Thursday, March 01, 2007
Here We Go Again with Retail Subsidies
County officials were busy recently hearing a pitch for Settler’s Ridge, a retail/entertainment/lifestyle center to be located in the area near the Mall at Robinson, Robinson Towne Center, the Pointe at North Fayette and a lot of free standing retail on Route 60. The project developer is promising 2,000 new jobs. Of course they will not be net new jobs since many retailers will lose business and reduce jobs. The new development will also contain a 16-screen theater and that certainly means there will be an impact on the nearby theaters.
The developer proposes to use the Allegheny County Redevelopment Authority as a conduit to secure funding from the state’s Infrastructure and Facilities Improvement Program --created in 2004 to provide grants to offset any debt service associated with the project. According to information provided on the state’s Department of Community and Economic Development website, retail establishments are covered by the IFIP.
So while it is on the up and up with the state, recent local experience should give us pause. We know that retail in this region has not produced job growth in recent years and new sites simply transfer activity from one locale to another. The County Redevelopment Authority just closed the books on the multi-year tug of war over Deer Creek Crossing, which had applied for a TIF package. If anything does go forward on that site it will be much different from what was envisioned. The loss of prospective tenants (to the nearby subsidized Pittsburgh Mills), the loss of developers, and eventually the loss of the TIF ensures that the heavily promoted original plan will not happen. Is there a lesson here that is not being learned?
Retail jobs in Allegheny County are down in recent years and sales tax collections are sluggish. More competition is fine and should be welcome as long as it is private capital at risk. More competition that is subsidized by taxpayers is terrible public policy. It is a loser in terms of revenue and it creates unfair competition. The big question is, “Why are public officials still entertaining these subsidy requests?”
The developer proposes to use the Allegheny County Redevelopment Authority as a conduit to secure funding from the state’s Infrastructure and Facilities Improvement Program --created in 2004 to provide grants to offset any debt service associated with the project. According to information provided on the state’s Department of Community and Economic Development website, retail establishments are covered by the IFIP.
So while it is on the up and up with the state, recent local experience should give us pause. We know that retail in this region has not produced job growth in recent years and new sites simply transfer activity from one locale to another. The County Redevelopment Authority just closed the books on the multi-year tug of war over Deer Creek Crossing, which had applied for a TIF package. If anything does go forward on that site it will be much different from what was envisioned. The loss of prospective tenants (to the nearby subsidized Pittsburgh Mills), the loss of developers, and eventually the loss of the TIF ensures that the heavily promoted original plan will not happen. Is there a lesson here that is not being learned?
Retail jobs in Allegheny County are down in recent years and sales tax collections are sluggish. More competition is fine and should be welcome as long as it is private capital at risk. More competition that is subsidized by taxpayers is terrible public policy. It is a loser in terms of revenue and it creates unfair competition. The big question is, “Why are public officials still entertaining these subsidy requests?”
