Evaluating Incentives Using an ROI Approach
You’ll learn about:
- What constitutes a smart incentive and unwise incentives using a tax-based approach.
- How to determine the amount of tax revenue on a square-foot basis for a proposed development.
- How to estimate the unfunded infrastructure liabilities of a municipality and how this knowledge can be used to set proper expectations for the use of incentives within a community.
As budgets get tighter, incentives are facing closer scrutiny. Explore how communities are addressing this through an ROI approach to viewing land within a municipality. The City of St. Louis' innovative approach is the case study on estimating the needed tax return on developments that utilize various incentives tools.
First is a discussion of the challenges and opportunities facing municipalities in today's post-Great Recession environment. Using available data, panelists determine the estimated amount of property, sales, earning and payroll tax generated per square foot of land in the City. The City of St. Louis model aims to differentiate the tax value per square foot of land based on its geographic location within the City (neighborhood/ZIP Code) its land use designated according to the Strategic Land Use Plan (SLUP), and its classification for tax assessment purposes (commercial, residential, or exempt).
The model also includes an effort to estimate the currently unfunded infrastructure liabilities of the City. Combining the estimated taxes generated per square foot, with this estimate of unfunded liabilities, the model then goes on to estimate how much city revenue needs to be generated per square foot in order to fund all of its unfunded infrastructure liabilities. An intermediate session for experienced planners.
, St. Louis Development Corporation
, St. Louis
Confirmed SpeakerJonathan Ferry has 11 years experience in the field of economic development, and is currently serving as Financial Analyst and Major Projects Managers for the City of St. Louis, through their economic development agency, the St. Louis Development Corporation (SLDC). In his time with SLDC, Jon has developed an intricate, yet reproducible, system for analyzing projects that request incentives, which works to ensure that incentives are used responsibly, and only in ways that will ultimately grow the local economy, and not just shuffle business from one place in the city to another. This system is designed based on the premise that, in order to be financially sustainable, cities must think in terms of the amount of tax revenue that is generated per acre of land in the city. Using publicly available data, he created an algorithm that estimates the amount of tax revenue that needs to be generated by any given parcel of land in the City, the amount of which varies based upon the geographic location within the City (by neighborhood) and the land use of the property in question. This has allowed the City to evaluate proposed projects to ensure that their economic productivity is sufficient to merit incentives, and also to ensure that the amount of the incentive is not excessive. Outside of work, Jon enjoys living in the City with his wife and two daughters. He holds a Master's degree in Economics & Finance from Southern Illinois University, and he seldom passes up an opportunity to settle down with a good book.
, Saint Louis University
, Saint Louis
Confirmed SpeakerDr. Sarah Coffin is an associate professor in and director of urban planning and development program at Saint Louis University in the School of Social Work. Trained as an urban planner, Dr. Coffin’s work has focused on the impacts of brownfields on weak market economies and the role that common development tools like tax increment financing and tax credits play in local economic development planning practice in these post-industrial regions. She has published work that examines the impacts of brownfields, vacant properties, and more recently development incentives on weak market economies and whether new ways of framing the redevelopment question might provide positive benefits for distressed communities. Dr. Coffin holds a PhD in City and Regional Planning from the Georgia Institute of Technology, a Master’s degree in Urban Planning, Design, and Development from the Maxine Goodman Levin College of Urban Affairs at Cleveland State University, and a Bachelor of Science degree in Business Administration from Lake Erie College. She is also a member of the American Institute of Certified Planners.
, St. Louis
Confirmed SpeakerAndrew Z. Murray, AICP, LEED GA, has a decade of experience working for communities and projects with particularly complex and challenging issues, requiring innovative and collaborative strategies to bring redevelopment and revitalization. His projects have encompassed transit-oriented developments, brownfield issues, historic preservation, and both urban and suburban redevelopment contexts. His experience includes authoring neighborhood, regional, redevelopment, transportation, and bicycle / pedestrian plans. Andrew’s range of interdisciplinary experience has given him the opportunity to draft model policies and best practice guides for sustainable development, community engagement, and redevelopment in rural communities, small towns, and urban settings. Andrew assisted the City of Joplin with the creation of the largest redevelopment area plan in the State of Missouri to rebuild after the May 2011 tornado. Most recently, he was part of a team assisting the State of Missouri in developing a program for post-Ferguson economic development and also creating a corresponding cost-benefit analysis for its application to the National Disaster Resilience Competition for North St. Louis County.
, Peckham Guyton Albers & Viets
, Saint Louis
Confirmed SpeakerAndy Struckhoff, DFCP, AICP is the Associate Director of the Planners group at PGAV, Inc. (www.pgav.com) Mr. Struckhoff consults regularly with developers, elected officials and government staff to help them develop policy and financial solutions to challenging planning and development situations. He has written revenue studies for more than $600 million in bonds supporting more than $2 billion in real estate development across the country. Whether helping a municipality create policy for the use of statutory finance tools, helping a developer navigate and negotiate tax incentives, or helping a municipality vet a developer’s proposal, Mr. Struckhoff’s objective is to create situations where the public and private entities in a partnership each achieve their desired goal: a sustainable development project that benefits each entity’s bottom line.