Friday, August 29, 2008

The problem with TADs

TAD news - 10 of the 15 projects slated for the Westside TAD have dropped out. Some, like Barry's Allen Plaza, dropped out because of the lawsuit which stripped out half the TAD funding. Others, like Gallman Development Group's Markham Lofts, dropped out because of the timing:
Bruce Gallman, developer of the Markham Lofts, said the court decision was not a factor in his decision. Instead, project redesigns and the inability to meet the six-month TAD deadline did him in, he said.

“There’s just no way we can comply with the requirement,” he said.
I have been involved with TADs a little bit, and Gallman has a legitimate point here. The earlier TADs, the Eastside and the Westside TADs, have bond issuances for all the projects at once, and you better hope that your project timing works with TAD timing. You will probably have to sit on a project for a while before you can find out if you get TAD financing (and by the way, your financers won't fund anything until you know you get TAD financing, so you are kind of in limbo). Or, maybe you miss the TAD bond - they only come around every few years. So, forget that TAD financing.

I think TADs are great. But they have some issues. If you want TAD financing, your entire project becomes a slave to the city's time table. Its hard to convince folks that it is worth the hassle sometimes.

I recall that the newer TADs (the Stadium area, Metropolitan Parkway, and a few others) will have more of a rolling bond issuance process. I don't have time this morning to do all the research on that (a quick look at the ADA site didn't turn anything up). Any help? Can the existing TADs get changed to help with this timing issue?

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