Vienna Deserves Honesty About the TIF
Vienna City Council and Mayor Rapp will vote to approve the TIF for the Grand Central Mall tonight. If you do not know what a TIF is, you are not alone. TIF stands for Tax Increment Financing, which is a public financing method used to subsidize redevelopment, infrastructure, and other community projects. Using a TIF, municipalities can divert future property tax revenue increases from a defined area, in this case, the Grand Central Mall. TIF subsidies are not appropriated directly from the city’s budget, but the city incurs loss through forgone tax revenue.
Last year, the Mall approached the city of Vienna to establish the TIF District to offset the costs associated with demolition, remediation, and site preparation necessary for development of the former Sears store. In addition to those costs, the Mall is also asking for the professional services such as legal fees, consulting fees, and administrative fees to be paid for by the TIF.
According to the Grand Central Mall, a subsidiary of the publicly traded billion-dollar company Washington Prime Group, without the TIF they would not be able to justify the level of proposed investment into the Mall redevelopment project. The Mall is investing a little more than $20 million to redevelop the old Sears store into a concept that is more popular with shoppers and will reflect current retail trends. Originally, they asked for $2.8 million from the City of Vienna in the form of a TIF to help “stabilize” the mall. The TIF has now grown to $3,334,118 and that number can grow even more with ongoing professional services associated with the TIF project. The TIF will divert increased property tax revenue for 30 years or until the redevelopment and administrative costs are recouped, whichever comes first.
Over the years, the Mall’s investment in our community has been tremendous. Without question, our city budget relies heavily on sales tax and B&O and B&I taxes generated by the Grand Central Mall. Stores in the mall employ hundreds of retail workers and the redevelopment project employs local construction workers. In addition to taxes and job creation, the Mall has also supported many community organizations from the Boy Scouts to Artsbridge. All of this is vital to our local economy and community.
Even before the pandemic, brick and mortar retail businesses have struggled to keep their doors open. Large retailers such as Sears, Kmart, JC Penny’s, and many others are filing for bankruptcy. As Americans become more and more accustomed to online shopping, the future of malls across America is very uncertain. Many malls, who were once the hub of local communities, have shuttered their doors and become a retail space wasteland and eye sore. Like you, I do not want to see that happen in Vienna. But I am also not comfortable with Vienna’s public tax dollars being used to subsidize a billion-dollar corporation. Vienna has an annual budget of just under $10 million, Washington Prime Group has profits in the hundreds of millions of dollars each year. Why are we subsidizing WPG? The Mall, just like all business, must reinvest and adapt to changing market forces to continue to be successful. And sometimes that just isn’t enough. Remember Kodak? Sadly, even with Vienna’s $3 million plus tax abatement there are no guarantees the Grand Central Mall will continue to thrive in these uncertain times.
Whether you are for the TIF or firmly against it, one thing holds true, there is a lack of transparency on the part of this administration regarding the TIF. The attorney for the Mall (the lawyer we are paying for) has been before city council twice to report on the project. Mayor Rapp has amplified all the pros of the project without any discussion of the cons. There are always cons to any situation and they should be discussed honestly and transparently. In June, after a vote was taken to consider accepting the Mall’s application for the TIF, Councilman Leach stated “Mayor, just so you are aware, based on a prior contractual agreement, I will be abstaining from voting with respect to this TIF throughout this discussion.” The Mayor replied, “So noted Jim, thank you.” Mr. Leach’s “prior contractual agreement” was never revealed to the public despite clear requirements under the WV Ethics Act. The public must be informed of the specific nature of that conflict, but if the past is any indication, that will likely never happen.
One of the reasons I am running for Vienna City Council is to restore honesty, transparency, and accountability to our city government. We may not always agree but I can promise I will always listen to and consider all sides before making any decisions for Vienna. I am not beholden to special interests nor do I have a personal agenda to fulfill. Transparency should be a cornerstone of good governance, but it is virtually non-existent in Vienna. I believe honesty is the best policy. Not only has honesty served me well in over 20 years of business, but it is the cornerstone of my personal life.
Vienna desperately needs a change in 2020. Now is not the time to re-elect folks who are rubber stamps for agendas that are not always in the best interests of Vienna residents. We need representatives who have a vision for the future and understand they have a duty to be honest, transparent, and accountable always. I understand that awesome responsibility and will uphold those shared values. With that, I respectfully ask for your vote for Vienna City Council in the upcoming election. Vienna’s future is bright. Let’s work together to achieve her potential.