Saturday, October 19, 2019

City Council, October 21st - Subsidies and Incentives

Maybe our baroque - and quite possibly broken - system of property tax abatements and other incentives squirreled away in our Urban Renewal Areas and their grants, our Enterprise Zones, and all the other City programs for Economic Development will finally get a publicly available assessment that is not merely soothing bromides.

Sanyo Solar, back in May, 2013 - Still worth $42 million?
First Sanyo, rebranded as Panasonic, now mystery firm
The City's made no attempt to assess!
Monday Council meets for what looks like the first in a series of "Work Session[s] on Financial Incentives."
The City and its Urban Renewal Agency currently provide business and development incentives that include Enterprise Zone incentives, Urban Renewal incentives, and the Multi Unit Housing Tax Incentive Program. Additionally, the City has four federally-designated Opportunity Zones which provide federal income tax incentives.

This work session will provide an update on activities in the Fairview Urban Renewal Area and a proposed new single-property urban renewal program to incentivize affordable units within new market rate multi-family developments. A second work session will be conducted early in 2020 to discuss the City’s remaining incentive programs and urban renewal areas.
Do we even meet these
disclosure standards from 2015?
But Councilors will need to be prepared to drill into detail and ask harder questions. The Staff Report ends with reassuring vagueness:
Incentives are a valuable tool for stimulating investment in the community, revitalizing blighted areas, creating jobs, and building affordable housing. The range and variety of the City’s incentive programs are complex and intended to meet community needs on many levels. Unfortunately, there are limitations on these programs that restrict them from being available city-wide. The current and subsequent work sessions will provide further context on how these incentives are used, why they are available in certain locations and not others, what they have accomplished, and the future vision for these programs.
That "incentives are a valuable tool" is merely asserted! This is what should be proven. Every quarter Council gets an update that assumes the effectiveness of these incentives. The whole reporting scheme begs the question.

We never go back, at least publicly, and look at whether grants, abatements, and other subsidies actually achieve their objectives. Did the incentives work?! All we get are statements that a project is "active" or "completed." Hopefully "what they have accomplished" will be detailed and argued, not merely asserted, and that there will be finer evaluation of degrees - as in, this subsidy was more effective than that subsidy. The City should be able to say, "Well, this one failed and here's why" and "This one performed better than expected, and we should consider doing more like this." Why isn't there a better assessment loop? (A recent example: NORPAC is ending; how does the investment in the Henningsen facility on Madrona look now? And will we find "prime" prosperity in our new warehouse facility that's so efficient even bathroom breaks are timed closely?)

Reporting example: A partial list of downtown URA grants
DAB packet Jan 25th, 2018
And what is the city-wide total of property tax abatements and loss of municipal revenue?

Council Work Group Report on Sustainable Services, 2017
As we look at new revenue sources, are there gains to be made by shutting down inefficient or unnecessary subsidy programs that leak city revenue without sufficient benefit to the public?

And how much is the Mill Creek Corporate Center and that general area southeast of Kubler/Cordon costing in total infrastructure subsidy and in property tax abatements? It just seems impossible that that's going to be a net gain for the City and instead seems like it is poised to be an textbook example with industrial land of the "growth ponzi scheme" Strong Towns so insistently critiques.

"Now for Prosperity" - Homer Davenport, late 1890s
(This may be on display in Silverton City Hall, also)
Also on the agenda are the interviews with candidates for completing Councilor Cook's remaining term in Ward 7. (See previous notes here.)

Update, a little after 7pm on Monday - Nordyke was elected by a 4-3-1 vote. That singleton? Even though Bonnie Heitsch had withdrawn earlier as Salem Reporter reported, she attracted one vote. So that gave Nordyke a plurality instead of a straight majority. It's a little odd. But any revote would surely resolve 5-3.


Salem Breakfast on Bikes said...

(Updated with Council vote for Nordyke)

Anonymous said...

Looks like you're not the only one with some uncertainty about the Nordyke appointment -

Salem Breakfast on Bikes said...

They resolved the uncertainty over the Nordyke appointment by a 6-2 vote, so Sund had one defector, and presumably the Heitsch vote shifted also.