Mayor's bill proposing changes to economic incentive grants challenged; vote to be deferred

Monday, December 20, 2010 at 9:05pm

Metro Council members are questioning a bill introduced by Mayor Karl Dean and his administration that critics say would give too much power to the mayor’s office in determining what companies receive tax incentives in return for creating jobs.

But Metro Finance Director Richard Riebeling contends the proposal has been clouded by “misinformation,” while acknowledging the administration hasn’t “done a good job explaining the reasons behind it.” The real goal, he said, is to give Metro another tool to boost economic and community development in Davidson County.

Either way, the bill is set for a deferral at Tuesday’s council meeting at the request of Dean’s administration. The council had been slated to consider the bill on the second of three votes Tuesday. Riebeling, attending Monday’s meeting of the council’s Budget and Finance Committee meeting, said the ordinance would be reintroduced in January.

At issue is the way Metro offers economic and community development incentive grants for companies willing to relocate to or expand in Nashville. The incentive program, enacted by Metro in 1999 to lure Dell Computer Corp. to the area, is available to corporate headquarters that would bring 1,000 jobs within five years or a technology firm that would bring 2,000 jobs during that same timeframe, according to a legal analysis supplied by council attorney Jon Cooper. The grant’s dollar figure is capped at $500 annually per each full-time equivalent employee of the company.

Currently these types of grants, Cooper’s analysis reads, are paid to Metro’s Industrial Development Board, which uses the funds to “acquire, improve [and] maintain” property to benefit a private company. The board administers the grants, and the council must sign off on the agreements.

The new bill, however, would charge the mayor’s office of economic development, instead of the Industrial Development Board, with administering such grants. Alexia Poe currently leads the office. The council would still be required to authorize grants.

“In my opinion, this is like writing a blank check and giving it to the administration so they can hand out this money at will,” Metro Councilman Michael Craddock said. “We need checks and balances.”

But the scope of the bill goes further. It would also increase the number of companies eligible for the grant by lowering the job creation requirement to 500 jobs. Moreover, the ordinance would tweak how Metro signs off on payment-in-lieu-of tax agreements that typically allow companies to enjoy property tax freezes or reductions. Right now, these “PILOT” agreements require three separate votes via an ordinance, but the bill would change the requirement to a single resolution vote.

Councilman Rip Ryman has asked the administration to provide an explanation for the bill prior to its second reading.

Riebeling rejects the notion the ordinance would strip power away from the Industrial Development Board.

“There’s just a misinterpretation of what the bill does,” Riebeling told The City Paper. “We’ll just clarify it and go back to the beginning and give everybody an understanding of what we’re doing and who’s behind it.

“The focus is all about creating jobs,” he added. “That’s the only purpose behind it. We think this gives us some more tools to help us recruit businesses to our community. That’s the only purpose behind it. It’s not trying to take any power away from anybody. It’s been completely misrepresented that way.”

Asked for a response to Craddock’s claim that the proposal gives too much power to the mayor’s office, Riebeling said, “That’s just not right.”

“It all has to come to the council for approval,” he said. “I mean, read the bill. It’s real simple. [The bill] doesn’t say that the mayor can decide to give money to people. It says that we come up with a recommendation, and it comes to the council for approval. The mayor has a role. The council has a role. That’s all it does.”

A handful of Industrial Development Board members showed up at Monday’s Budget and Finance Committee meeting to watch from the gallery. Their position seems pretty clear. 

“I’m very much opposed to it,” board chair Nick Bailey said afterwards. “What’s accomplished by this bill is reducing the checks and balances and transparency that go into a project of this nature ... And after all, we’re talking about giving away tax dollars for companies to come here.

“I have no idea what the reasons for this proposed change are,” he said. “I just think it’s a bad bill. I haven’t heard anybody on the council so far say they think it’s a good bill.” 

 

14 Comments on this post:

By: govskeptic on 12/21/10 at 6:49

What is wrong with the current system, Mr. Mayor? Has someone on
the Industrial Development Board hurt your feeling or opposed an
idea? While possibly not perfect, this board when appointed on
knowledge and merit gives the City more brain power to consider
these type proposals than an inside circle of the Mayor's office!

By: producer2 on 12/21/10 at 7:11

agreed...

By: Nathe on 12/21/10 at 8:43

It is becoming pretty clear to me that our mayor is a megalomaniac with agendas that, since they don't track with public opinion, must be either for enhancing his own power, or benefiting hidden cronies and special interests OR most likely BOTH...

This comment is not based on partisan bias, but simple common sense observation.

By: bfra on 12/21/10 at 9:05

govskeptic - this board when appointed on
knowledge and merit gives the City more brain power to consider
these type proposals than an inside circle of the Mayor's office!
========================================

That's what Karl doesn't want, gov. He wants more leeway to spend taxpayer's money, as HE sees fit, not what is best. We need a NEW mayor, quick!

By: Community-carl-... on 12/21/10 at 9:53

It's just another power-play by Dean.,,,,possibly another part of his ongoing attempts to do away with the Fairgrounds by throwing around taxpayer's $$$ to
attract prospective busineeses to the Fairgrounds that he is attempting to steal from us, the public.

