Iliches trying to fleece us for another $800 million.

[Richard]

You do realize the taxpayers haven't paid anything. We are talking about credits against future taxes that would be paid if developed without the incentive. Note - no incentive, no development. The money isn't coming out of anyone's pocket.

Its just fancy words,you do know once tax credits are approved,they have a cash value on the market,it’s the corporate tax credits that are the unknown.

Thats how a lot of these projects get done,the tax credit guarantee is sold for up to .75 cents in the dollar in order to provide a bridge funding until the project is completed and they can switch to conventional funding.

They cannot predict future taxes,so tax credits are in essence a loan in advance paid by the taxpayers.

Name one company that has ever reimbursed any city in the country for failure to perform when it comes to tax credits,lots of cities have tried and spent even more money in lawsuits,which would have never been necessary if it was as promoted based on future taxes.

Simply because if it was based on future taxes the cities would not be suing to claw back for non performance.

Once that amount is approved,it’s already drawn on.

The taxpayers are the bank,cutting the check today in hopes that the company will still be around.

The company is collecting the credits,selling them on the market and then paying the note off out of pocket out of future proceeds as long as the company can support the note,if they cannot,what can you do? Nothing.

Its creative financing.

The city is better off loaning the company the money at a market value interest rate,or higher then considering it is high risk,as it is,it is free money to the company.

But it is illegal for the city to play bank,so somebody that makes a lot of money sat down and figured out how to play the bank without actually being a bank and they called it tax credits.

You loaned them the money,it has been spent,you have not received their end of the deal and performed as agreed,they did not put collateral up so in layman’s terms,you are screwed,if that was you,the bank would have you sleeping in the streets as they took everything you owned to pay it back.

Its a very valid concern.

You borrowed the $800m based on future taxes to pay it off,you are liable for it to be paid back for the next 30 years you are the loaner and the debtor,are you comfortable with that?

using the word “you” is not directed at you personally,but if you as in you personally are a city taxpayer then,yea you owe yourself $800m,no interest,lucky you and you already have been paying yourself back,check was in the mail.

Fo not worry if you are having a tough time paying it back,you can always increase the taxes on yourself in order to make it more comfortable to swallow.

Sense you put up the money to build the project,with no interest,do you at least get a cut of the profits once the project is completed,no.

The irony of it all,you are paying interest on money that you loaned out that you cannot collect interest on in return.

[drjeff]

Its just fancy words,you do know once tax credits are approved,they have a cash value on the market,it’s the corporate tax credits that are the unknown.

Thats how a lot of these projects get done,the tax credit guarantee is sold for up to .75 cents in the dollar in order to provide a bridge funding until the project is completed and they can switch to conventional funding.

They cannot predict future taxes,so tax credits are in essence a loan in advance paid by the taxpayers.

Name one company that has ever reimbursed any city in the country for failure to perform when it comes to tax credits,lots of cities have tried and spent even more money in lawsuits,which would have never been necessary if it was as promoted based on future taxes.

Simply because if it was based on future taxes the cities would not be suing to claw back for non performance.

Once that amount is approved,it’s already drawn on.

The taxpayers are the bank,cutting the check today in hopes that the company will still be around.

The company is collecting the credits,selling them on the market and then paying the note off out of pocket out of future proceeds as long as the company can support the note,if they cannot,what can you do? Nothing.

Its creative financing.

The city is better off loaning the company the money at a market value interest rate,or higher then considering it is high risk,as it is,it is free money to the company.

But it is illegal for the city to play bank,so somebody that makes a lot of money sat down and figured out how to play the bank without actually being a bank and they called it tax credits.

You loaned them the money,it has been spent,you have not received their end of the deal and performed as agreed,they did not put collateral up so in layman’s terms,you are screwed,if that was you,the bank would have you sleeping in the streets as they took everything you owned to pay it back.

Its a very valid concern.

You borrowed the $800m based on future taxes to pay it off,you are liable for it to be paid back for the next 30 years you are the loaner and the debtor,are you comfortable with that?

using the word “you” is not directed at you personally,but if you as in you personally are a city taxpayer then,yea you owe yourself $800m,no interest,lucky you and you already have been paying yourself back,check was in the mail.

Fo not worry if you are having a tough time paying it back,you can always increase the taxes on yourself in order to make it more comfortable to swallow.

This is absolutely, 100% wrong. The city of Detroit is not "paying" anyone to get these projects done. GPCharles is correct. At this point these credits are imaginary money. If the project is completed, then the amount of tax that would normally be paid on that property is lessened due to the credits. So you could call it a loss of future income to the city if the project is completed but it is not a net loss of any of the city's dollars that already exist at any point in time.

[Richard]

This is absolutely, 100% wrong. The city of Detroit is not "paying" anyone to get these projects done. GPCharles is correct. At this point these credits are imaginary money. If the project is completed, then the amount of tax that would normally be paid on that property is lessened due to the credits. So you could call it a loss of future income to the city if the project is completed but it is not a net loss of any of the city's dollars that already exist at any point in time.

