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Frailty, thy name is Economic Development?

Does it seem like everything being done under the Sarasota sun lately is being done in the name of worshiping at the altar of “economic development”?

The ubiquitous use of the phrase bugs me nearly as much as phrases like “Vote for the children,” or “Vote for family values.” I’ve got nothing against looking after children’s best interests, or having values that support families — albeit, for me, families come in all shapes, sizes and sexual orientations. And I largely support the idea of developing a strong platform for attracting and supporting diverse businesses and industries in our community.

But just as I disdain knee-jerk, emotionally based stances on political issues, I don’t think economic issues should be approached with the same stars-in-our-eyes approach that Sarasota has used for way too long to way too little end. Sure, some people got rich off the gold-rush pursuits of the past (think real estate bubble), but many more crashed and burned (think real estate bust).

As a city we seem hell-bent on “economic development” — thrashing about wild-eyed for whatever might get us back into our McMansion/Nadel dreamscape of yesteryear. Hot topic du jour is the concept that the film industry will get us there.

We’re so gaga over the idea of attracting film and entertainment business to the area that several City Commissioners (in the name of “economic development”) were in favor of leasing the much-used (and not-a-dime-subsidized) Sarasota Municipal Auditorium to Ringling College for soundstage use for a measly $1 a year. Thankfully, for once, the audacity inherent in the request, coming as it did from a college well-known for being so well-endowed it would make Jenna Jameson blush, riled up taxpayers enough to squelch the idea.

Of course, that deal would have been small potatoes compared to the heaps of taxpayer dollars Sarasota leaders have already spent pursuing “economic development” crushes that haven’t returned the sentiment. Do I need to remind readers about the roughly $5 million our city and county commissioners spent in pursuit of the Red Sox — for a “deal” that was never anywhere near real?

Do we need to revisit the nearly $800,000 the city commissioners gave away to the New York Times-owned Sarasota Herald-Tribune to help it offset the costs of building new offices on Main Street, at a time when we all knew that newspapers were already economic dinosaurs and when the NYT Regional Newspaper group had already gone on record saying the company’s goal was to build downtown to be “as close to the center of the community as we can manage”? Sarasota gave away 800 large to convince a business to do what it was already planning to do? For a business that has probably laid off more workers in the past few years than it currently even has on staff? Is that really what constitutes “economic development” or “community redevelopment” or “job creation”?

Speaking of which, Sarasota County is creating a “Job Creation Property Tax Exemption” referendum to go on August 24 ballots. Residents will vote on whether or not they want to give existing and expanding businesses a free pass — for 10 years! — on property taxes or tangible personal property taxes. The language hasn’t been completed yet, and so I haven’t reviewed it, but in listening to the presentation at the March 29 County Commission meeting, it seems clear that this exemption is designed to primarily benefit larger businesses that are bringing in a minimum of 25 new jobs (preferably 50) with salaries of over $35,000. At the same time City and County leaders are discussing the issue, in an April 21 Sarasota Herald Tribune opinion column, City Commish Terry Turner describes ad valorem (mostly real estate) tax receipts as being in a “free fall” and identified one option for stabilizing them — by increasing property tax rates. Interestingly, it appears that Turner is also the only City Commissioner who has voted against the exemption program.

There are other criteria, of course, but just based on the first two mentioned, I doubt there’s a snowball’s chance in Florida that any of the gazillion small businesses that are the heart and soul of Sarasota’s economy will make the short list for consideration for the exemption. The mom-and-pop retailers and restaurants up and down Main Street, out on the keys, over in Gulf Gate and sprinkled all throughout the county can just continue to suck wind, I guess.

Sarasota County Chief Financial Planning Officer Jeffrey Seward said that this exemption is about the creation of “jobs, jobs and more jobs.” I think it would have been more accurate to say the exemption is about providing even more tax breaks to businesses in a state that is already very business-friendly. Some might argue that we should give these exemptions to businesses just like we allow limits on property taxes for residents. But Florida is already ranked as one of the five best states for businesses when it comes to taxes in general; and I don’t agree that we have to make ourselves number one in the country by relinquishing the right to collect potentially very significant tax revenues for the next 10 years.

The thing that concerned me about the discussion at the commissioners meeting was that no one ever delivered an estimate of the number of total new jobs that might result from the exemption. And not once was the estimated lost revenue from taxes discussed. Isn’t that Planning 101? If the chief financial planning officer doesn’t have or isn’t offering an idea of what losses (in taxes) and gains (from jobs) might result from the exemption, how can its potential merits be intelligently assessed by the commissioners?

