RALEIGH - Dix 306 yard signs are sprouting across Raleigh, announcing support for the Friends of Dix/Dix Visionaries proposal to preserve all 306 acres of the Dorothea Dix Hospital campus to serve as Raleigh's "Central Park."

Open space preservation and the idea of a central park for the Capital City are commendable ideas. However, before jumping on the Dix 306 bandwagon, citizens need to closely scrutinize a financing mechanism that is being proposed, and to think critically about the foreseeable consequences.

Friends of Dix/Dix Visionaries propose to fund purchase of the Dix property and development of a "destination" park by using Tax Increment Financing. What's this?

You may remember that in 2004, North Carolinians voted to adopt a constitutional amendment to allow the General Assembly to let local governments sell what were termed "self-financing" bonds to pay for public improvements associated with private development projects within a defined territorial area. These bonds -- more commonly called tax increment bonds -- are not subject to taxpayer approval.

How are self-financing or tax-increment financing (TIF) bonds supposed to work? A local government defines a geographic area where it thinks private development would occur with some upgrading of public facilities (such as water/sewer infrastructure, sidewalks or parking). It designates that area a "development district."

The tax base in the district is frozen, with property owners agreeing to a minimum tax value for their property. The local government then sells bonds to finance the infrastructure improvements. A private developer -- lured by the improved infrastructure -- builds a commercial or residential structure in the district. Tax value in the district increases, and the difference between the property tax revenue before development and the increased property tax revenue is used to retire the bonds that funded the public improvements. When the bonds are paid off, the higher taxes go to the taxing authority.

Tax-increment financing was created as a way to bring economic development to blighted areas of cities, to bring new uses to idle factory buildings or to clean up and use properties contaminated by industrial pollutants or leaking underground storage tanks -- not for private development on high-value land.

Friends of Dix/Dix Visionaries know from studying the development of large urban parks in other cities that land around such an amenity becomes highly desirable and that development and redevelopment opportunities soar. They propose to put retail areas and neighborhoods around Dix into a Tax Increment Financing District and begin to redevelop these areas with higher value residential and retail development. The proposed district is very large and includes a number of high-value areas that are already being redeveloped, including Glenwood South and Boylan Heights. It includes at least one neighborhood where there are few if any opportunities for redevelopment but where property values will increase anyway because of the area's cachet -- Cameron Park.

Using TIF to fund an amenity that creates huge opportunities in downtown Raleigh for developers but does nothing to bring development to areas of the city that really need it would set a dangerous precedent.

Neither Raleigh nor Wake County has used TIF, and neither has established guidelines for its use. Once Raleigh, or any municipality, gives any developer or group of developers handouts through TIF, there will be no turning anyone down. Until guidelines for using TIF have been developed -- with plenty of public input -- it should not be considered for any project.

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Moreover, the proposal to preserve all of the Dix campus for a park raises another critical issue that has received scant public attention. There are a number of low-income neighborhoods near the Dix campus. Such neighborhoods as Fuller Heights on Lake Wheeler Road, which is low-income rental housing, offer the possibility of huge profits if Dix becomes a "Central Park," regardless of how the park is funded.

Indeed, it is rumored that speculators are already buying up property in Fuller Heights. Redevelopment of these low-income neighborhoods will significantly reduce the stock of affordable housing in Raleigh. Any plan to make all of the Dix campus a park should include provisions for affordable housing.

Identifying the most publicly beneficial use of the Dix campus requires a great deal of critical thinking. Supporting a proposal simply because a park seems like a good idea is not critical thinking.

(Jeri Gray is a technical writer who lives in Raleigh.)