Our fractious debate over tax incentives for development might reach a consensus quicker if not for a gaping void in our knowledge — whether incentives actually work.

Tax incentives get derided as big bucks for billionaires, even as proponents say they're crucial to the revival of a city like Detroit. Hundreds of millions of dollars are at stake.

So over the years, I've listened to economists and academic researchers who have studied tax incentives like the kind Ford will get to revamp the Michigan Central Station. And these academics more or less unanimously say "no," that incentives like those coming Ford's way aren't needed because almost all projects getting incentives would happen anyway without them.

Economists call this the "but-for" question: Would the project never happen but for the tax breaks?

As I've written before, Timothy Bartik, an economist with the Upjohn Institute for Employment Research in Kalamazoo, recently looked at incentives nationally. He estimated that incentives "tip" only about 20 percent of all projects, meaning that 80 percent of projects would happen even without the incentives. (Bartik made clear when I spoke with him earlier that he wasn't referring to any Michigan projects specifically.)

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If his analysis is correct, it means that incentives nationally, which amount to about $45 billion a year in the United States, are mostly doing no good, and that state and local governments are giving away more than $30 billion a year in incentives that create no more jobs than what would have been created anyway.

But across the debate table we find practitioners who actually stitch together deals in a tough environment like Detroit — the private developers and government officials working in economic development.

They, too, are unanimous, but they hold that of course incentives are necessary to make projects happen in post-industrial cities like this, where decades of blight and abandonment all but wrecked the real estate industry.

I've often wondered, how can there be such a gap between the academics studying the field and those actually working in it.

Two possible reasons

At least two factors explain this disagreement.

First, academics generally aren't counting "spin-off" benefits in their studies. A major project like Ford's renovation of the train station will generate a lot of other, smaller projects nearby — new housing, retail, commercial projects. These spin-offs help tax incentives "pay for themselves," but their value is difficult to estimate and so generally gets left out of economic studies.

And, second, there's the timing of projects. Some academic researchers concede that even if projects would happen anyway minus the incentives, they may happen more quickly because of the tax breaks.

That becomes just a footnote in academic research. But for city officials and developers trying to make deals happen, accelerating a project even by a few years is a major consideration.

More:Here's why Detroit development takes so long

And yet more

There are still other differences in how the two sides approach the question of whether incentives work. Academics rely on deep dives into available data on tax revenue and the like. Practitioners rely mostly on anecdotal stories. But some of those anecdotes are pretty compelling.

Consider how long it's taken major Detroit projects to happen. There was a 35-year gap between the closing of the Hudson's store in downtown Detroit and Dan Gilbert's groundbreaking for his new mixed-use tower last December. That decades-long delay in replacing the lost store was hardly unusual.

Indeed, in Detroit we've seen many cases like that one. The old Tuller Hotel on Grand Circus Park closed in 1976, was demolished about 15 years later, and only today is the site of a new residential development under construction.

And of course there's the Packard Plant, which closed in the 1950s and only today — more than a half-century later — we may be seeing the first stirrings of revival under its new owner.

Why the delays? It's a brew of low appraised values, reluctance on the part of investors to take a chance on Detroit, lack of demand, the overwhelming amount of abandonment the city suffered and other ills.

Subsidies everywhere

Against that backdrop, virtually every project that moves ahead in Detroit has taken subsidies to get going. The big deals like Ford's train station work and the Ilitch family's Little Caesars Arena get the headlines. But even modest neighborhood projects get going thanks to incentives of various kinds.

Last week, the city celebrated the opening of the new Norma G's Caribbean-themed restaurant in the Jefferson-Chalmers district on Detroit's far east side. Mayor Mike Duggan said at the ribbon cutting that the boost given the project by the city's Motor City Match program — just one of several types of help owner Lester Gouvia got to open his eatery — are needed to get redevelopment going in hard-hit neighborhoods.

Indeed, the recent comeback of districts like West Village on the east side and the Capitol Park area downtown would never have happened without public subsidies by the city and state.

