A private group is suing the city of Fort Worth, Texas (registration probably required), over a $40 million tax incentive package for hunting and fishing retailer Cabela’s, which is building a “superstore” near the Texas Motor Speedway. The plaintiffs say that the tax increment financing money for Cabela’s does not fit the criteria for which the TIFs were created.
“We are challenging the legality of this TIF,” said Louis McBee, the group’s community affairs director. “We believe the area is developing on its own with the investment [the city] has already made — the racetrack.”
In a tax increment financing district, the property value of a piece of land is frozen and any tax revenue generated by higher property values caused by new development is used for public improvements in the district, such as streets, sidewalks and sewers.
The lawsuit states that the city’s fact-finding methods failed to turn up evidence that the area near the Cabela’s site is blighted or that a private enterprise would not have redeveloped the area without incentives — the legal requirements for TIFs.
The lawsuit notes that TIFs are sometimes necessary for “cash-strapped municipalities” to entice large “cash-flush corporations” to set up businesses and employ workers. But mayors and councils can find TIFs to be “political gold mines, promoting TIFS to their political (and sometimes) financial advantage,” the suit states.
In the Fort Worth case, there was “a breach of trust and the abuse of the power” entrusted to the mayor and council, the lawsuit says.
You mean there is potential for deception and abuse of power with TIFs? No way!
