I’ve talked about the misuse of Enterprise Zone status on several occasions here at the Chronicle (e.g., “A New Kind of Poverty,” “Discussing Incentives with Craig Hullinger“), so there’s no need to go into another lengthy explanation. Here’s a quick summary: the Enterprise Zone is supposed to be used in “depressed areas,” defined as areas “in which pervasive poverty, unemployment and economic distress exist” (20 ILCS 655/3(c)). But the City of Peoria completely disregards this qualification and uses the status indiscriminately throughout the city. See for yourself:
By taking this tool and using it in growth areas, greenfield sites, and other non-depressed areas, the City has not only eviscerated its effectiveness, it’s put depressed areas at an even further disadvantage.
It looks like that trend will continue at tonight’s City Council meeting, as the Council will probably approve extending Enterprise Zone status to the horribly depressed area of — yes, you guessed it — Brandywine Drive. Yes, when one thinks of pervasive poverty and economic distress in the City of Peoria, the first place that pops into my mind is “across the street from Northwoods Mall.”
I don’t want to minimize the challenges faced by all parts of town, but having just come off a huge recession, it’s not surprising to find vacancies throughout the city. We certainly want to do what we can to encourage reinvestment, but misusing incentive tools is poor public policy. It’s dishonest — the wording of the statute is unambiguous that this should only be used in areas of pervasive poverty. It’s unfair — it puts poverty-stricken areas at an even greater disadvantage.
The Journal Star ran an article on this agenda item, and the council members they interviewed (the usual suspects) were all in favor. They have regularly defended the misuse of EZ status by saying “everybody does it,” so those responses were expected. I was disappointed to see new council member Beth Akeson’s response, however:
“I kind of question the use of the enterprise zone in the city, but the city has already set a precedent,” at-large City Councilwoman Beth Akeson said. “Once you set precedent, and once you extend an enterprise zone to (particular) properties, you are hard pressed to do other things than continue on.”
What is she saying? That past misuse of economic development tools has somehow become binding precedent, obligating the council to future misuse? That someone could sue the City for not giving one property the same economic development incentives as another property? If that were true, then every hotel in Peoria should be suing the City for their own pot of gold based on the Wonderful Development incentive package.
The city is under no obligation to extend the enterprise zone to a single additional property. We need not continue every bad precedent set by past councils. We are not constrained to keep repeating past mistakes.
But we will. That’s what we do in Peoria.
http://www.pjstar.com/opinions/ourview/x1078554410/Our-View-If-only-enterprise-zones-were-applied-as-law-intended
If anyone can read this given the PJstar website. An expansion of the exterprise zone into the 4th would involve calling that area “depressed”. These designations are abused. Furthermore, the city’s expansion policy has created the problem in the first place. Pushing for more and more new development means that other areas are allowed to decay. It then cost even more tax payer money to try to kick start the areas. So we are paying the developer to make money with tax dollars through expansion and we are paying other developers to come in a do something with the areas our leaders have decided to allow to blight with our tax dollars as well. Then there is no money left for repairs on existing areas. This will be the set up for the property tax increase coming. Tonight we will here how this enterprise zone is “crutial or critial” The same drinking game during the “shovel ready” days could easily be adapted.
There other areas that legitimately need this tool. The Council SHOULD just say no to this.
Well-written remarks by the author. Agree with all that was said in this post. (and no this isn’t the author writing this comment!)
This looks like a good deal for that strip. Am I suppose to believe that this new enterprising zone is going to scrap plans to build or reinvest in the bad parts of town?
Clayton — You’re asking the wrong question. The question is, will this new enterprise zone extension incentivize reinvestment in depressed areas of town? That’s what the enterprise zone was created to do. If the answer is “no” (and it is), then it should be voted down.
You can put all the incentives together you want, but people aren’t going to invest in the depressed areas of town. Would you?
As for Ms Akeson’s remarks. What would you expect? You can’t change the strips on a tiger and she is a fiscal CONSERVATIVE and she will vote for the money. She talked a good game but I knew sooner or later she would fit right in the groove of the club.
I would expect (but am not holding my breath) that Councilmember Spears will abstain from voting on this issue since he owns property immediately adjacent to those that would be eligible for this benefit. But I’ll predict he’ll vote to approve and at some point in the near future his property will “suddenly” be acquired by the hotel as part of their renovation effors.
