Friday, December 14, 2007

Tax Abatement Bamboozle at City Council Meeting

In Tuesday's city council meeting, councilman Glenn Hines mentioned that blogs have been critical of the council's decision on several recent tax abatements. He reminded everyone how important they are and wanted Elissa McGauley to help explain to everyone why they give these abatements and why they are considered economic development.

Now the problem with this is that the entire discussion came about after the council approved the expansion of a UPS facility here in town that will create several well-paying jobs. Nobody is arguing against such abatements, yet Hines and McGauley use this example to explain why abatements, in general, are important. Specifically they talk about how employers could leave the area or not choose to expand their business without the abatement.

Now readers of this blog will catch their bamboozle right away. We all know that the abatements we've been critical of were for a McDonald's (that was already built), a Subway (which violates the city's own downtown design guidelines), and a subsidized housing project that will create one job. Are we really afraid that Subway and McDonalds will choose to take their business elsewhere if we don't subsidize them? More importantly, do we care? Clearly nobody comes into the community or spends more money in the community because we have 1 more McDonalds or Subway. That's the real point here - the abatement was unnecessary and irrelevant but it's now opened the floodgates.

Go ahead and watch the video below, it's almost unbelievable that they attempt to use a legitimate use of abatements to explain why bloggers shouldn't be critical of all abatements. (Note: The audio and video are slightly out of sync due to YouTube's processing but I don't feel like fixing it)

8 comments:

LP Mike Sylvester said...

They do think we are stupid... No doubt about it...

Mike Sylvester

J Q Taxpayer said...

The only thing anyone was ever confused on was the tax abatement based on total value or improvement value. Then again maybe some people setting at the very table did not know for a fact...

I am thinking of opening a gym shoeshine cart business outside of Harrison Square ballpark. I wonder if I can get a tax abatement on $736 of capitol equipment?

Oh well, we are so stupid we are just so lucky to have such a great Mayor and staff. Just think what will happen once he goes.

Final note... anyone else see the brank new SUV the FWPD is driving. It appears the front wheel Chevy's just could not cut it. So now we have command officers driving gas spitting SUVs. Sounds like it goes right in with the Mayor's green plan.

John Good said...

Jeff - How does this relate to these abatements? I'm a bit unclear on this matter. Are we talking about two different issues here?

Rachel said...

Exactly, Jeff. I fully believe in the economic development power of tax abatements to keep Fort Wayne competitive in high-wage jobs. National fast food restaurants, while providing jobs, are not deciding to locate in an area because of an abatement. They are locating there for proximity to customers. Let's hope some of our new council members will be a little more astute in the use of tax abatements.

J Q Taxpayer said...

The concept of the abatements was to bring in high paying manufacturing jobs that would employ the masses. Now it has been correctly changed to bring in companies that produce products that employ higher then average wage earners.

The vision was never to provide abatements to companies providing low paying jobs. PERIOD.

I am not sure how they avoid going down the path they have in the future. The arguement can be made that it has been done for these companies and why not my company.

As Southtown Centre takes off who else is going to want an abatement to put up more food places? What happens if a small hotel wants to develop out there?

Phil Marx said...

I think I should ammend my previous request that the City buy me a car. I want a van instead. Vans get worse mileage than cars, so just think of all the extra money I'll be spending on gas. Of course, I'll frequently be going through the McSubway drive-through also.

All of this money will be spent locally, so it really won't cost taxpayers anything! It's an investment.

Jeff Pruitt said...

John,

Same Subway. This part of the article is referring to the abatement:

"Minnick may also receive a tax break for his new restaurant because of its downtown location."

This has already been approved so as long as they create the 2 full time jobs they promised they will receive the abatement...

Robert Enders said...

Jeff,
The UPS facility is just following the market, just like McDonald's and Subway. UPS is no more worthy of an abatement than a fastfood restaurant.