Ruling puts projects in peril

Loans of tax money to improve the city's downtown need voters' okay, high court says.

By JANET ZINK, Times Staff Writer
Published September 19, 2007

TAMPA - Millions of dollars worth of improvements slated for downtown are in jeopardy in the wake of a Florida Supreme Court opinion this month.

Among the projects affected: improvements to Ashley Drive, the transformation of Zack Street into an "Avenue of the Arts," a study of a downtown bus system and a $15-million renovation of Curtis Hixon Park.

City finance director Bonnie Wise said she is working to find money elsewhere in the city's budget to pay for the park.

But the other projects are on hold indefinitely.

The city had planned to pay for them by borrowing money and repaying it using property tax dollars generated downtown. Much of downtown is designated as a "community redevelopment area," where tax revenue increases can be funneled back into the neighborhood for improvements.

But, according to the Supreme Court decision, such loans need voter approval.

"This has ignited a veritable firestorm across the state," City Attorney David Smith told the City Council on Tuesday when the board met as the Community Redevelopment Agency, which oversees the city's redevelopment areas.

Before the court ruling, the city had planned to borrow against future taxes, which would have given it $40-million up front to spend on its projects. But now, without a public vote, the city will have only about $3-million each year to spend.

The Supreme Court decision came after a challenge to a $135-million bond issue in Escambia County for a road-widening project near Pensacola.

The Sept. 6 opinion reversed a precedent set 27 years ago that exempted referendums when governments or agencies want to borrow using money from tax increment financing districts, such as the one in downtown Tampa, or "certificates of participation," a form of financing often used by school districts.

Despite the ruling, the Hillsborough County School Board on Tuesday voted to include $50-million of the disputed bonds in its five-year construction plan to build three elementary schools.

The schools are not scheduled to open until 2010, which gives the district "time to adjust" in case the bonds are deemed invalid because of the court ruling, said school district spokesman Steve Hegarty.

"We'll figure something out," he said.

In St. Petersburg, where the city has $30-million in outstanding bonds for its downtown, officials are unsure if the Supreme Court ruling will affect them.

Mike Connors, the city's internal services administrator, said St. Petersburg has joined other governments in asking the court for clarification.

Smith, Tampa's city attorney, said in particular the court needs to make clear which residents would need to vote on borrowing plans.

As the opinion is written, he said, it could be interpreted to suggest that only people who own property in the special taxing districts would cast ballots to approve the loan.

But it could also be interpreted to mean all voters in Hillsborough County would have a say because special taxing districts get money that would otherwise go to the county's general fund, he said.

That would mean voters throughout the county would have to approve funding for a street improvement project in downtown Tampa if it were paid for with borrowed tax money.

Mayor Pam Iorio said the city will find the money to move the Curtis Hixon Park project forward.

The park is a top priority for Iorio, who said it's essential to the future of the new Tampa Museum of Art and new Children's Museum, slated to be built there.

"We want both museums to be a success. In order for that to happen, we have to build the park," she said. "We're trying to create an entertainment environment here."

The Supreme Court decision may also threaten the redevelopment of Central Park Village, a public housing complex near downtown that's being demolished to make way for condominiums.

The project's developer, Bank of America Community Development Corp., is depending on using money from a special taxing district to finance roads, stormwater systems and a park.

"This ruling could have significant effects on what is ultimately developed on this site," Bank of America vice president Roxanne Amoroso said in a prepared statement. "We are working to better understand the implications of the ruling."

Times staff writers Aaron Sharockman, Amber Mobley and Michael Van Sickler contributed to this report. Janet Zink can be reached at jzink@sptimes.com or 813 226-3401.

[Last modified September 19, 2007, 00:34:13]