The early state and federal governments issued incentives to build railroads and pay for explorers to continue our westward expansion. Much of the nation's early infrastructure, roads, bridges, even sometimes stagecoaches, were privately owned and incentivized. Mail delivery was sometimes privately owned and incentivized. It was necessary to build a nation and when the incentives became no longer necessary they ended.
Well, most of them ended. Admittedly, a few legacy incentives still exist but that's a subject for someone else's blog.
Incentives actually date back to long before the United States began. Queen Isabella of Spain granted an incentive package to Christopher Columbus in 1492 when he sailed off across the Atlantic and mistakenly landed in the Caribbean Islands thinking he was in Asia. That wasn't the first incentive package and history is full of hundreds if not thousands more examples. Incentives only became a real problem in recent decades when local governments, flush with sums of money that once even national governments could not raise, began to use incentives as a means to pad the pockets of the elite developer and banking class at the expense of those who work for a living.
And so begins the latest installment of my series Incentives in Greensboro, inspired by the many lies printed in Greensboro Mayor Nancy Barakat Vaughan's December 29, 2013 article titled, City Handles Incentives Effectively.
From The Reality of Tax Incentives (.PDF file) by: Dr Andrew Brod published in the Greensboro News & Record on September 24, 2000:
"Here’s my vote for an incentive package that should have been rejected, or at least repackaged. Early this year, the City and County approved incentives for United Healthcare to locate its new regional headquarters and expanded operations. Okay, but where? In last November’s municipal elections, virtually every candidate expressed support for redeveloping Greensboro’s downtown. Voters might have expected the City Council to follow through on this.
But the Council approved over $300,000 in incentives for United to locate way up in the Lake Jeanette area! Instead of using the public purse as leverage to promote a sensible policy, the Council helped contribute to suburban sprawl and the lines of commuter traffic on N. Elm St."
And who was the developer and commercial realtor of said property "way up in the Lake Jeanette area"?
Don't you also find it strange that with all this emphasis on developing downtown, our city council voted then and continues to vote today to grant incentive packages to projects 5, 10 and even 20 miles away from the city center? Right now, as you are reading this, Councilman Zack Matheny is working to provide Greensboro incentives to expand Triad Park, a megasite in Kernersville.
I sent the following public information request to the City of Greensboro on Feb 12, 2014.
"In 2000, City Council approved over $300,000 in incentives for United Healthcare to locate their corporate headquarters at 3803 N Elm St.
Please send me the following info:
Which council members voted yes and which council members voted no? Who abstained and why?
Who owned the property?
Who was the developer?
Who was the General Contractor?
Who were the commercial realtors?"
And then there was the most recent downtown Wyndham Hotel Incentive grant for $1.975 Million Dollars which touted a faked economic development study, no feasibility study and was in-fact, entirely illegal.
From Rob Bencini, Greensboro News & Record:
"In March of 2009, the chairman of the Guilford County Board of Commissioners proposed that the county give 100 percent tax rebates to anyone who built any commercial real estate improvements — new, expanded or upfit. The intent was to invigorate the local economy through investment in real estate development by removing the local property taxes on those structural improvements for the first three years. It was such a sweet gesture for developers and builders — and oh-so-wrong on so many levels."
He adds:
"Secondly, the incentive went to the builder and developer — not any lessee who might rent any property... No legal counsel from any level of government would green-light the proposal. The concept died a quiet death."
As Eric Robert noted in the comments to his post, Now...how could that be?
"Mujeeb was seen on TV smiling while advising council not to call it a tax rebate while his body language inferred that he believed it was...again the simple nuance in appellation may make it legal but is it Ethical???"
If you're not familiar, Mujeeb is S. Mujeeb Shah Khan, Greensboro City Attorney, who works at the discretion of the Greensboro City Council.
If state law prohibits Guilford County from giving these incentives to builders and developers would the law not be the same for the City of Greensboro? The idea is to incentivize the new or expanding business, not the developer. The Greensboro City Council seems to have completely lost sight of what incentives are meant to do. Or perhaps they just don't care.
The incentive package to Charles Aris Inc.went entirely to the developer, Oakley Capital LLC. The incentive package that was planned for Gerbling's Heated Clothing was to go entirely to John Lomax of Lomax Properties. The Wyndham Hotel incentive goes not to Wyndham who will be operating the hotel but to building owners Randal Kaplan and Milton Kern. The incentive package to Ashley Creek Apartments did not create even 1 single job and was in-fact, fraudulent. In the case of Ashley Creek the City actually misappropriated Federal funds. These aren't incentives, they are give aways to millionaires.
There are times when it is necessary to give incentives to private companies to provide the necessary infrastructure to grow the economy and provide services necessary to society that private industry might not have the capital to provide. Building a bigger tax base is not one of those necessities. As a matter of fact, the City of Greensboro is unable to provide any evidence that building a bigger tax base actually benefits the community overall. I challenge the Greensboro City Council and City Staff to show us proof that increasing Greensboro's tax base actually benefits the community overall.
As a matter of fact: That was my most recent Public Information Request.
You see, despite the fact that Christopher Columbus was lost, raped children, took thousands of slaves, committed genocide, was a horrible person who the queen later sent to prison and generally screwed up everything he set out to do, the incentive package given to him by Queen Isabella began what was at that time, the largest territorial and economic expansion ever before seen in Spain and with the exception of the United Kingdom, all of Europe. In other words, unlike Greensboro's incentive packages, Queen Isabella's incentive package did exactly what it was meant to do.
Please continue reading Incentives In Greensboro Part 25: Throw Me A Bucket O' Money
