New Albany is a state of mind … but whose? Since 2004, we’ve been observing the contemporary scene in this slowly awakening old river town. If it’s true that a pre-digital stopped clock is right twice a day, when will New Albany learn to tell time?
When I was on the Economic Development Commission, we approved $50,000 of TIF to go to build-out for WindStream’s new office. It was a loan, but the loan would be forgiven if WindStream created X-number of jobs in Floyd Co. within three years.
That was TIF to assist a private company. I know some people would disapprove but I believe it was a wise investment by the city.
First Jeff, your numbers are misleading. With WindStream, we already had the $50,000 and could have spent it anywhere. We don’t have $18,000,000 and without Mr. Bobo’s project won’t have $18,000,000. His project in partially self-financing, a fact you seem unwilling to acknowledge.
Let’s say that $12,000,000 comes from new, project generated TIF bond revenues and are serviced entirely out of new tax revenues from the project. If that’s the case, then it’s fair only to ask if public benefits outweigh the benefits from the next best thing New Albany could have done with the $6,000,000 it spent out of pocket on the project. That’s an intellectually honest question that doesn’t distort the true cost to the public.
I’ve heard several people say categorically that public money should not be used to support a private business. We did that with WindStream. Is a public $50,000 investment worth the prospect of 500 new good paying jobs? While a few narrow minds would say no, I believe there is strong public support for such investments. If you support $50,000 in TIF for WindStream, than you cannot honestly say you oppose Bobo’s project because it taps into public dollars. You can oppose it for another reason, but not because of the public element.
Instead of knocking it outright, we need to talk about public costs versus public benefits. Jobs are one measure of public benefit but it’s not the only one. For example, parks do not create many new jobs, but they do benefit the public. Bobo’s project, if completed, would visually reconnect the central business district with the river. It’s a benefit not measurable in dollars and cents and thus one where the benefit will be much debated. Also, if you claim you want to withhold judgment until seeing independent economic estimates on total impact from increased employment and non-property tax base, I can respect that. Personally, I cannot respect the claim that this will cost the city $18,000,000 or that the city never should used TIF to assist a private business.
Dan, I want to make sure that I understand something. When you said that the EDC "...approved $50,000 of TIF to go to build-out for WindStream’s new office", what exactly was that?
Years ago I knew Jude Wanniski when I was serving an internship at a church in New Jersey. Wanniski is the person who actually coined the phrase 'supply side economics' and was one of the biggest proponents of this in the late 70's and early 80's.
His attitude about people who were poor was pretty consistent. To him, all poor people were lazy and/or stupid and deserved what they got. He found any outreach from the church to care for the less fortunate to be a silly waste of time.
Secondly, he laughed, not unlike this picture, at the concept of 'trickle down.' Trickle down was a political phrase to make it appear that it was beneficial to everyone. Supply side economics was never meant to trickle down at all. People get rich by NOT having their money trickle out of their pocket. The economists who proposed this, knew this. The politicians invented the verbiage to get elected. The policy was never designed for anyone other than those at the top.
"They" are still laughing. Happened to me a week or so ago. Mentioned that I didn't believe in trickle down. That tickle up was more efficient AND fairer. My(our)State Rep. just laughed.
In fairness, it is actually believed now as established fact. A myth perpetuated long enough and consistently enough becomes a de-facto 'fact' even when it's little more than fiction. Ironically, most of the people who embrace it now don't benefit from it in the least.
@Mark - WindStream leases from Purdue in their business incubator. The Purdue space is more or less a shell, as I understand it. WindStream and Purdue together approached the EDC about using TIF to build out that shell to fit WindStream’s specific needs. If I recall correctly, it’s mostly for office space as units will be manufactured elsewhere in the county.
@Gina - I’m not sure. It might be more than $6M or might be less than $6M. I’ve not seen the final proposal.
Personally, the money NOT covered by TIF is my biggest concern for this project. When I last heard Bobo speak (a few months ago), he was clear that at that time, he was not certain on what the non-TIF contribution would be, if any. For example, there was the possibility of Army Corp. money funding part of the levee cut, but this was far from a sure thing.
If the final number is $6 million from general funds, or EDIT, etc., and if you believe that’s too rich for one particular project, that’s a position I can respect even though I may see it differently.
Dan, Thanks for detail. Not sure that I agree with forgivable loans out of TIF but that's another discussion.
As for the downtown project, some of us are being told, by a member of the administration, that there in NO risk to the city. That doesn't seem to jive with what you are saying.
The deal could be structured such that there’s no material risk on the city. Whether that's the deal we have or not, I don't know. I've not seen the final proposal.
Thanks, M.
ReplyDeleteYou are welcome.
ReplyDeleteAnd "we the people" just elected a bunch of these "comedians" to represent us. How much wider does the wealth gap have to grow before "we" wake up.
ReplyDelete?
ReplyDeleteMy guess is at least another $12-18 million for some Reagan Democrats.
ReplyDeleteNow, that's funny, Jeff!!
