NEW ALBANY — There’s no guarantee the facility won’t close, or that the bond will pass, but the New Albany City Council agreed Tuesday to proceed with the steps to foot a $7 million bond in hopes it will convince General Mills to keep the Pillsbury plant open.
By a 5-2 vote, the council approved a nonbinding resolution that stated its support of moving forward with the bond. The council and likely the New Albany Redevelopment Commission will have to cast ballots on the $7 million bond before it becomes official.
Councilmen Kevin Zurschmiede and Greg Phipps voted against the resolution, saying they need more details about the bond package before agreeing to use taxpayer funds to support a business.
Meanwhile, an academic rushed in where the politicians feared to tread ... except Zurschmiede and Phipps.
Should New Albany be giving General Mills $7 million?, by David A. Mann (Louisville Business First)
... But such offers aren't necessarily beneficial for cities. In general, this kind of move doesn't really pay off for cities because they will never recoup their investment through higher tax revenue, he said.
"They're just handing a company a pile of money," (Josh) Pinkston said. "If that's a good idea … why just General Mills? Why not hand out a big pot of money for other companies in New Albany?"
He described an incentive package such as this one as political risk management. City leaders do not want to be seen as the guys who let General Mills leave, he said. But paying companies to stay is not really efficient economic development policy.
"This is $7 million they are taking away from the taxpayers of New Albany and giving it to General Mills," Pinkston said. And, he wonders what the long-term cost of that would be.
Then again, Phipps is an academic, too. Perhaps we need more of them.
Bravo to Zurschmiede and Phipps for rejecting Dough Boy Gahan and his desire to be the Pillsbury Santa Claus.
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