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OK Gang and Capt Joe - I've gotten a bunch of e-mails telling about what is being said here, so I decided to come on over and throw in a little information. First, I work for developers all the time and have no problem with sensible development - just development that will be detrimental to the City. For instance, Joe, you trumpet 200 jobs that will be created by Gloucester Crossing. Well, what about the jobs, and stores and businesses that will be LOST from Main Street and other areas of Gloucester when this place opens? The net won't be 200 jobs will it? And the lost tax revenue from business downtown will certainly count against any revenue that might be generated by Gloucester Crossing, right? How about the lost tourism revenue when people stop coming during the summer? Tourists don't come here to see a "gee whiz modern mall" but a quaint, active Main Street. These are called second, third and fourth order effects of an economic proposal or plan. Did you hear any of that during Greg C.'s presentation to the council? No, because he never thought of it because he has never done this type of economic evaluation before.

Now, just so we will all know what we're talking about and to kill a few myths that have grown on this site, here is some information for consideration. A little long - sorry - but we should all know what we are talking about.

What is a DIF? In July of 2004, the final rules and regulations were approved implementing Massachusetts General Law Chapter 40Q, commonly known as District Improvement Financing (DIF). District Improvement Financing is:

•A Public financing alternative available to all cities and towns in the Commonwealth
•Used to fund public works, infrastructure and development projects by allocating future, incremental tax revenues collected from a predefined district to pay project costs
•Is utilized so that Municipal investment stimulates private investment which, in turn, increases the taxable value of property and generates the incremental taxes
•It is intended to forward public purpose while assisting private partners in accomplishing their goals

What does District Improvement Financing (DIF) do?
A DIF enables municipalities to pay for the public works and infrastructure necessary to attract growth by pledging the future incremental tax revenue resulting from growth within a designated area to service bond financing obligations.

Through a public process, a municipality defines a development district (in this case, only the confines of Gloucester Crossing!) and documents a development program describing, among other things, how DIF will encourage increased commercial, industrial, and/or residential activity within the district. The municipality must also detail the public improvements (the development plan), financing plans, and community benefits. The municipality must have private development partners and the certainty that the project(s) will generate new growth and new revenue. This is not a "build it and they will come" program. In order to go forward, the State's Economic Assistance Coordinating Council (EACC), operating under the aegis of the Massachusetts Office of Business Development, must review and approve the municipality's development districts and development plans. So, the municipality (Gloucester) initiates the DIF to provide support to the Developer - and Sam Park has requested a DIF from the first public meeting to the last presentations before the City for his permits. So much for Sam not qualifying for a DIF, no matter what grants he may be going after.

Now, here is where the money comes from. The town undertakes a baseline valuation of properties in the redevelopment area and then freezes taxes at that level ($10,000 according to Capt. Joe). A bond (a loan initiated by the City) is issued to pay for land acquisition, site preparation, or public improvements, depending on the needs of the proposed development project as outlined in the development plan (in this case around $3M is what Sam requires to build roads and sewers - all of which would not be necessary if the Gloucester Crossing project wasn't happening.).

Subsequently, commercial or industrial projects, or even housing projects are developed and financed privately. After the property is improved, a new valuation is conducted and tax receipts in excess of the original valuation are "captured" and escrowed to pay for the public improvement costs (so the difference between the $10,000 in the current tax revenue and the new assessed amount).

The tax increment is the property tax paid upon the "captured assessed value" of the property in the development district, i.e., the amount by which the current improved value of the development district exceeds the original assessed value of the district ($300K minus the current $10K at most according to Sam Park's estimates and Greg C.'s presentation to the City Council). The property will not yield $648K in tax revenues to the City (real estate, hotel, etc.). The $648K Capt. Joe talks about is from Greg C.'s revenue report and included no City costs for services against projected fees and WAY overestimated the hotel tax revenue. A municipality can choose to pledge all or a portion of the tax increment (get that? all or a portion of the increased tax revenue) towards the repayment of the bonds (i.e., loans) issued from the City.

If the City borrows $3M to finance the infrastructure, we won't see revenue from Gloucester Crossing for 15 years while we pay off the loan as they will have to use the new tax revenue in excess of the current tax revenue ($10K) to pay for the bond/loan.

How is that for "math" Capt. Joe? You just have to start with the correct figures.

Thong Extractor wrote:

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If I hear one more fucking time that this will cause loss of jobs on Main St my head will explode. What fucking JOBS???? IS CVS planning on closing or is Sam Prks going to close down Jalepenos, The Franklin, or Passports or the Village Silversmith. Have you fucking morons actually walked down Main St. lately, 90% are niche businesses that Sam Park has no interest in competing with. The rest are crap stores that last 1-3 years and go under and provide minimal jobs. Maybe people want a place to go to shop for several things at once without being harrassed by Gus Foote's family watching the meters.

Well, let's see - CVS added people when Ames closed - do you think that maybe there is a chance some of those shoppers might go away now and shop at Gloucester Crossing? What about the chance that CVS might not need two stores in town anymore? Think that might cost some jobs? Or when the restaurants go in at GC, do you think it might effect the dining revenues for Jalepenos or the others? What about the people who own the stores and get their revenue from their businesses? Certainly they provide tax income to the City. Do they have a right to worry that a bunch of people worried about being able to buy cheap underwear at 3pm on a Tuesday may be inclined to shop for their other goods while they happen to be at the shopping center? The 22 small stores going into Gloucester Crossing are MEANT for stores JUST LIKE THE ONES ON MAIN STREET. If I were a store owner on Main Street, I would move there as a business matter if I could because the foot traffic will be greater and I would have a better profit margin. But that only moves a business and doesn't add one to the tax base. Before you start name calling you should at least take some courses in economics.