You are telling me that I am 100% wrong that tax credits are not or cannot be used for or as bridge loans.

You do realize it is something that is easily searched in order to verify.

Do you understand or have knowledge of how these big projects are funded?

The $800m did not come from one spot,it’s a combined total from multiple sources that all contain tax credit incentives to total the $800m.

No business in the world bases operations in imaginary money,once the city makes that commitment on paper it becomes a legal document,and used as leverage.

Unless it specifically reads Non-transferable,but they did not mention that,if it does not specify that,as soon as the city signs,it has cash value and like a check,once it is cashed,the city owes the money,no difference if you write a check to somebody,unless you tell them it is imaginary money and see how that goes.

Yes,somebody will be collecting it in the future,but odds are it will not be the one who you issued it to.

Quicken loans is a big force there,call them and tell them that you want to do a bridge loan using tax credits to purchase and rehab a building and report back.

That guarantee is money in the bank the day it is issued.

A decent chunk is also “captured” by the city’s Downtown Development Authority [[DDA). The authority has just that — state law gives it the power to seize a percentage of the revenue raised by Detroiters’ property taxes to give subsidies to developers in the greater downtown footprint. That’s revenue that could help pay off the district’s substantial debt, allowing it to focus on building upgrades sooner.

https://outliermedia.org/tax-capture...t-ever-sunset/

That article gives you a little window into it all and tells you as a city of Detroit taxpayer,you do not have much of a say in the matter,it’s the state.

It’s not imaginary money they are handing over,it is cash out of pocket based on future property tax collections.

[Henry Whalley]

[QUOTE=Richard;631686]You are telling me that I am 100% wrong that tax credits are not or cannot be used for or as bridge loans./QUOTE]
tldr

[Richard]

[QUOTE=Henry Whalley;631691]

You are telling me that I am 100% wrong that tax credits are not or cannot be used for or as bridge loans./QUOTE]
tldr

Its people like you that helped screw up the city with attitude.

You do realize that 95% of all of these big deals coming online will be economically removed from the tax rolls for the next 25 to 30 years?

Including corporate taxes?

So not only are you paying the note you are having to cover the loss of the corporate taxes plus having to cover the loss each year because of the properties pulled offline.

The city of Detroit was paid a lump sum of $25m for the property used for the new bridge to make up for the permanent loss in property taxes over there,that’s equal to 5 years of property taxes in exchange for a future cities lifetime of the ability to collect any taxes,corporate or property,gone forever.

The city has a 2.5 billion dollar budget and you got a 1 time payment of $25m,you have broken even now as it’s been 4 years,so now you are losing $5m a year.

Thats 5 million more a year extra that the taxpayers have to come up with to make up for the loss,on top of also losing a majority of the revenue for every project that has also come online now and in the future at this rate.

All of these politicians are not going to be around in 25 or 30 years they are done in 4-8 years.

yep tdlr is the answer.

What is your breaking point ?

That point where the taxes become so much of a burden on the average taxpayers that they just give up and jump borders to the burbs or even worse out of state,which in turn raises the taxes on the ones left.

The debt does not go away.

O sorry,its already happening.

TDLR

Detroiters are not running the city and determining its future,the state is,really no point of going through the motions of holding local elections,those you have elected are as quiet as a church mouse and the city is a ward of the state.

I guess if people are comfortable with that and have bottomless wallets,it remains what it is.

[drjeff]

[QUOTE=Richard;631697]

Its people like you that helped screw up the city with attitude.

You do realize that 95% of all of these big deals coming online will be economically removed from the tax rolls for the next 25 to 30 years?

Including corporate taxes?

So not only are you paying the note you are having to cover the loss of the corporate taxes plus having to cover the loss each year because of the properties pulled offline.

The city of Detroit was paid a lump sum of $25m for the property used for the new bridge to make up for the permanent loss in property taxes over there,that’s equal to 5 years of property taxes in exchange for a future cities lifetime of the ability to collect any taxes,corporate or property,gone forever.

The city has a 2.5 billion dollar budget and you got a 1 time payment of $25m,you have broken even now as it’s been 4 years,so now you are losing $5m a year.

Thats 5 million more a year extra that the taxpayers have to come up with to make up for the loss,on top of also losing a majority of the revenue for every project that has also come online now and in the future at this rate.

All of these politicians are not going to be around in 25 or 30 years they are done in 4-8 years.

yep tdlr is the answer.

What is your breaking point ?

That point where the taxes become so much of a burden on the average taxpayers that they just give up and jump borders to the burbs or even worse out of state,which in turn raises the taxes on the ones left.

The debt does not go away.

O sorry,its already happening.

TDLR

Detroiters are not running the city and determining its future,the state is,really no point of going through the motions of holding local elections,those you have elected are as quiet as a church mouse and the city is a ward of the state.

I guess if people are comfortable with that and have bottomless wallets,it remains what it is.

This is so full of idiocy I can't respond to it all, but it's rich you think that land Detroit owned was somehow generating tax dollars [[the city does not pay itself taxes on it's own property, duh), so now that they have sold it for $25 million it's somehow a net loss.