In the name of economic sustainability, rather than simply “economic development,” we need to ask, and get answers for, those kinds of questions. And the one underlying question we all have to ask ourselves is this: Do we really want to make our economic beds with businesses that will only do business with us if we bribe them with rebates and incentives?

The thing about bribes — or incentives, call them what you will — is that when they dry up… the business dries up. In 2007, Florida offered $25 million in entertainment industry incentives and enjoyed a banner year of business from that industry. When the incentives became smaller in subsequent years, the people we’d bribed to come here to make movies and television shows simply packed up and went to other states dangling bigger bucks.

Do we really need to bribe businesses to come to Florida, and Sarasota in particular, to do business, and then have them leave later when a better offer from another state comes along? Florida’s a haven for businesses, isn’t it? We’ve got sun-drenched days perfect for uninterrupted film shoots, a steady supply of labor at all levels, from grunt work to high concept, and no state corporate or personal income tax. Heck, businesses should be paying us.

Yes, I understand that businesses and industries we bribe with incentives bring revenue with them, but the dollar amounts of the incentives — which, remember, come from Dick and Jane Taxpayer — will continue to increase. Are the perks associated with aligning ourselves with industries at the top of the zeitgeist emotionally and culturally but perhaps not economically, worth the risks? I adore both newspapers and films, but I personally wouldn’t invest in either right now.

I know countless small business owners who are in Sarasota for the long haul, who hang out their shingles or put signs up on storefronts not because they’re being bribed into doing so, but because they want to give to and take from the community they love — fair and square. They’re not asking for special subsidies for the sweat equity they’re putting into our city. There are no tax breaks for the little guys who relocate from Detroit and throw down stakes in Sarasota to keep cars running with their mechanical know-how or keep bodies limber with yoga instruction. No handouts for the laid-off secretary who decides to launch a website development business out of her lanai or who bakes the hell out of cupcakes to keep her family afloat.

They’re not glittery entrepreneurs with business school degrees or Ivy League pedigrees, lauded in the business pubs, or swooned over in the society pages. No one would think of rolling out a red carpet for the largely nameless nobodies busting their humps year after year in this town to create and sustain no-frills/low-thrills businesses and jobs for themselves and others. But I guarantee those folks make a more viable backbone for long-term sustained economic stability and growth in our community than fickle filmmakers.

If government is going to be involved in and spend money on economic development for businesses (which I’m not at all sure it should be doing anyway), then I’d prefer them to focus on finding ways to develop and enhance the businesses that are already here — right down to the truly small businesses and including the many creative-type sole proprietors (of which I am one) who support those businesses — and to support new businesses that are committed to coming here and staying here without being paid off to do so.

The payoff is Sarasota. Believe it, and they will come.

(This article will appear in the April 28 print issue of Creative Loafing Sarasota.)

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Posted on April 23rd, 2010Comments RSS Feed
4 Responses to Frailty, thy name is Economic Development?
  1. John W. Perkins
    April 23, 2010 at 11:00 am

    Wow ! Well said, M.C. Well said..

    Who’s Jenna Jameson ?

    Reply
  2. oh, just a friend i used to make movies with 😉 … NOT ! :)

    Reply
  3. Hi Mary Catherine,

    What did Yogi Berra say? It’s deja vu all over again.

    It’s amazing how people will bow and scape before the God of Cahuenga Canyon, aka Hollywoodland. Trenton thought they had a production company – NOT. While many states and cities have extended tax credits for movie production, the jury is somewhat out on whether the tax credits actually made a difference.

    Iowa is eliminating their program due to budget constraits. No more “Bridges of Madison County”.

    Film companies are businesses. They go where the labor costs are low. That’s way many series are based in New York or Los Angeles – that’s where the production people are. While it’s true that “Up in the Air” was filmed in Florida – I knew those downtown shots weren’t my hometown in Cornhuskerland – will tax breaks make a difference in future filming? Maybe, maybe not.

    Tax expenditures – that’s the technical term for targeted tax breaks – take money from other programs. New Jersey’s Legislature just passed a law to see how much all the tax expenditures are really costing the Garden State. Maybe that should be the angle adopted by the Florida Legislature. Don’t hold your breath waiting, however.

    Meanwhile, get those autograph books ready….

    -Howard

    Reply
  4. Wow. thanks for the insights, Howard.

    Reply

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