SEPTA's recent lease agreements with developer Ken Weinstein should be viewed as welcomed news. In neighborhoods often wary of redevelopment, the Weinstein-SEPTA partnership should be viewed as catalytic, preserving historic assets and creating new opportunities for commercial and residential redevelopment led by small businesses, new entrepreneurs and community-based organizations wanting to build new capacities. But this agreement is also an opportunity to further understand how the city can better support this type of redevelopment in the future.
One way to understand the …
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SEPTA's recent lease agreements with developer Ken Weinstein should be viewed as welcomed news. In neighborhoods often wary of redevelopment, the Weinstein-SEPTA partnership should be viewed as catalytic, preserving historic assets and creating new opportunities for commercial and residential redevelopment led by small businesses, new entrepreneurs and community-based organizations wanting to build new capacities. But this agreement is also an opportunity to further understand how the city can better support this type of redevelopment in the future.
One way to understand the Weinstein-SEPTA agreement is through the lens of the mega-subsidies we read about for the city's largest economic development activities. Big enough — an arena, a new luxury condo, an office building for an international corporate giant — city tax subsidies are available as a matter of right, with little deep analysis regarding the need, cost or beneficiary of the subsidy. In contrast, subsidies for the types of projects being proposed as part of the Weinstein-SEPTA agreement are small and customized, not just "applied for."
Yet in contrast to the behemoth projects with deep subsidies, we know a great deal about how SEPTA-Weinstein type projects contribute to neighborhood revitalization (and who benefits) based upon numerous local and national studies with solid, replicable methodologies. Tools now exist that can document the value of this type of revitalization including increased property values, lower security-insurance costs and improved rental incomes that accrue to property owners throughout the redevelopment area (generally an area within a few hundred feet of a redeveloped site). These tools can document the value of this activity including the extent to which "free-rider" property owners benefit from neighborhood-based revitalization. More significantly, the tools exist by which this free-rider value can be captured to support similar additional activities.
For example, the city could create small tax increment finance districts where redeveloped properties and those measurably impacted by the redevelopment could receive some of the increased tax revenues deriving from the difference between how the neighborhood is valued generally and increases in how the area immediately impacted by the redevelopment increases as a result of the specific redevelopment activity.
To be clear, these are revenues that adjacent property owners will pay as a result of rising property values regardless of how these monies are accounted for. There are no new net costs. The difference is that instead of these adjacent owners simply paying City Hall more based on rising property values, some of the value derived from local increases in property values due to revitalization could receive some additional revenue to further support and encourage this type of activity.
If the city's goal is to support preservation and small businesses, this is an opportunity to do something constructive and affordable that will be broadly supported by promoters and neighborhoods. The city should move to establish mini tax increment finance programs that support neighborhood-based preservation and revitalization activities as soon as possible.
Dan Hoffman, a Mt. Airy resident, is a policy innovator in affordable housing and community development who has served as founding executive director of the Minnesota Dacotah Indian Housing Authority, held faculty positions at Rutgers and the University of Illinois, and worked as policy director and principal lobbyist for Pennsylvania nonprofit developers.