Mary Beth Corrigan of the Urban Land Institute (US): 'It is relativily low risk'.

TIF: tax increment financing
'It is a message you send out to the investors'
In the US, it is common practice to use future tax revenues as a bond for a loan to boost new development projects in difficult areas. This 'value-oriented financing' might also be a solution for European cities that are having difficulties financing large-scale redevelopment projects.

Mary Beth Corrigan is the Vice President, Advisory Services Program, at the Urban Land Institute (ULI). This US-based non-profit research and education organisation is involved all aspects of land use.

Corrigan is a planner and policy analyst with more than twenty years of experience in helping local governments and private clients to address and solve land-use and development issues.

With a panel of experts in private and public financing, she will be visiting Saarbrücken on 10-12 July to advise on the waterfront project. Value-oriented financing will be one of the options under consideration.

Off the cuff, she is able to name some projects that were propelled by this method of financing.

'The Anacostia River waterfront regeneration program in Washington, the redevelopment of the beach front in Hollywood, Florida, and the sports arena in Dallas, Texas, are a few examples. There are many more all over the country. In the US we call it TIF - tax increment financing. Local governments establish a TIF district and borrow money against the anticipated future tax revenue of that district, knowing that in future years they are going to generate the taxes to pay the bond off.

This kind of financing is often used for urban regeneration projects. Another use is building football stadiums or other big sports arenas like the basketball stadium in Dallas. In this case, the city established a district in which all the new development would contribute to the TIF.'

So this method is widely used in the USA?
'It is, but you can't do this everywhere. Not every state has legislation that will allow it. It has to do with the powers of the local government to borrow money this way.'

Where does the private sector come into it?
'The private sector will go where they know the public sector is making an investment. If the local government is making an effort, taking some risk, that's a good sign for investors. They will be more willing to take a risk as well. So while the TIF isn't exactly a private thing, it is a message you send out to the investors.'

Is it a safe method? Not some accountant's trick?
'No, it's very widely used here and I think it is relatively low-risk. TIFs have been used for over half a century throughout the US. The projects are well-defined and the revenues are predictable.'

>>> EXPERT MEETING SAARBRÜCKEN 10 - 12 July 2005
>>> VALUE ORIENTATED PLANNING