Publisher's note: The author of this post is Barry Smith, who is an Associate Editor for the Carolina Journal, John Hood Publisher.
Facility that potentially would host baseball, lacrosse, soccer, and other events likely to need controversial TIF bonds.
Some of High Point's leaders are advancing a plan that would place a multipurpose stadium somewhere downtown, even though the city does not host a minor league professional sports team.
Baseball could be played at the new complex, along with soccer and lacrosse, said Doyle Early, a High Point attorney and chairman of Forward High Point Inc., a redevelopment group seeking to transform the city's downtown "into an extraordinary and vibrant destination to live, work, study, and play."
In addition to being a sports venue, the downtown stadium also would be available to host concerts and other events, Early said.
"We believe that the downtown stadium would be that catalyst project for the redevelopment of downtown,"
Early said. "We're looking for office, residential, lodging, restaurants, retail, the whole deal. We want to put together a package that has all of that."
Boosters of the project are confident that a downtown stadium would boost an area that has suffered from the demise of the city's furniture industry.
"We believe it's doable and that it will be a great catalyst for downtown development,"
One member of the High Point City Council, Cynthia Davis, fears that taxpayers will be stuck with the bill.
"They're trying to keep the information away from the citizenry so they don't know what's going on any more than the city council,"
said Davis, who is an at-large member of the council. "This is a good ole boy deal, at least that's the feeling."
Davis said price tags as high as $25 million have been mentioned.
"The way we're approaching it is a large amount of it is going to come from private funding,"
Early said. "The city may play a part."
Davis said she's concerned that even if the stadium complex is funded with private dollars, the city's taxpayers will be asked to underwrite the cost of infrastructure for the complex and related development, along with other operating expenses. She said there are higher priorities for city taxes.
Both Davis and Early said tax-increment financing has been mentioned as one of the options of financing the stadium complex.
Unlike other government borrowing, such as general-obligation bonds or certificates of participation, TIF bonds are supposed to be repaid from extra tax revenues generated from the projected higher property values that are supposed to develop in the project area.
The funding method was approved in 2004 when North Carolina voters ratified a constitutional amendment allowing a government to issue TIF bonds without holding a referendum.
It's been used sparingly in the Tar Heel State. Most infamously, TIF bonds were used to finance the Randy Parton Theater in Roanoke Rapids. The city used TIF to finance a $21.5 million debt for the failed theater.
Roanoke Rapids officials announced last month the city still owes about $17 million on the facility and was putting the 48,000-square-foot building and its fixtures and sound equipment up for auction, with bids starting at $1.1 million. Net proceeds from the auction will retire some of the debt.
Alan Millsap, a research fellow at the Mercatus Center at George Mason University in Virginia, said often times TIF bonds don't work out. "If it doesn't, now you're on the hook for paying these bills or defaulting on the bond,"
"[TIF financing] kind of lets public officials be venture capitalists with others' money,"
Millsap said that elected officials often find TIF bonds as attractive alternatives when it comes to financing big-ticket projects.
"It's an easy sell to the voters,"
Millsap said. "They sell no tax increase. General obligation bonds have to go to a voter referendum, and TIF [bonds] don't,"
Millsap also said that research shows it's unclear if TIF bond spending leads to economic development.
"Usually the promised jobs and the promised economic development, to the extent that it does occur, it usually looks like it would have occurred anyway,"
Government-backed TIF bonds can put other private businesses at a disadvantage, Millsap said.
"The competition is when people spend their money at a stadium, they don't spend it in other places,"
Millsap said. "So it's competing with movie theaters, for example, or whatever other things there are in High Point that people like to do for recreation."
A lot of things remain uncertain about the proposed stadium complex, including the site.
"We are going to build it in downtown High Point,"
Early said. "We've got probably three or four sites we've looked at. ... We're going to have to acquire some property."
Early said proponents are working on a package that would put together office, residential, lodging, restaurants, and retail establishments.