He is a devious person who is hell-bent on doing whatever he can to divide and conquer the proponents aadvocating for the Fairgrounds and all the traditional activities hosted there, including the racetrack activities.

I agree with bfra above...."We need a NEW mayor, quick!"

By: ds on 12/21/10 at 10:07

Thank you mayor for trying to bring jobs and development to Nashville. Most people in Nashville understand that the city's tax base is what funds services that the citizens depend on everyday.

By: bfra on 12/21/10 at 10:10

ds - Karl's got you fooled! That's for sure.

By: Kosh III on 12/21/10 at 10:14

It sounds like Dean wants more power to give more welfare checks away.

Whatever happened to capitalism? I guess when you are gonna get free money you suddenly become a Marxist?

By: jasonweaver on 12/21/10 at 10:21

The writer completely missed that this was timed with the Asurion announcement. Notice that the bill drops the requirement to 500 jobs over 5 years. Dean, Kisber and Asurion announced 500 jobs over 5 years.

By: watchdog55 on 12/21/10 at 11:20

Riebeling always offers the same excuse “the administration hasn’t “done a good job explaining” and he usually adds something to the effect a little more homework is needed. I agree, we need a new mayor, but WHO. No one has stepped forward.

I am not as familiar as I would like to be with how all this incentive stuff works. I doubt incentives are only offered to companies to re-locate here. Last week the City Paper reported:

“We are extremely excited to commit to continue to grow our business here in Nashville,” said Asurion President Gerald Risk. “As a management team, we constantly evaluate where is the best location for our team and we’re glad Nashville makes it so easy to continue to locate much of our growth here.”
The expansion is the result of a deal struck with state and local economic development officials, though the parties declined to discuss specific incentives.

"Nashville makes it easy" - "declined to discuss specific incentives." I wonder if we will ever know how much those “specific incentives” will cost the taxpayers of Davidson County. Where is the transparency on that deal?

By: nashtnman on 12/21/10 at 12:20

Oh hell no, this is just another way for Dean to give our tax dollars away to his friends and business swindlers. He is going to pad his friends and his own pocket with even more of our tax dollars. He is a crook and the type of person that has abused our system to the point of over taxation and fraud. How can anyone support this lie? It is bad enough that our "checks and balances" are bought and sold at will by the incompetent and unethical people in office now but to give the liar a blank check is ludicrous. Next thing you know he will want to scrap this if the council will give him the Fairgrounds. This cannot be allowed and if you support it just go right ahead and put your head in the sand so we can get a good swing at your ass in the air.

By: RJP on 12/21/10 at 6:34

rjp Where have checks and balances gone in our city goverments. and not just ours in nashville. Where are the watch dogs that say vote me, put me in office so i can keep you informed on what is going on. Where are the reporters that cover all sides of the story not there one sided opinion! As a volunteer of restoring all things to it once beautiful state. Many of us that live Davidson County and have a business in the fairgrounds area would like some answers to many questions. Lets start with this one, who is in charge of the fairgrounds property, and what is the budget for the fairgrounds. Do we get funding from other counties all over the state, since it is the state fair not the Nashville Fair! The list from a few questions lead to alot more. How did it get to the bad shape it is in. And I was unaware the fairgrounds was the head waters for browns creek.? What time is the clean up crews starting on the creek. MS. TRAIL will you be there to cover the effort, i also would like to see it restored and it's history. Are all the bridge 's over browns creek getting removed or just the park area?Is there a plan to see. Ms. Trail have we asked what the people in the area want in the park, besides cutting down the trees around the creek.Hope to see you there with your chain saw and hearing protection.Fish and wild life also need safe handling. Watch out for the poisonious snakes also! Need a little more good reporting and facts, thanks city paper.good luck Ms. Trail and The tennesse voice.Misstated news and one sided i can do without! Censor ship is the story! and fear of losing your job if you sign a petition. Being told you have no opinion,and you have no comment. How much money for maintenance of the new park . Taking bids .

By: WE231 on 12/21/10 at 7:06

This is a case of CYA (Cover Your Ass) Dean has already made promises he has no authority to make. I suspect it has to do with the Fairgrounds, because anyone who was here in May 2010 or has likely heard of the May Flood isn't likely to want to build an office complex that will be under water should we have another hard rain. Metro is going to have to come up with some serious $$ to make the fairgrounds useable for other than what is there right now. Talk about giveaways and incentives! And, I can't imagine letting my kid play in a park where the ground has been polluted for decades with oil, gasoline, transmission fluid, etc. Another big expense for taxpayers!

Somebody PLEASE, run against Dean or else start impeachment proceedings. We can't afford this power hungry, self-serving mayor. We will be paying for his follies long after he is out of office for good.

By: MAmom on 12/23/10 at 9:46

Good government needs checks and balances. Too much power in one place can be (and with this administration WOULD BE) abused.

Per the article:
"A handful of Industrial Development Board members showed up at Monday’s Budget and Finance Committee meeting to watch from the gallery. Their position seems pretty clear.

“I’m very much opposed to it,” board chair Nick Bailey said afterwards. “What’s accomplished by this bill is reducing the checks and balances and transparency that go into a project of this nature ... And after all, we’re talking about giving away tax dollars for companies to come here."