I have advocated for an open and transparent discussion for GE Electric Works. While we patiently await the administration and the developers to negotiate terms, I contend that these details are vital to make a prudent evaluation of whether the taxpayers' money should be invested in the project.
Most of its supporters advocate the “field of dreams” argument – build it and they will come – pointing to recent downtown public-private partnership projects. They contend these projects have been successful, are propelling the city forward and GE Electric Works will be successful as well.
The project's consideration should be based on the interests of the city and the taxpayer. I am seeking spreadsheets that detail the business case, not glossy concept drawings, and am skeptical of the “field of dreams” premise because it is unfounded and untested. It is based on a series of local economic development myths.
Myth 1: Parkview Field was the catalyst for the public-private partnership trend.
All will agree it is a wonderful facility and an enjoyable venue to take the family. Conversely, it is a very poor public-private model to follow. The team pays no rent, and the one-sided deal is locked in for another 21 years. Meanwhile, the bonds for the ballpark and accompanying garage are $3.8 million per year and the taxpayer will service the ballpark's debt until 2034. Even though the hotel component has been successful and that ownership has broken ground on a new phase, taxpayers still are obligated to subsidize the original hotel to the tune of $250,000 annually for another 13 years.
Myth 2: A bonanza of private-sector development
There's no doubt that downtown has seen significant improvements since the ballpark, and I applaud the city for that real success.
However, “field of dreams” proponents point to 19 high-profile projects that totaled about $250 million of investment, stating that private-sector investment is robust. Although I don't possess a detailed study outlining the capital stacks for each of the projects, I have conducted a good faith effort to tabulate the public subsidies in those projects.
I am surprised to find more than $85 million of public subsidies (about 35 percent). This figure does not even include abatement subsidies that are probably in the range of an additional $35 million to $40 million (about 15 percent). Some recent projects have commanded the majority of their funds from taxpayers. Now, GE Electric Works is demanding more than 60 percent of the project in subsidy form. The lauded momentum has not only been created by taxpayers' investments, but has also been sustained by subsidies.
Myth 3: Downtown development has grown the tax base.
Proponents of this misconception believe that with the growth downtown, public-private partnerships are paying for themselves by expanding the tax base. However, even after a decade of public-private partnerships, downtown contributes little to the municipal property tax base. The main downtown tax increment financing district, the Civic TIF, which contains most of the iconic buildings downtown, only contributes $44,000 in city property taxes. Despite gross assessed value of $115 million in this downtown area, the rest of the property taxes are captured by the TIF.
Myth 4: Downtown redevelopment helps pay for municipal services.
Rather, Downtown TIF projects siphon away from vital services. Remember, the small amount of property taxes flowing out of the TIFs are funds that pay for police, fire, libraries, schools, etc. Downtown projects still consume these services and are subsidized by the other areas of the city that do contribute to the tax base. Despite capturing almost all the property tax money, the TIFs are loaded with debt payments. Although TIF was designed to pay for infrastructure in developing areas, the lack of available funds in the Downtown TIF requires further subsidies from city operating funds for basic infrastructure services such as street paving.
Please do not misunderstand me. I share the excitement of downtown's renaissance. Because I want it to continue, I aim to be fiscally responsible with the remaining funds we have.
Downtown is where the pulse of our community is easily found, a place of identity that makes Fort Wayne unique and special. The GE Electric Works project certainly merits full consideration and debate. However, close examination of the “field of dreams” philosophy reveals a need for caution because much of downtown's success may be in spite of our poor deals, not because of them. With so much of the limited public dollars on the line in GE Electric Works, shouldn't we demand more details?
Russ Jehl is the District 2 representative to Fort Wayne City Council.