DEAR EDITOR:
The editorial board of The Dispatch is worried that democracy is
too messy. The editorial board claims that if we hold a referendum
on the city’s proposed giveaway of $5.4 million in incentives to
Newman Development Group, the developer of the Pacheco Pass retail
center, someone might sue the city.
DEAR EDITOR:
The editorial board of The Dispatch is worried that democracy is too messy. The editorial board claims that if we hold a referendum on the city’s proposed giveaway of $5.4 million in incentives to Newman Development Group, the developer of the Pacheco Pass retail center, someone might sue the city. If we as taxpayers dare tell the Council that they’ve made a mistake based on poor and hasty decision making, we’re just “irresponsible.” Funny, I thought that having the right to collectively tell our representatives that they’re damn fools was why all of our ancestors came to this country in the first place.
But let’s follow the money. This certainly won’t be the first time that a community, Gilroy included, tried to make it easy for a company to open its doors. Tax breaks and other incentives are a frequently used tool for economic development.
However, this would be the largest such gift in our history – twice as much as the sum of the nearly 20 incentive packages distributed over the last ten years. It would also be the first time that our city gives an incentive to a project developer rather than to a specific business. And most important, it would be the first time that we had given such incentives without ANY guarantee that the money would be paid back from projected tax revenues.
Imagine this future scenario if the Council approves the giveaway: Newman builds the project and signs five year leases, as required, with Wal-Mart, Linens and Things, Chili’s etc. Wal-Mart generates no new tax revenue, since it’s closing its existing store and moving down the road. As for the other businesses, does the City really believe a chain restaurant, a Linen store, and a party supply outfit will generate $5.4 million in tax revenues in three years? Please. Worse, imagine two years down the road Wal-Mart, the anchor, may see something it likes better and close down. Indeed, there are hundreds of empty ex-Wal-Marts around the country, with its existing store in Gilroy about to join the list. If the economy goes even further south. Chili’s shuts down, and Linens and Things goes bankrupt. Who gets to hold the bag? Take a guess.
There’s a time and a place for everything, and it’s ok for the voters to say that this is neither the right time nor the right project for this kind of giveaway. This is especially true, and needed, if our community’s leadership does not have the common sense and vision to recognize the risk of such an incentive package in our depressed economy where consumer spending has dropped tremendously.
In our time of tightening budgets, the important fact to remember is that the City is losing over $5.4 million dollars of potential impact fees that could go towards us, the citizens of Gilroy, to improve our recreation programs, police and fire protection, roads, parks maintenance, and other city services. It is bad public policy for Gilroy and its residents to have political leadership base its decision to giveaway money on false assumptions and outdated revenue projections based on better economic times. And, this is what the mayor and editorial board are promoting.
The editorial board also tries to convince us that this incentive program has nothing to do with Wal-Mart, even though they’re the anchor tenant, they’re driving the construction process, and their lawyers are doing the talking as was seen at the March 17 Council meeting.
Does the mayor really believe that the prime tenant is not expecting to save a few bucks at our expense, that the developer will not pass some of the savings along? That’s hopelessly naive.
Also, the editorial claims that with or without the incentive program, Wal-Mart will build a Supercenter. Well, maybe. But the issue is whether or not they build their store at their own expense – and take their chances just like the hundreds of large and small business who have never had one nickel in incentives – or do it at our expense.
This is not about union and non-union. It’s about fiscal responsibility and informed decision-making, especially in hard times. And it’s about common sense. If Newman Group promises (like every other company that has received an incentive package) that the taxpayers will be made whole by such and such a date, I’ll reconsider my support for a referendum.
Failing that, I say pass the clipboard, I’m signing on.
Paul Correa, Gilroy
Submitted Monday, April 14 to ed****@****ic.com
