Are they TIFs? How much are the taxes? Where are the districts?
Setting aside the philosophical argument about EDDs in general, the way these particular districts are designed is problematic.
The gist: The board of a Lafayette public trust voted to front the cost of adding a new sewer pump Downtown as an intermediate fix to the district’s nagging sewer capacity problem.
Clogged up. Downtown and Lafayette’s urban core in general suffer from aging and inadequate sewer infrastructure that developers say limits their ability to add apartment complexes and townhouses. The problem is particularly acute Downtown. Longterm, LUS is working on a $7 million infrastructure upgrade that would fix the problem and then some. But that’s not fast enough to accommodate what’s believed to be immediate demand for Downtown living.
LPTFA stepped up with a stop gap. The deal calls for the Lafayette Public Trust Financing Authority to spend just under $1 million to build a lift pump station on Grant Street property owned by LPTFA. LUS will reimburse the trust.
“We feel it’s in the interest of Downtown for us to step up,” Rebekke Miller says. Miller is the program coordinator for LPTFA, which is in the process of building a 70-unit market rate project near Downtown.
1,800 beds. That’s the total new capacity expected to be unlocked by the lift pump, according to LUS. A 2017 market study estimated Downtown could support up to 1,110 residential units. Downtown Development Authority CEO Anita Begnaud says the station would be complete by December 2020, in time to accommodate several new developments, including the old federal courthouse.
“I think you’re going to see another 200 units once [developers] see the capacity,” Begnaud says. Developers have been unable to secure financing for projects without commitments from LUS that the developments will have sewer facilities. Several smaller-scale developments are waiting in the wings behind the roughly 200 units of new housing currently underway.
Why this matters. Downtown has been stuck in a development quagmire for years while advocates clamor to bring urban living to Lafayette. This year, employer announcements — Waitr and CGI — stoked optimism for a boom. But infrastructure limitations remain an obstacle. Downtown officials are pushing to create a new sales tax district to finance infrastructure improvements, which the City-Parish Council will vote on Dec. 17.
The gist: Six new economic development districts passed introduction Tuesday by the City-Parish Council, in a rush of legislation on the council’s waning agenda for the year. The districts would levy new sales and hotel taxes to make improvements advocates say would spark economic activity in areas that need it. A vote on final adoption is set in December.
Here are the six districts: Downtown, University Gateway, Trappey Riverfront Development along the Vermilion River, Northway District anchored by Northgate Mall, Holy Rosary Institute and the Acadiana Mall.
Taxes would be confined to district boundaries. The districts propose different tax rates and sunsets — varying between 1% and 2% sales and 1% and 2% hotel occupancy — but follow more or less the same structure. Council members — for the time being, from the City-Parish Council — will serve as each district’s governors, with the power to levy taxes, and will enter a cooperative endeavor agreement with private or public entities and the city of Lafayette.
Half of the districts are on the northside. The area has long been in decline. Advocates argue consolidated government has not prioritized infrastructure and economic development needs on that side of town. Proponents view the districts as essential tools for bootstrapping prosperity. Rehabbing and redeveloping blighted property, streetscaping and land acquisition are on all three northside district lists. The Holy Rosary district prioritizes repairs of the historic school itself, construction of an African-American heritage museum and building a medical clinic.
“We know we need economic development on the Northside,” said Ravis Martinez, part of a private development linked to the Northgate Mall district, in remarks Tuesday night. “When are we going to invest on the Northside of Lafayette? When are we going to take a hard look at ourselves, a hard look at the big box facilities and stores moving out? What are we going to do for the Northside of town?”
Downtown advocates say they need the money. A lack of sewer capacity Downtown has choked the district’s ability to attract residential development. LUS rolled out a multimillion dollar sewer infrastructure upgrade intended to address the problem, but it won’t be complete for several years. Anita Begnaud, CEO of the Downtown Development Authority, tells The Current the district will give Downtown some independence in getting basic and necessary infrastructure in place.
“People want to develop here. The reality is nobody can get a bank to give them $1 million upfront to build a lift station,” Begnaud says. “Something’s got to be done to lift that hurdle.”
The districts’ boundaries exclude registered voters. This is a common practice in drafting economic development districts. Without registered voters in the districts, the governing authority can levy taxes without a general election that would otherwise be required to be held for the voters within the districts. In Downtown’s case, drawing the district this way makes for a patchwork map that excludes addresses with registered voters associated. In some cases, people use commercial properties as their registered address, which then excludes those businesses from the district.
“Almost every EDD is created on a greenfield site where there are not registered voters,” Begnaud says.
Critics take issue with the bundling of several districts at the tail end of an outgoing government. On top of the question of timing, there has been fierce ideological opposition to this financing approach, particularly among staunch conservatives who view the mechanism as a form of crony capitalism and a distortion of the free market.
“This is all new in Lafayette, and it’s moving awfully fast,” said Councilman William Theriot, one of only two votes against establishing the districts, joined by fellow conservative council member Jared Bellard. Bellard and Theriot have both consistently opposed the financing strategy — often broadly referred to as tax increment financing districts or TIFs. Councilwoman Liz Hebert moved to defer the batch of ordinances carrying the districts until next year but was voted down by advocates urging immediate action.
Lafayette has experimented with economic development districts before. The Target-anchored shopping center on Louisiana Avenue was built using a similar financing strategy. Proponents touted the development’s success as a proof of concept Tuesday night, arguing it should be put to good use within Lafayette’s urban core.
What’s next? Should the districts pass final adoption in December, their governing boards — effectively the members of the City-Parish Council and, later, the City Council — would have to approve levying the proposed taxes. That means Dec. 17 isn’t necessarily the final stop. Council members could create the districts and approve the CEAs but punt levying the taxes to the City Council. Based on the conversation Tuesday, there was little appetite for waiting.
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