Clayton — Whether or not that is true, it doesn’t justify the misuse of incentives.
Emtronics — She hasn’t voted yet. I’m still hopeful she’ll vote against it. Remember, it’s not what council members say that matters, but how they vote.
Remember, this is the same bunch (basically) that very cleverly said no public money was being used to build O’Brien field. A million or two in site prep sure, but that’s not “stadium construction”.
aaannnndddd It passes
The gist of the financial presentation. We’re going to raise property taxes as sales tax is too fluid and EAV values are going to be stagnant. We are ignoring the debt service issue, even though it was a very large part of the blue chart and we aren’t including the hotel bonds.
What should be learned is that we need a more stable tax base. I would suggest instead of creating minimum wage jobs, such as strip malls, warehouse district, museum, the hotel and whatever we will pay for in the new enterprise zone, that we instead target family wage jobs. We keep spending money on items we don’t need or in areas that don’t exist and dont’ have money to fund basic infastructure so there application for state funds when the state is in abysimal fiscal order. It is a map of what all is being done incorrectly. Some of the pension funds are being caught up on, but no ability to meet state mandates. I’ll need to take a look at this further. What needs to happen is to hunker down and meet our basic needs and stop expansions for the next two years to meet our obligations. What will happen will be cutting staff and/or their benefits and raising of taxes.
Paul: They can’t see what they can’t see because they can’t see it. A man convinced against his will remains of the same opinion still. They are not going to get it …. because they are not going to get it for whatever reason(s) they can’t get it. You are wasting your time…. like so many of us have for so many years …. regardless of the facts, the facts rarely weigh into the equation of decision making …. like Gary’s states — just re-arranging the chairs on the Titanic or picking out new fabric for the chairs on the Titanic. Too bad it’s so sad.
This “misuse” in Ent Zones happens in cities all over Illinois. The vast majority of cities use Ent Zones very “liberally”. It isn’t just Peoria.
Sandberg made remarks that reflect what C. J. has mentioned. Interestingly enough, no positive or contradictory comments were made. Van Auken called for the vote, didn’t catch who seconded, Sandberg and Akeson voted against. Motion passed. Neither Spain not Gully were present.
District 150 Observer: No need for the scare quotes. It is misuse, no matter how many other cities are doing it.
“scare quotes?” Huh?
CJ I never said it wasn’t misuse. In fact, I called it just that.
Remember Eric Turner’s words three weeks ago? “We didn’t get re-elected to conduct ‘business as usual'”
Remember Jim Ardis’ words tonight? “Seconded by Councilman Turner.” Oh, how often have we heard those words? It’s always him & Spain in a race to see who can raise their hands first, like first graders trying to impress the teacher.
Looks like it’s business as usual to me, as if I expected Eric Turner to live up to a promise he made. I respect him 110% as a U.S. Veteran, I respect him -10% as a Peoria leader.
D150 Observer: You can learn about scare quotes on Wikipedia here. It’s a standard writing convention. If that’s not what you meant, then I can only assume you put random words in quotes for no apparent reason. That’s cool, but a little confusing.
Well, again, I never said the misuse of Ent Zones is OK. I simply said Peoria is not along–ent zones are widely used just as Peoria uses them.
alone, not along. Sorry
With unemployment as bad as it is I think incentives to facilitate new job and tax producing investment are warranted. Enterprise zones are used through out the State just as Peoria does.
Yes, Criag hullinger give away the entire city to employers who pay $10 per hour and who have such a glut of people wanting jobs they hire a new staff every three months.
Everybody else is doing …. amen!
Craig,
the problem is this, If you can get more economic incentives to build in green fields where developers want to build anyway, then what incentive is there to build where the enterprise zones were originally intended? It just becomes easier to expand leaving a hole in the middle. that is not a good use of space, development, etc.
“With unemployment as bad as it is….”
What was the justification when unemployment wasn’t as bad as it is now? I think this argument is a red herring. These incentives were not designed as an antidote to unemployment. They were designed to revitalize depressed areas. Using them in green fields not only defeats the purpose of the incentives, it actually puts depressed areas at a greater disadvantage. It’s bad public policy.
“Enterprise zones are used through out the State just as Peoria does.”
You mean mis used.