Jeez, what has it been, two weeks? Sorry, readers, work has just piled on higher and deeper this summer. We have a few reporters out on a special project so the rest of us have to pick up the slack, and a few reporters these days is a very large percentage of the reporting staff. Blogging is not the top priority when you have to fill the newspaper.
I don’t even know where to start. Maybe I should just summarize a bunch of stuff that I’ve been thinking of blogging about, but had no time:
The frank discussion at City Council about the proposed sales tax ballot measure surprised me. Council members basically said voters are gonna be pissed about taxes in November — mostly aimed at the federal level – and the Library Board still doesn’t have all the answers to questions voters might have so chances of success are slim. The Library Board decided it better heed the council and agreed to move the ballot measure to a special election in early April, in time for National Library Week.
Covering politics, I’ve always thought the rule of thumb was that you want potentially tough ballot measures — tax increases are always iffy – in the general election rather than special elections. This is because people that hate taxes tend to hate them enough to turn out no matter what while people that want whatever the taxes would pay for tend to not feel so strong and aren’t as committed to turning out for the election.
You’ll remember how badly the special election went for the county when it sought home rule authority, which many felt would allow it to raise sales taxes.
The council seems to be betting that people that love the library are as willing to turn out for a special election if not more so than people that hate taxes. And that some of those book lovers are also going to be in a foul mood in November.
There was also some interesting discussion about whether voters would prefer a bigger tax burden for a shorter amount of time — 1 percent for 2 1/2 years — or a more moderate tax burden over a longer time — 1/2 percent for 5 1/2 years. Either way, the tax would raise about $18 million.
I would imagine that that’s a conservative estimate — nobody wants to run out of money — so chances are the library would probably have a bit of a surplus at the end. This would be especially true if it were built at the site of the future Park District wellness center down on 40th Avenue South. The cost of the two sites that the Library Board has been looking at — the old Leevers supermarket and farmland next to the old Rex electronic store — is estimated at around $1 million. So free land would free up $1 million for whatever the library needs.
Now that I think about it, if that’s the case, the ballot language better not be as restrictive as the one for the Alerus Center. You’ll recall the palm-face moment when the council realized that it can’t use the 3/4-percent sales tax dedicated to the events center to subsidize operations thanks to the way the ballot was written. I had a copy of the proposed library ballot measure some where, but now I can’t find it. Maybe the city did learn from its mistake last time.
Speaking of the Alerus Center….
The Alerus Center’s $250,000 concert fund‘s pretty much a go, and the commission can commit that entire amount to any concert without going back to the council for final approval. It seemed to me that the council had wanted final approval, at least after that report from the task force formed by the mayor to fix what ails the events center. But the report was more nuanced than that:
If the commission is presented with the opportunity to sponsor a major event which is not in its budget which would require the commission to expend funds not in its budget or the commission to purchase and/or guarantee the event, before the commission could commit to sponsor or guarantee the event the commission should make a request to the City Council to have an nonbudgeted expenditure approved by the city.
So the commission can guarantee concert promoters anything up to $250,000, and if they’re going to guarantee some monster concert like the Britney Spears one, which exceeded the $250,000 by $600,000, they have to ask permission.
Actually, this makes a ton of sense. If I remember right, former Council member Mike McNamara wasn’t too pleased with the way the Alerus Center commission put the whole city at risk for $850,000 without actually having the money. Basically, if the concert had been a disaster, the commission would’ve said "oops" and gone to the city to ask for more money. Boy would that have looked dumb.
Renaissance Fund Organization
Let’s fast foward to tonight. Being under pressure with all these stories has made me rather cranky and I got a lot crankier watching the finance committee play politics, or whatever the hell all that hemming and hawing was about.
So there’s this $2.5 million in tax credits that the state allocated to cities with Renaissance Zones. The way it works is cities would form Renaissance fund organizations and use the credits to attract investors for projects, half of which must be in a Ren Zone and half of which can be outside. Investors would see their state tax liabilities cut by 50 percent.