ReplyDeleteWhen I was on the Economic Development Commission, we approved $50,000 of TIF to go to build-out for WindStream’s new office. It was a loan, but the loan would be forgiven if WindStream created X-number of jobs in Floyd Co. within three years.
ReplyDeleteThat was TIF to assist a private company. I know some people would disapprove but I believe it was a wise investment by the city.
So guaranteed jobs justified a private TIF expenditure of $50K?
ReplyDeleteAssuming s similar cost per job as WindStream, how many equivalent jobs should River View have to contractually guarantee to justify $18 million?
First Jeff, your numbers are misleading. With WindStream, we already had the $50,000 and could have spent it anywhere. We don’t have $18,000,000 and without Mr. Bobo’s project won’t have $18,000,000. His project in partially self-financing, a fact you seem unwilling to acknowledge.
ReplyDeleteLet’s say that $12,000,000 comes from new, project generated TIF bond revenues and are serviced entirely out of new tax revenues from the project. If that’s the case, then it’s fair only to ask if public benefits outweigh the benefits from the next best thing New Albany could have done with the $6,000,000 it spent out of pocket on the project. That’s an intellectually honest question that doesn’t distort the true cost to the public.
I’ve heard several people say categorically that public money should not be used to support a private business. We did that with WindStream. Is a public $50,000 investment worth the prospect of 500 new good paying jobs? While a few narrow minds would say no, I believe there is strong public support for such investments. If you support $50,000 in TIF for WindStream, than you cannot honestly say you oppose Bobo’s project because it taps into public dollars. You can oppose it for another reason, but not because of the public element.
Instead of knocking it outright, we need to talk about public costs versus public benefits. Jobs are one measure of public benefit but it’s not the only one. For example, parks do not create many new jobs, but they do benefit the public. Bobo’s project, if completed, would visually reconnect the central business district with the river. It’s a benefit not measurable in dollars and cents and thus one where the benefit will be much debated. Also, if you claim you want to withhold judgment until seeing independent economic estimates on total impact from increased employment and non-property tax base, I can respect that. Personally, I cannot respect the claim that this will cost the city $18,000,000 or that the city never should used TIF to assist a private business.
Dan, I want to make sure that I understand something. When you said that the EDC "...approved $50,000 of TIF to go to build-out for WindStream’s new office", what exactly was that?
ReplyDeleteYears ago I knew Jude Wanniski when I was serving an internship at a church in New Jersey. Wanniski is the person who actually coined the phrase 'supply side economics' and was one of the biggest proponents of this in the late 70's and early 80's.
ReplyDeleteHis attitude about people who were poor was pretty consistent. To him, all poor people were lazy and/or stupid and deserved what they got. He found any outreach from the church to care for the less fortunate to be a silly waste of time.
Secondly, he laughed, not unlike this picture, at the concept of 'trickle down.' Trickle down was a political phrase to make it appear that it was beneficial to everyone. Supply side economics was never meant to trickle down at all. People get rich by NOT having their money trickle out of their pocket. The economists who proposed this, knew this. The politicians invented the verbiage to get elected. The policy was never designed for anyone other than those at the top.
"They" are still laughing. Happened to me a week or so ago. Mentioned that I didn't believe in trickle down. That tickle up was more efficient AND fairer. My(our)State Rep. just laughed.
ReplyDeleteIn fairness, it is actually believed now as established fact. A myth perpetuated long enough and consistently enough becomes a de-facto 'fact' even when it's little more than fiction. Ironically, most of the people who embrace it now don't benefit from it in the least.
ReplyDelete"...next best thing New Albany could have done with the $6,000,000 it spent out of pocket on the project."
ReplyDeleteIs this the starting figure for cost benefit analysis?
@Mark - WindStream leases from Purdue in their business incubator. The Purdue space is more or less a shell, as I understand it. WindStream and Purdue together approached the EDC about using TIF to build out that shell to fit WindStream’s specific needs. If I recall correctly, it’s mostly for office space as units will be manufactured elsewhere in the county.
ReplyDelete@Gina - I’m not sure. It might be more than $6M or might be less than $6M. I’ve not seen the final proposal.
Personally, the money NOT covered by TIF is my biggest concern for this project. When I last heard Bobo speak (a few months ago), he was clear that at that time, he was not certain on what the non-TIF contribution would be, if any. For example, there was the possibility of Army Corp. money funding part of the levee cut, but this was far from a sure thing.
If the final number is $6 million from general funds, or EDIT, etc., and if you believe that’s too rich for one particular project, that’s a position I can respect even though I may see it differently.
Dan,
ReplyDeleteThanks for detail. Not sure that I agree with forgivable loans out of TIF but that's another discussion.
As for the downtown project, some of us are being told, by a member of the administration, that there in NO risk to the city. That doesn't seem to jive with what you are saying.
The deal could be structured such that there’s no material risk on the city. Whether that's the deal we have or not, I don't know. I've not seen the final proposal.
ReplyDelete