[Richard]

[QUOTE=drjeff;631713]

This is so full of idiocy I can't respond to it all, but it's rich you think that land Detroit owned was somehow generating tax dollars [[the city does not pay itself taxes on it's own property, duh), so now that they have sold it for $25 million it's somehow a net loss.

You claim idiocy then post that ….

Bridge authority representatives said 636 land parcels have been acquired by the Michigan Department of Transportation, leading to 229 residential and 88 business relocations.
As of April 1, 235 structures have been or are in the process of being demolished, representatives said. It’s unclear how many still must be cleared until land acquisitions are finalized by September.

According to you the city owned all of that and they cannot tax property that they owned,if they already owned it why was there a need to purchase it?

The $25m was to reimburse the city of Detroit for the future property tax and business tax losses.

Based on property land values and corporate tax collections on that day,with zero consideration as to more business locating there or zero increase in land values in the future,for ever.

Before you start making it personal in the future,youu is should probably have at least a little bit of a clue as to what you are claiming others not of having,otherwise you just look silly.

[Henry Whalley]

This is so full of idiocy...

Friends don't let friends read Richard's bloviations. Just say TLDR.

[Henry Whalley]

yep tdlr is the answer.

tldr

[Henry Whalley]

So you could call it a loss of future income to the city if the project is completed...

Sounds right

[swingline]

Its just fancy words,you do know once tax credits are approved,they have a cash value on the market,it’s the corporate tax credits that are the unknown.

Thats how a lot of these projects get done,the tax credit guarantee is sold for up to .75 cents in the dollar in order to provide a bridge funding until the project is completed and they can switch to conventional funding.

They cannot predict future taxes,so tax credits are in essence a loan in advance paid by the taxpayers.

Name one company that has ever reimbursed any city in the country for failure to perform when it comes to tax credits,lots of cities have tried and spent even more money in lawsuits,which would have never been necessary if it was as promoted based on future taxes.

Simply because if it was based on future taxes the cities would not be suing to claw back for non performance.

Once that amount is approved,it’s already drawn on.

The taxpayers are the bank,cutting the check today in hopes that the company will still be around.

The company is collecting the credits,selling them on the market and then paying the note off out of pocket out of future proceeds as long as the company can support the note,if they cannot,what can you do? Nothing.

Its creative financing.

The city is better off loaning the company the money at a market value interest rate,or higher then considering it is high risk,as it is,it is free money to the company.

But it is illegal for the city to play bank,so somebody that makes a lot of money sat down and figured out how to play the bank without actually being a bank and they called it tax credits.

You loaned them the money,it has been spent,you have not received their end of the deal and performed as agreed,they did not put collateral up so in layman’s terms,you are screwed,if that was you,the bank would have you sleeping in the streets as they took everything you owned to pay it back.

Its a very valid concern.

You borrowed the $800m based on future taxes to pay it off,you are liable for it to be paid back for the next 30 years you are the loaner and the debtor,are you comfortable with that?

using the word “you” is not directed at you personally,but if you as in you personally are a city taxpayer then,yea you owe yourself $800m,no interest,lucky you and you already have been paying yourself back,check was in the mail.

Fo not worry if you are having a tough time paying it back,you can always increase the taxes on yourself in order to make it more comfortable to swallow.

Sense you put up the money to build the project,with no interest,do you at least get a cut of the profits once the project is completed,no.

The irony of it all,you are paying interest on money that you loaned out that you cannot collect interest on in return.

Richard, you've made plenty of spot-on posts on DYes over the years but your long description about the public incentives being applied for by the District Detroit developers is a swing and a miss. Your claim that “tax credits” will be given to the developers which will then be monetized through their discounted sale to other corporate taxpayers simply isn’t true when it comes to Michigan Transformational Brownfield Plan [TBP] tax incentives. Your claim partially resembles the financing process that occurs when federal or state historic rehabilitation tax credits are involved. But that’s not the case here. By far the largest tax incentive component of the District Detroit project is a $616 million TBP that will capture that amount from a variety of tax sources generated by the project over 30 plus years and reimburse the developers over that time for eligible costs incurred to build – and complete – the project. No completion, no reimbursement. Taxpayers are NOT coming out of pocket up front with hundreds of millions of dollars on the if-come that the project will get built. The TBP reimbursements are allocated to proposed individual District Detroit buildings and these buildings must be completed before the developers can “collect.” The developers have also sought some incentives through a couple of DDA loan programs. These amount to less than 10% of the total sought, and importantly, they are loans not grants and are secured by real estate [admittedly subject to higher priority mortgages]. There’s also incentives being sought through a residential NEZ property tax abatement and a commercial property tax abatement that together amount to about 15% of the incentives sought. The residential NEZ abatement will accrue to homeowners. Again, these abatements are contingent upon the completion of the applicable buildings/units and do not consist of some up front cash outlay by taxpayers.


There can always be a debate about the pros and cons of public subsidies for private real estate developments. It is an important debate for the District Detroit. Richard’s post injects too much misinformation to that debate.