Several City Council members such as Trish Swain and Rick Torres, in a story by Brian Lockhart of the CT Post, wonder how much money the city is leaving on the table because of tax breaks. Then again, how much would the city lose by not offering developers incentives?
Another tax break application before the Council will allow Wishrock Investment Group II LLC, of Maine, to purchase and upgrade 100 units of affordable housing on Norman Street in Swain’s district currently owned by the Bridgeport Rotary Club Housing Corp.
“I certainly see that we’ve driven many businesses out with our high taxes,” Swain said. “But you’ve just got to (wonder), how far do we go? Could we have struck a better deal? Are we giving away too much or just enough to make good things happen?”
… (Development Director) Kooris noted that it is common for American cities to have tax incentive plans to help encourage investment. Without them, Kooris indicated, Bridgeport might not be moving ahead with the long-dormant Steel Point harborfront redevelopment, the Eco-Technology Park that has revived dormant industrial sites or the numerous new housing developments downtown.
Full story here.
Remember regarding steel point, “Steel will be on site in August.” Still just the empty pad that I see.
I also would rather not hear any commentary from our council. They should be too busy using city money at Stop & Shop.
Giving out so many tax breaks just increases the burden on the already overtaxed homeowner. This developer says he will spend $32 million dollars on these housing units. He will pay $45,000-plus in taxes with the taxes going up 3% a year for 40 years. The chances of these wood structures still standing in 40 years are slim to none. They will be paying $500 per unit. I would like to pay $500 for my unit instead of $6,000-plus per year. Next we have a company from Maine that wants a tax break for modernizing existing housing. When does it stop? I would like a tax break so I can enclose my porch. When does it end?
That’s the issue with owning a home in the city. We take on all the tax burden. As usual, the working man is the one who struggles.
Kooris and the city council members should do some research (what’s that?) and review the original version of the tax incentive ordinance. This administration is willing to offer tax abatements for rental housing. This is not economic development. Rental units are liabilities because the city services are often not covered if fully taxed. These recommendations are comical. Has the city council asked Kooris if the board of representatives in Stamford have approved such deals, or is this the best he can do in Bridgeport?
Memo to David Kooris:
If it doesn’t make Cents, it doesn’t make Sense!
All land and buildings on the land has an identity in the Tax Assessor’s office except for streets, highways, bridges and sidewalks, I believe.
So each property where a deal is being prepared by OPED and their outside consultants bears some relation in terms, duration, etc. to deals done in the past. When Torres and others ask for the list, they should be able to go to the Grand List and punch in some codes for properties that have some exemption or special situation, like abatements. (It may take a little more time to figure out the specific deal on a specific property, but a list should be easy to produce.)
Without too much difficulty it would be easy to see how much abatement already exists in Bridgeport and see when properties will grow out of this assistance and become 100% taxpayers.
Forty-year deals really lock us in to an unknown future. And 3% may be right today, but the way the Federal Reserve has printed dollars, the value of those dollars have decreased and that will be recognized at some future date and then the 3% will look terrible. Perhaps the 3% should represent a corridor on top of the CPI or other measure of inflation. I remember the early 1980s and the shocking high rates of return running parallel with inflation.
And were we able to look at the deals themselves, perhaps the “rates of return” guaranteed by the proposals will have to become reduced, and a good look at the tenant mix for apartment properties needs to be eyeballed. Not every project seems to scream healthy economic development from what I have seen.
And a review of deals from the past will be instructive to the community being asked to subsidize today, if there are more productive ways of doing the deals as well as less productive. We need to be selective and you need good info well reviewed to do so. Are we close to that today in terms of a collaborative and comprehensive transparency from OPED, Tax Assessor and Finance Offices? Time will tell.
Deficit Theory is the idea 50 years of deficit spending at the federal level has raised prices to the point where municipalities are facing developers anxious for incentives. For the past 50 years Bridgeport has been losing businesses because costs–not taxes–have forced them overseas. This occurred across America, not just Bridgeport. The United States never lost its appetite for manufactured goods, we simply priced ourselves out of our own markets.
Any Council member who favors lower taxes yet grants an incentive is a hypocrite. Here’s why: you cannot give something to someone without taking it away from someone else. Put another way, giving handouts to total strangers takes money away from your constituents and puts upward pressure on future taxes.
Quack-quack-quack, Local Eyes. Tax incentives encourage development and creation of long-term jobs that pay decent living wages, increase tax revenue in the long run. Residents will have money to spend on big-ticket items like motor vehicles, houses, condominiums, etc. They will have more money to spend in the retail sector. All of this creates MORE employment. The City Council ought to stop handing the tax breaks to the friends of Bill and Mario and whoever sucks up to them. Steel Point is only going to create a few minimum-wage gigs. We need industrial jobs, not cashiers and burger flippers.
Kid,
Will you please provide us with one or two examples of the kinds of “tax incentives” you support? How long in effect and how are they working out?
The tax abatements being discussed and approved in Bridgeport seem to be solely about housing, building apartments, renovating apartment units and the like. The developers proposing these expenditures are not using their own money, but rather “other people’s money” from a lending institution and perhaps some public money and grants or credits, depending on the deal. But the deal still does not make sense to the lender and the debtor in these times without asking the City for the abatement.
At that point the City Council is not acting as if they understand taxpayer pain, and they are not forcing tighter negotiations for shorter deals and more rapid movement to market rates. They are not expert and they have not been broadly educated. But they are led to the water each time a vote is needed, and for the most part, the public is shut out of the discussion by committee chairpersons.
Truly democratic representation at a municipal level? Not. What to do? Ask your representative for a copy of the deals as they come down and time to explain their positions before they vote? A simple idea? And if they refuse to talk to folks in their district? Oppose them in 2015. Time will tell.
If the game is zero-sum, you are correct. However a growing economy has provided an opportunity to escape that limitation. But then we tried to expand the game even further with accepting debts and obligations without checking to see what that would do to us down the road … and now we are pretty far down the road. How does it look?
Making really long-term deals where no one has a crystal ball, and taxpayers do not have even a copy of the deal on the table does not make long-term sense. And when you are dealing with folks who do not live in your community it makes for serious questions.
The politicians in power think the public is too ignorant, or without knowledge (and that is why the info and matter is so tightly guarded and confusing in format in this City), and easily distracted (by water taxis, etc.) and ready to be manipulated into getting angry with each other rather than the folks who abuse their power and authority every day. We have a bad case of this in Bridgeport, but some folks are waking up to this unhealthy situation and resisting it. Time will tell.
JHM Financial Group isn’t building a community for Bridgeport, they’re building a 40-year annuity for themselves and using Bridgeport taxpayers to do it!
It’s the new capitalism. We subsidize the risk and privatize the profit. I would think both Adam Smith and Karl Marx are both rolling in their graves.
I’d like to know how much JHM donated to Finch’s campaign to get this tax break. If private homeowners contribute to the campaign, can we get some tax breaks? My taxes keep going up, services keep getting cut. Finch’s idea of economic development, low-income housing, is built by friends who get tax breaks.
Harvey Weintraub, that’s the road that must be followed. Is it Finch’s campaign to get this tax break or “friends of Bill?”