The credits have been available since 2009. Fargo already got half of the $2.5 million, but Grand Forks didn’t apply for it because city leaders didn’t want a city-run investment fund. I’m guessing this is because private groups didn’t step forward here as they did in Fargo.
Now, a private group, the Center For Innovation Foundation, has stepped forward seeking tax credits for a tech park north of the Alerus Center. And did the city greet them with open arms?
What do you think?
It’s hard to show the almost insulting tone of the discussion — you can watch the video here when the city posts it in a few days, it’s agenda item No. 1 during the July 26 meeting – but there was this long maybe-we-should-maybe-we-shouldn’t back and forth while the foundation representative, Bruce Gjovig, stood there waiting to defend his proposal.
A bunch of cats playing with a mouse comes to mind. Actually, it was mostly one cat: Committee Chairman Doug Christensen. He must’ve been incredibly bored to let the discussion drag on for 30 minutes in what was supposed to be an hour long meeting with five other agenda items.
First, Doug wondered if, given the location Bruce is suggesting, maybe the council shouldn’t think about using the tax credits to bring in a big retailer.This foreshadows what Council President Hal Gershman said later, which was that he’d heard rumors of major retailers sniffing around that area.
For years and years, city leaders and economic development experts have said the way to grow the economy is to create manufacturing or tech jobs that not only pay well, but also export goods and services outside the regional economy and importing new dollars. Nothing against retail, but retail doesn’t create jobs that pay well and mostly relies on regional shoppers.
So you can imagine my confusion when someone suggests using tax credits to attract retail and rumors at that.
Hal then asked whether the tech park would be filled with private businesses that pay property taxes or university buildings that don’t.
Bruce said the tech park would be private, though the university might consider putting the university system data network center there — the same one that would’ve gone by the Civic Auditorium downtown if it had gotten funding last biennium — because of the redundant power lines and fiber optic lines the tech businesses would bring.
After the discussion wandered off into some technical details, Doug returned to the point and said he’s unclear why the city would fund a university project and that he wouldn’t want to use tax credits on the data network center.
I’m not sure what this weird line of reasoning is about, but UND is a state entity and the state doesn’t pay itself taxes. The last I checked, 50 percent or 100 percent of zero is still zero.
Bruce got a little annoyed with this and said he can assure the council the tax credits would not go to a state building. "That’s a preposterous suggestion."
Doug then does one of those things that often infuriate other people that have appeared before council. He said the committee won’t make any recommendation on the Renaissance fund organization until details are fleshed out so, you know, maybe Bruce can do that. He’s just hearing oh so many other concerns, there’s the tech park, there’s retail and the city’s worried about the leakage of shoppers to Fargo.
What’s infuriating about this? Because it’s imperious and dismissive. Go do some more work and maybe I’ll let you have it and maybe I won’t. I have no idea how I’ll decide and I won’t give you a clue.
Bruce said the investors he has lined up are very sophisticated entrepreneurs who want to create new jobs, but if the "taint of politics" were on this, they would withdraw. They would frown on political decision made on private investments. (You can see the sort of people he’s talking about here.)
Doug said sarcastically that the fact that Bruce is at the council means there’s already a political taint involved.
Council Vice President Eliot Glassheim, who was mostly quiet up until now, finally got fed up and said: "This, to me, is a prime example of why we’re not Fargo." When people with money to invest come to the city, he said, the city ought to be nice to them. In Fargo, they don’t throw up all kinds of obstacles like this, he said.
Things wrapped up pretty quickly after that outburst. Doug said he doesn’t want to appear to be delaying things.
I remember thinking that this is one of those weird conflicts between the city and the university that pops up every once in a while when someone from the university comes asking for money.
The city guys think the university guys sometimes presume too much. The university is the city’s most important economic engine, they know it and they expect the city to know it and help them whenever they ask.
The university guys think the city guys sometimes play politics too much and demand too much control.
As a voter and a taxpayer, I often feel very parental when I see this conflict. That is, I’m pissed off and I don’t really care to find out who’s right; I just want the stinking little brats to get along.