that have performed as well as or better than expected. They give the community new assets and amenities, with a nice financial return." These days, in fact, the majority of mixed-use town centers built in urban areas will involve a public-private part- nership of some kind, Gibbs says. "It has become pretty stan- dardized that a TIF, or some sort of public financing, will help finance about 20 to 30 percent of a large, mixed-use town center," he said. "But I have seen it go as high as 50 percent." The second edition of the TIF guide provides an in-depth look at the financial structures and other details of 24 new case studies, including shopping centers, urban mixed-use projects, brownfield redevelopments, transit-oriented de- velopments and more, Kramer notes. The book also includes new information on how TIF can be used in conjunction with special-assessment districts to bolster funding and reduce risk. "Tax increment financing is being used more and more along with special-assessment districts or techniques," Kramer said. "We wanted to be sure our best-practices guide reflected the combination of those tools. The guide walks readers through what it would look like to use tax increment financing with a contributions from 32 experts. The first edition, published in 2007, needed updating in part because of changes that came in the wake of the recession, including new state and local regula- tions designed to make TIF more transparent, Kramer says. For many TIF-backed projects created in the years preced- ing the recession, overly rosy assumptions about the economic future led to disappointing results, says Robert J. Gibbs, presi- dent of Birmingham, Mich.–based Gibbs Planning Group. "A number of them were built, but failed," he said. "They didn't deliver what they promised, because it seemed at the time as though the economy would never slow down." Gibbs, who teaches urban mixed-use development at Harvard, is now working with the city of Troy, Mich., and with real estate firm Core Partners to develop a master plan for 127 acres in down- town Troy. The site includes City Hall and several other munic- ipal buildings. Initial plans for the project, which is likely to include TIF funding, call for new stores and restaurants, a 300- room hotel and some apartments, condos, town homes and other residential buildings. In developing a pro forma for such a project, it is critical to be conservative about its performance, says Gibbs. "We recommend that you always plan for at least one recession during the lifecycle of a TIF," he said. "We as- sume there will be one recession every 10 years. You have to count on a three- or four-year period where it is not going TAX INCREMENT FINANCING REMAINS A VITAL TOOL FOR HIGH-PROFILE PROJECTS BY JOEL GROOVER good TIF was approved for some infrastructure and residential construction around Easton Town Center, in Columbus, Ohio