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Greenwich insists that despite Doctoroff's claims, that guarantor will ultimately be the city: "If that TIF district goes to default, the city will have a hard time ever selling bonds again, so they'll do whatever they can to prevent that from happening. I don't believe that the firewall's going to be totally solid."
Even without a direct bailout, TIFs have proven capable of eating into city budgets. In Washington, D.C., when $73.6 million in TIF financing for the Gallery Place mall ran into a brick wall after bond buyers balked at the revenue projections, the district was forced to expand the TIF to cover nearly half of its downtown core. And Columbus, Ohio, notes the Independent Budget Office study, has seen its downtown district empty out as business flees to the TIF district around its new hockey arena. Adding 20 million square feet of office space to the West Side during an economic slump could end up cannibalizing developmentand tax revenuesfrom other parts of Manhattan, a prospect that is quietly striking fear into the hearts of those in charge of redeveloping the World Trade Center site.
Finally, if the office space market is slow to rebound, developers could simply demand further tax incentives to build there. That's exactly what's already happened in San Diego, says Donald Cohen of San Diego's Center on Policy Initiatives: "It creates all sorts of pressure to continue to pour more money into that one area to make that work. It becomes a sinkhole."
The IBO is readying a more in-depth study of TIFs for release in upcoming weeks. Meanwhile, Doctoroff will bring his Olympics slide show back to the City Council for the second of three hearings on January 30, where finances will at last be on the official agenda. But if Tobier is right, these hearings are just the preliminaries: The medal rounds won't come until the TIF plan falls apart, and NYC2012 has to appeal to the state legislature for funds.
"Investors have their hands full of deals from municipal agencies that have gone belly-up," he says of the financing plan. "They're not schmucks. I know Doctoroff has got his heart set on this thing, but I just don't see it happening."