Archive for the ‘Appraisals’ Category
January 6, 2015
The Cargill Pilot
Recently a reader of my blog asked me the following question.
“When a company pulls out before the end of their PILOT agreement, do they pay a penalty for not having delivered as promised? I am thinking of Cargill.”
I responded “Good Question. I will check. I emailed EDGE (Economic Development Growth Engine) and asked for a copy of the Cargill Pilot agreement. They promptly responded as follows.
email@example.com “The Cargill Lease, along with most documents, are online. See http://growth-engine.org/archive/?g=/Data%20By%20Company/Cargill
I went there online and found a number of documents about Cargill but the one that was most interesting was the following one entitled “Application Of Cargill Incorporated For Payment In Lieu Of Taxes” dated in 2010. Look at page 48 which is a letter signed by Mayor Wharton with promises of tax reductions close to $12 million and a $3 million dollar funding to assist in rail enhancements.
Then look at page 42 where Cargill would possibly provide a $500,000 funding for a school bus project in order to delay installation of equipment at Cargill to reduce their air pollution. I am not sure if they ever provided this $500,000. Does anyone out there know? Here is an article about the proposal.
Cargill is a big company and they do what is best for Cargill. They are a big employer and any city would be proud to have them as a local employer. It is best that all citizens know what is going on in the tax deals and EDGE is to be complimented for posting this information on line. However they still have not provided the critical information about properties that finish their Pilot contracts and the important information about whether they are paying the full tax amount that they were abated during the Pilot or whether they somehow left town, got an extension of the Pilot or are somehow paying less than their full share. Post that information on line PLEASE!
November 20, 2014
The Fairgrounds TDZ Zone
Here we go again with another proposed development project directed by the City of Memphis development wizard, Mr. Robert Lipscomb. Now it is the Fairgrounds involving the old Coliseum, Liberty Bowl Stadium and all the other buildings and improvements on the fairground property.
In an August 2014 article in Smart City Memphis it was stated that “the TDZ does not siphon dollars from the city’s tax base because no city general fund money is spent on the project, and in fact, it may expand the city’s tax base by increasing adjacent property values and citywide sales taxes. That’s one of the reasons we prefer TDZ and Tax Increment Financing (TIF) over PILOTs: the project pays for itself with the taxes created by the project itself. In other words, it is self-financing, but best of all; the new incremental taxes in the TDZ are predominately state sales taxes that stay here to pay for the project rather than being sent to Nashville where about 80% of it would be spent all across Tennessee.”
However here is what a Moody’s investor’s service bulletin said about a Memphis Center City Revenue Corporation’s $20.1 million Stadium project and other Tourist Development Zone projects downtown.
The current issue is ultimately secured by all non-tax revenues that are legally available, other than ad valorem revenues, in the city’s General Fund. The ratings of the bonds are based on the city’s pledge to replenish the debt service reserve fund in the event of a draw on non-ad valorem tax revenue.
My point here is that if these bonds issued for the Fairgrounds TDZ are the same as those for the downtown TDZ zone; then if the incremental tax revenue is not sufficient to cover the required bond payments, then all city revenue other than the Ad Valorem Tax (basically property taxes) will be called on to make up the difference. It is not risk free. Take a look at the attached general fund revenue sheets from the 2013 City of Memphis budget. You will see that ad valorem taxes are about 40% of the revenue. The rest presumably would be subject to the bond insurance.
September 9, 2013
Strategic Five-Fiscal and Management Plan
I have been reading through the huge five year City of Memphis Management Plan prepared by the Mayor’s Office of Strategic Planning and the PFM Group involving Rick Masson and V. Lynn Evans.
It is fascinating and full of information. It will take me some time to digest it. As I do I will let you, the tax paying public, share in the (more…)
July 15, 2013
There was an article in the CA yesterday entitled “What path to long-term fiscal health for Memphis”. The article had statements by several Council members and here is my take on their statements.
Shea Flinn: He starts off with the theory of the survival of the fittest. He states that some of his colleagues see city government as the employer of the first, second and last resort. I agree because whenever I suggest a reform evolving layoffs, most of the City Council members have a nervous breakdown. He points out that the majority of the Council refuse to face the facts.
He made the bold proposal to raise the tax rate to a level to pay for the present level of services. They refused and stuck their heads in the sand.
Myron Lowery: Myron pointed out that the $3.36 tax rate would produce the (more…)
April 29, 2013
I heard City Councilman Jim Strickland recently talking about the upcoming budget hearings. He is chairman of the budget committee. He has a tough job as it is difficult to get seven votes to pass any significant cuts.
His suggestion seems to be to put the budget beast on a diet. In other words, the County Assessor has predicted that the new property tax assessments will be down 4-1/2%. Jim wants to let the pot of property tax money fall by this amount which would mean a reduction of about 3-1/4%. The Mayor, on the other hand, wants to increase property taxes rates by 28 cents or 9%. Faced with those (more…)
September 4, 2012
For years as I drove home from work, I passed a used car lot on Lamar that had a sign that said “We Tote The Note”.
Recently I asked the City and the County for information on property taxes for the fiscal year 2011 to see who totes the note locally. I wanted to know how much is paid by residential versus commercial, industrial, farm, exempt, multi and personalty.
August 16, 2012
As I was looking at my City property tax bill due at the end of August, I ask myself the question “What is residential property tax total as a percentage of the total property tax?”.
You would think that this is a question that could be easily found online. So I went to the City of Memphis, Shelby County and the Shelby County Trustee for the answer. As of right now only the Trustee answered and I thank him and his staff for the outstanding job that they do and their (more…)
June 21, 2012
I have been investigating past PILOTS (the payment in lieu of tax program) and trying to follow up on past ending dates to see if when the PILOT ended, did the City and the County get the promised higher taxes. This has proved to be very difficult to gather this information and it should be the subject of a public report run hopefully by the County Trustee’s office. But I will give it a shot. I (more…)