Get use to hear it. If you want the formal explanation, click here.   The Worcester Herald Explanation goes like this:

  1. You have zone that you call a DIF that pays “X” amount in property taxes and sales taxes.
  2. They City of Town then borrows money and invests in the DIF, under the premise that property tax and sales tax revenues will increase.
  3. Since it is a DIF the City or Town can keep these increases revenues.

The pitch goes like this:

  1. Sure we are going 60 million in debt
  2. It will not cost the tax-payer a penny
  3. Since we will have increased revenue both in property taxes, maybe even hotel taxes and sales taxes.

What if it does not work???   Consider this a $50,000,000 at 5% over 30 years equals $3,200,000 per year.   In other words a $50,000,000 investment into a DIF would need to generate $3,200,000.

It is akin to Main South CDC convincing the City of Worcester to co-sign on a HUD guarateed loan and telling us it will not cost us a penny.  How did that work out?