"It's irresponsible to suggest the council haphazardly offers incentives to every company that makes a request."
Proven wrong repeatedly throughout this series. The Mayor also wrote:
"While economic development has been a major priority for the council, we have been careful to not use or take funding away from other city departments, programs or services. Instead, we have worked with staff to develop new programs such as the "Big Box" initiative, designed to lure new business to retail areas that need revitalization and that function as a loan instead of an incentive."
That was proven wrong in Part 2. And that's where I want to begin today. For you see, also in Part 2 was a quote from my friend and successful developer, Marty Kotis:
"The objective of the program was backfilling vacant big boxes and revitalizing areas, not necessarily job creation."
You see, the object of Greensboro's incentive packages is almost never job creation.
I've supported Marty because his efforts have been above board and within the law. The City of Greensboro returns an actual profit in the interest Kotis Properties pays on their loan at market rates and Marty proved himself by actually filling the shopping center for which he received the loan. And he did bring new jobs to Greensboro. But that hasn't been the case with most of Greensboro's incentive deals.
Take for instance the planned Gerbling's incentive package (Part 3) Gerblings had no intentions of bringing 25 new jobs to Greensboro and yet with Councilman Zack Matheny's help the deal was pushed through. I had thought Gerbling's was tied up in the corruption but it was Gerbling's that did the right thing and backed out of the deal when Gerbling's management realized Councilman Matheny had mislead them. Meanwhile, the largest commercial building in all of the Piedmont Triad remains empty.
Then there was the American Express Data Center. (Part 4) Nancy Baracat Vaughan and the economic development gurus are telling everyone that $19 Million Dollar incentive package was a great success but AmEx eliminated 1600 jobs locally. Then there was the secret $2,073,885.89 deal to developer Roy Carroll to build the AmEX Backup Data Center that never got built.
Blured? Don't you find it strange that at the same time American Express is laying off 1600 data center workers, Councilman Zack Matheny is pushing to spend over $400 million dollars to build new data centers at the old Guilford County Prison Farm?
Greensboro's oligarchs are promoting suicide among the poor, touting a downtown performing arts center and the Greensboro Strategic Plan as economic development projects while at the same time promoting an East Greensboro economic development plan called Balanced Economic Development: A Strategic Plan for East Greensboro and a Lee St/ High Point Road Corridor Plan that are all in reality, real estate development plans. None of these so called "economic development" plans address economic development but all of them promote real estate development.
From Wikipedia:
"Economic development generally refers to the sustained, concerted actions of policy makers and communities that promote the standard of living and economic health of a specific area. Economic development can also be referred to as the quantitative and qualitative changes in the economy. Such actions can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety, literacy, and other initiatives. Economic development differs from economic growth. Whereas economic development is a policy intervention endeavor with aims of economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP. Consequently, as economist Amartya Sen points out: “economic growth is one aspect of the process of economic development."
Also from Wikipedia:
"Real estate development, or property development, is a multifaceted business, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of improved land or parcels to others. Developers are the coordinators of the activities, converting ideas on paper into real property.[1] Real estate development is different from construction, although many developers also construct. Developer Louis Lesser drew the distinction in a 1963 New York Times article, "Developing is the key word. 'We don't build ourselves', Mr. Lesser stresses. 'We buy the land, finance the deal, and then we have the best builders build under bond at a fixed cost.'"[2]
Developers buy land, finance real estate deals, build or have builders build projects, create, imagine, control and orchestrate the process of development from the beginning to end.[2] Developers usually take the greatest risk in the creation or renovation of real estate—and receive the greatest rewards. Typically, developers purchase a tract of land, determine the marketing of the property, develop the building program and design, obtain the necessary public approval and financing, build the structure, and lease, manage, and ultimately sell it.[1] Developers work with many different counterparts along each step of this process, including architects, city planners, engineers, surveyors, inspectors, contractors, leasing agents and more. In the Town and Country Planning context of the UK, 'development' is defined in the Town and Country Planning Act 1990 s55."
You'll notice that neither mentions the other. And yet almost every incentive dolled out by the City of Greensboro and every incentive deal brought to them by Greensboro's economic development "gurus" was in-fact a real estate development deal first and foremost. In the last 2 years the only non real estate incentives considered by the Greensboro City Council have been the Proctor and Gamble package and the Whatcha Cookin' sitcom deal which were both brought before Council by companies that were already in Greensboro.
All the while, Mayor Vaughan, like her predecessor, ignores the Garner Study for Local Specialization, Competitiveness & Growth. They tried to keep it hidden but I got it anyway.
By the way, Mayor Vaughan wrote in her article:
"While economic development has been a major priority for the council, we have been careful to not use or take funding away from other city departments, programs or services."
In fact, while the sitcom deal later fell through the money was slated to come from the City's vehicle maintenance department:
"Where is the $300,000 coming from? The city changed its vehicle maintenance program, which saved about $300,000. Council members decided to spend that money on a loan for the "Whatcha Cookin'" show."
Blurry, don't you think? And had the police car, ambulance or fire truck not started on its way to that emergency call I guess they would have wrote that into the sitcom as well.
And from the same quoted article:
"The city has been taking about half a cent out of every tax dollar that goes into the general fund. They have been putting that money into an economic development fund. It added up to about $605,000 for 2012-2013. It will add up to $1.2 million for 2013-2014.
However, all that economic development money is already allocated. WFMY News 2 has put in a request to the city to find out where that money's going."
So is it true that all the economic development money for 2014 is already allocated? How can that be when coming this Tuesday night the City Council is considering a resolution approving an investment grant totaling $1,975,000 for the Elm Street Center Hotel project .That will be my next PIRT.
The grant is for all the property is worth. And remember: Grants don't get repaid-- ever.
People cry out, "Why no partnership to help the neediest?" I think we all know the answer: there's no profit in it for Greensboro's elites.
And their claims of Greensboro job creation? Over 50% of the jobs they claim to have brought to Greensboro are actually located in other cities. But you can bet someone made a mint developing the real estate.
Economic development and real estate development are not one in the same and while repeatedly I've attempted to get the City of Greensboro to show me evidence that their efforts at real estate development are actually helping create jobs and put people to work in jobs that pay sustainable wages the only answer I've gotten from the City of Greensboro to date is:
"Hello Mr. Jones.
We apologize that your request has taken so long to complete. We have requested several departments to review your request to see if they had any information pertaining to your request. Unfortunately, the City has not measured the economic impact directly attributable to the East Market Street streetscape project.
Sincerely,
Public Information Desk
City of Greensboro"
The City of Greensboro has no economic development policy. At least none they follow. The civic masturbation must end. All funding to 3rd party economic development agencies should be ended immediately and council members like Zack Matheny who was responsible for many of Greensboro's recent incentive deals needs to quit pointing fingers at others for doing exactly what he does. All city funded economic development projects need to be brought in-house and inside the city limits of Greensboro with efforts made to first fill the hundreds of thousands of square feet of already available space under roof before city funds are used to build anything new. And the notion that real estate development drives economic development must end. Real estate development is an economic indicator, not an economic driver-- smart leaders don't incentivize the indicators because it blurs the lines, throws off the numbers and makes it impossible to gauge the results.
Too bad Greensboro has no smart leaders.
Please continue reading Incentives In Greensboro: Part 23: GPAC As An Incentive Package
