By: Diane Benjamin
Tonight the Bloomington City Council will approve an Enterprise Zone. The majority will vote yes because they believe government creates economic activity.
From the Illinois Department of Commerce and Economic Activity website:
The Illinois Enterprise Zone Program is designed to stimulate economic growth and neighborhood revitalization in economically depressed areas of the state. This is accomplished through state and local tax incentives, regulatory relief, and improved governmental services. http://www.illinois.gov/dceo/ExpandRelocate/Incentives/taxassistance/Pages/EnterpriseZone.aspx
Why is Texas creating millions of jobs while Illinois is losing them? Keep that question in mind while reading on.
From the packet, page 277:
STRATEGIC PLAN SIGNIFICANCE: Objective 3a. Retention and growth of current local businesses; 3b. Attraction of new targeted businesses that are the “right” fit for Bloomington; 3c. Revitalization of older commercial homes; 3d. Expanded retail businesses; 3e. Strong working relationship among the City, businesses, economic development organizations. Objective 5b. City decisions consistent with plans and policies. Objective 6b. Downtown Vision and Plan used to guide development, redevelopment and investments; 6d. Healthy adjacent neighborhoods linked to Downtown; 6e. Preservation of historic buildings.
What is a “right” fit and who gave the Council permission to decide what businesses locate here? Does winning elections give them that right? Obviously Judy Markowiz thought she had a “right” to build a Coliseum. We know how that is working out! Other Councils have made similar blunders. 10 years from now we will be talking about this Council’s blunders.
Also from the packet:
In 1985 the City partnered with the Town of Normal and McLean County in the creation of an Enterprise Zone (EZ). Under the EZ program, as authorized by the State of Illinois, eligible developments may qualify for investment tax credits, reduction in sales tax liability and utility tax credits provided certain investment and employment thresholds are met. The 1985 EZ is set to expire on July 1, 2016. The Bloomington-Normal Economic Development Council is leading the effort to secure a replacement EZ for the area.
In other words, everybody else gets to pay more in taxes so government can pick the “right” fit.
The only good news is the Enterprise Zone needs to be approved by the Illinois Department of Commerce and Economic Opportunity – in 2014 the City was turned down. This time the local governments involved plan to use Mitsubishi closing to get it through, however, Bloomington is coveting the ability to attract businesses downtown. See the bottom of pages 277 and the top of 278.
Just like Bentley and Giebelhausen showed up at Council to garner free money, businesses probably will be attracted. They will get tax breaks not available to competitors already here. Sounds like a repeat of Green Top Grocery – if a local business is hurt – too bad.
The State of Illinois was hurt by Mitsubishi – none of the State income tax collected from employees was given to the State. Mitsubishi kept it. We all paid more to bribe Mitsubishi into building here.
If business is attracted to downtown, the infrastructure will needed updated. For example, the water and sewer system isn’t capable of supporting a hotel. Citizens will pay for government’s vision. If another local hotel closes because the market can’t support the new one, too bad.
Payments for economic development tonight total more than $76,000 (see previous post). The Bloomington Downtown Association wouldn’t exist with your money. The Economic Development Council and the Area Convention and Visitor’s Bureau need your money too.
All these agencies and the Bloomington staff paid to promote economic development exist to pick who wins government support and who doesn’t qualify.
Yes, capitalism is dead. It’s no longer the “right” fit for Illinois. For Texas it is.
I had to add this:
“Overall, the consensus on the effectiveness of enterprise zones in the US is mixed at best. Lambert and Coomes (2001) found that the Louisville, Kentucky enterprise zone mostly benefited large corporations rather than small entrepreneurs and did not benefit local neighborhoods at all, even though community re-development was a goal. More importantly, in a book that reviewed most major enterprise zone studies done in the 1980s and 1990s as well as conducting its own original work, Peters and Fisher (2002) consider most state and local enterprise zone programs to have come up short in achieving their goals and objectives. [16] [17]”
https://en.wikipedia.org/wiki/Urban_Enterprise_Zone#Further_reading
The following is a research article. The most interesting is the summary near the end of the report which is 19 pages long.
http://www.house.leg.state.mn.us/hrd/pubs/entzones.pdf
Wasn’t the Outlet Mall part of the Enterprise Zone or was that part of the Westside TIF?
The local area will not grow unless the State gets its act together. The BN Advantage group along with the Mayors, Councils, County Board and State Representatives should form a coalition and go to Springfield. That would be time and money better spent. Let those ED people earn their keep.
Walmart and the gas station were part of a TIF, not sure about the outlet mall
You know I can’t remember if that Outlet Mall was or not part of a zone. I remember a local Realtor who pushed for that. I don’t remember his name, Ed someone, but I recall the face. He had an office there at that round building at the corner of Veteran’s Pkwy and east Washington where Jimmy John’s is at.
That turned out to be a flop for sure. There were stores there when it opened but gradually they closed. I want to say that happened during the early to mid 1980’s when there was an economic downturn. I know Mitsubishi wasn’t here.
Heyworth I believe tried to create an enterprise zone via a TIF around the late 1990’s when they tried to lure Walmart to build a tire distribution warehouse there next to Rt. 51. It seems to me the fallout was over what all Walmart wanted. They wanted Walmart to buy the building and ground and commit to ownership and Walmart wanted to only lease I think was the issue.
Government never creates jobs. About the only exceptions would be like David Hales two assistants as an example. Even then I’m not sure they qualify as being jobs but more like place holders.