Economic development is a hot topic these days. It goes without saying that the success of a community is tied to its economic strength. Times change, economies ebb and flow and business and industry will evolve. In good times, and in bad, policy tools are used to promote the economic health of the community.
In Evanston, job creation, increased sales taxes, increased property values, infrastructure development and improved public facilities, are among the goals we are trying to achieve.
Evanston is facing many challenges, and, with more on the horizon, it is important to remain attentive to the economic health of the community. The City has assembled a strong team that understands these challenges and that has the vision and energy to tackle the problems we face in a proactive manner.
Recently, I have voted against a number of the economic development proposals that have been presented to the City Council. I truly wish the best for each of these projects; they all present an opportunity to improve the economic, cultural and day-to-day living environment in Evanston.
A “no” vote does not mean that the project or business idea is a bad one. For me, it is usually a statement that our City should take a different approach to supporting the business community and decline to provide cash or equivalent subsidies.
I have been reluctant to support many of the economic incentives for two primary reasons.
First, I believe that our City Council did not adequately plan for this level of economic development funding during the budget process. We use a variety of financial tools to help fund those projects, but ultimately, the result is the same.
Decisions are being made to provide public money to support a private business or enterprise. For example, we intend to use parking fund money to purchase land for a parking lot. At first glance that makes sense, but when that property is essentially used for one business, that is a subsidy for that one business.
My second reservation is a philosophical concern about fairness. In our economic environment, I believe that funding in the form of a subsidy or a loan should be limited to circumstances where assistance is necessary to “level the playing field.”
For example, the City participated in the environmental clean-up costs for the Gordon Food Service building. The necessary remediation work at the site presented an additional burden to move forward with development of that land.
The financial assistance from the City helped the project move ahead and helped put the business on more equal footing.
There are other views on economic development that appear to be prevailing these days.
There have been recent instances where we have made a choice to support a business for the “return on investment” (ROI). Projected sales and other taxes alone are not enough for me to accept a return-on-investment theory.
Those taxes exist, in part, to offset the burden placed on infrastructure and the operation of the surrounding community. When a subsidy is granted, and the ROI calculation is based on the subsidy alone, that calculation fails to account for the fact that the tax revenue is also supposed to be paying for other things, not just providing a return on the amount of the subsidy.
In my opinion, taxpayer money is not for “return on investment” purposes alone. There are many who disagree, but when the City gives support to one business, to the exclusion of others that have struggled without subsidies, we are providing an unfair competitive advantage to that business.
It is difficult for me to say “yes” to provide funding to someone with a good idea when a business-owner down the block has fought to keep going, or spent their life’s savings to keep the doors open.
If we choose to continue supporting private businesses in this way, we should be more open and transparent in the process.
If the City intends to purchase a property or offer a subsidy, then the opportunity should be fully disclosed and promoted. A plan and budget should be developed by the economic development team, and the City should select the best responsive proposal.
On the other hand, if we scale back incentives, there are other ways to spend that money. We always have the option to invest in our unfunded obligations and address some of the line items on our long list of capital needs.
Last week the City hosted an outstanding economic development summit that brought together people from all aspects of our economic community.
That summit reflected the economic vision that I see for Evanston.
There will always be differences of opinion, but I know that each decision maker cares about this City, and the people who live and work here. It is my expectation that this collective dedication will get us through a challenging time, and will get us back on track.