The New York State Comptroller’s office recently released audits on 5 upstate Industrial Development Agencies. According to NYS Comptroller Tom DiNapoli:
Too many communities are left with unanswered questions about the effectiveness of providing costly tax breaks to private companies. IDAs owe it to taxpayers to appropriately track whether companies are delivering on their promises and take back benefits if they are not.
The one Central New York IDA that was audited was the Oswego County IDA. The Comptroller’s audit found that the County of Oswego IDA:
•Established an unauthorized revolving loan program, using its own funds, to finance a portion of the cost of projects. The IDA had 90 loans outstanding as of May 31, 2014, totaling nearly $9.6 million that were financed by its own funds.
•There is no formal process to compare current and projected jobs at the time of application to the reported number of jobs actually created and retained.
•Auditors found 31 companies that received loans only created half of the jobs they said they would create.
By 2044, people of color will account for a majority of the U.S. population. In an essay for the Brookings Institute, Jennifer Bradley examines efforts in U.S. metropolitan areas to prepare a more diverse workforce. Bradley showcases efforts of organizations in Minneapolis-Saint Paul to close persistent education and employment gaps facing its rapidly growing population. As Europe and countries like Japan face a declining working-age demographic, population growth among people of color has the potential to give the U.S. a competitive advantage in the 21st century economy.
Check the links to two interesting articles on the Department of Transportation (DOT) pilot project “Local Hire.” The program allows localities to institute hiring requirements, such as requiring developers of transit projects to hire people from within designated low-income zip codes–but only for the next 12 months.
This pilot project actually defers a DOT regulation of 40 years standing forbidding localities from placing requirements on hiring. Hopefully, the one year pilot project will be renewed and become the new default policy. “Local Hire” or an equivalent will be crucial to ensuring that jobs are created for our community when the Rt. 81 project becomes a reality.
Check out the very interesting article on the continuing saga of Destiny USA developer Robert Congel’s attempts to build a hotel near the oil city shopping mall.
The Onondaga County Legislature chairman Ryan McMahon placed two conditions on any tax deal for the proposed 225 room, $75 million project: 1) a Destiny-funded study on the economic feasibility of another hotel in the area 2) a community benefits agreement that would create a cash fund to benefit the city.
While Destiny did pony up cash for the feasibility study and was apparently negotiating with McMahon and the Onondaga County Industrial Development Agency, apparently the hotel project is no longer being pursued. This latest decision to not pursue the hotel could be another ploy by the Destiny folks. Heaven knows they have mastered the art of delay in their decades-long campaign to seek public benefits for private profit.
This whole scenario begs an interesting question: is the best way to blunt a Congel/Destiny demand for more corporate welfare a straightforward counter-demand for a CBA?
President Obama’s new budget proposes eliminating the ability of cities to use bond issues to help private pro sports franchises finance the construction of new stadiums and arenas.
Interesting that the article notes that this may become a wedge issue inside the Republican party. Traditional GOP’ers that work to help funnel money to business interests are facing opposition from Tea Party Republicans that oppose most forms of government spending.
The sports website Deadspin wonders if Community Benefit Agreements (CBA’s) may be another way to stop pro sports teams from extorting public benefits from cash-strapped cities. The genesis of this article is the struggle over a mandatory CBA ordinance in Detroit. The ordinance has been proposed by a Detroit city councilor disgusted by a city dealing with bankruptcy financing $285 million (over half of the $450 million price tag) for a new arena for the Red Wings hockey team. The Wings owner Mike Ilitch’s net worth is estimated at over $3 billion.
Detroit’s City Council has proposed an ordinance that would require a developer to negotiate a CBA on any project receiving more than $300,000 in tax benefits. The Mayor is opposed, the chamber of commerce is opposed and the state legislature tried to pass legislation to outlaw all cities in the state from passing such ordinances.
But many folks in Detroit are still pushing–especially those living and working in low income neighborhoods whose tax dollars subsidize millionaire and billionaire developers. Check out the site of the Equitable Detroit Coalition and their fight for the Detroit CBA ordinance.
The city of San Diego (CA) runs its own non-profit agency (Civic San Diego) that facilitates deals with developers for specific low income neighborhoods.
Check out this in-depth article from a local alternative newspaper urging the agency to go beyond just planning for the physical buildings in the neighborhoods and starting its plans by assessing the most acute needs of the community’s residents.
The non-profit has also created an online site to allow residents to “to share their interests, collaborate to evolve ideas, and identify and prioritize shared values for their neighborhoods.” The idea is to create consensus on desired community benefits.
The City Council of Detroit (MI) is likely to introduce a proposed ordinance requiring private entities that either receive tax credits or buy a city-owned vacant building to negotiate a community benefits agreement (CBA). The CBA’s would only be required if the value of the tax credits or building purchase exceeds $300,000.
The proposal is opposed by Detroit’s mayor Mike Duggan and the city’s Chamber of Commerce. The plan has the support of the Council President and many business organizations located in low income neighborhoods.
At the end of 2013, the state of Michigan threatened to pass legislation that would prohibit CBA’s in any municipality in the state–but no action was taken on the bill. Ironically, Detroit Mayor Duggan opposed the state bill, fearing it would create precedent for the state to limit the autonomy of local governments.
I guess he prefers to kill CBA’s locally! Stay Tuned!!