One might even argue that Michigan should be creating more tax incentives, not fewer, by restoring the state's lost historic preservation tax credit. This credit, abolished in 2011, proved particularly helpful in revitalizing older cities like Detroit that remain dotted with empty historic structures. It let developers take a tax deduction of up to 20 percent of project costs — a key savings that enabled many deals to happen.

More:Southwest Detroit program aims to turn renters into homeowners

Sizes matter

But even apologists for tax incentives may gag a little over the size of recent subsidies. Case in point: That the State of Michigan, working with Detroit, was willing to offer Amazon a stunning $4 billion in tax breaks to locate its second headquarters here shows how rich some of these packages have become.

One evening last week, at a community meeting in Corktown, the Detroit Economic Growth Corp. unveiled its outline of tax incentives coming Ford's way. Those incentives included more than $100 million in tax abatements from the City of Detroit as part of a proposed $238.6-million total aid package including state assistance.

Ford has said it plans to spend about $740 million to turn the historic train station into a hub for future mobility research, part of a broader campus Ford wants to create in Corktown.

A Ford spokesman said the incentives are needed to make the economics of the project work.

"These types of incentives have been applied to comparable projects recently completed or currently underway in the city. The project would not be financially feasible without the support of incentives," the spokesman said.

But as my Free Press colleague Allie Gross reported from the Corktown meeting, skepticism remains.

"They have literally $17 billion in their bank. They're not going to go out of business unless they suck at business," said resident Jon Koller, an engineer who attended the Corktown community meeting. "We got a company taking $100 million out of city future tax receipts. ... We're going to have $100 million less, just in the city, to do stuff."

Benefits versus costs

Skeptical economists and other critics also note that proponents cite the benefits of handing out incentives but not the costs. Incentives may create an influx of new jobs and residents; but those newcomers also create increased costs of public services for schools, traffic management, police protection and more. Those extra costs are almost never considered when assessing the net gain or loss of using incentives.

Bartik estimated that "growth-induced spending needs can absorb upwards of 90 percent of the additional tax revenue" from a project. And while the benefits of incentives tend to show up in the short run — new jobs and the glitter of a ribbon-cutting ceremony that politicians of every stripe appreciate — the cost of providing more public services shows up only in the longer run.

Up, up and away

This much is true: The cost of incentives is escalating rapidly. One recent study found the cost of incentives nationally has tripled since 1990.

Incentives take various forms, often in the form of abatement of future property tax obligations. They can also include outright grants, or forgiveness of other future taxes that a developer would otherwise have to pay when a project is up and running.

Last year, the Michigan Strategic Fund approved tax incentives of about $16 million for the Detroit Pistons planned $107-million practice facility in Detroit. At Little Caesars Arena, public sources covered about $325 million of the nearly $900-million cost.

Businessman Dan Gilbert's Hudson's project is in line to get more than $160 million in incentives for the $900-million project, including sales and income tax abatement for construction activities, 30 years of property taxes, and, for 20 years, up to 50 percent of future state income taxes generated from the new jobs as well as from the new residents who will live inside the tower.

Try these reforms

I've generally been more supportive of a tax policy that encourages redevelopment in cities like Detroit. But I do propose several reforms to make them work better.

First, let's recognize that certain types of up-front assistance, like specialized job training programs geared to a specific company, might be more valuable to the company than a 30-year break on property taxes, and would draw less revenue away from city treasuries.

Second, we ought to open up the process of granting incentives, which typically now happens in private and only becomes news when a deal is close to being done. Agencies that might object to huge tax incentives, like schools or social service departments, ought to get a seat at the table when decisions are being made about incentives.

And third, economic development officials could offer only short-term help to get a project going, rather than tax breaks that last 20 to 30 years.

I'm not against giving even deep-pocketed players like Ford or Gilbert a tax break to get big projects started. I just don't think their tax breaks should last until most of us aren't around anymore.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.