Don’t Screw Up the Costco Deal

Russ Jehl was the only member of council last night to question the propriety of a deal between the city and Kelley Automotive, among others, that would transfer a large plot at the corner of Lima and !-69 from your ownership to that of Mssers. Kelley and Friends.

Kelley Busse and GiaQuinta

For a bit of background, the area is roughly 30 acres where Seyfert’s Potato Chips once were made. The land was purchased by the city for around a million dollars and designated to become a retention pond to alleviate sever flooding in the adjacent industrial park. Raytheon was very, very angry that on many days each year the small stream running through the industrial park would overflow its banks, damage buildings and make parking lots look like Lake Wawasee. Costs began to escalate on contouring the property to retention pond status, so when a developer came along and offered to cover the city’s expenses, to pay for much of the re-contouring and to develop the area with two key businesses -Kelley Chevrolet and Costco- the administration saw a win-win. Jehl, however, calculated the costs and asked if the city had not bought dear and sold cheap, losing a couple hundred thousand dollars in the deal.

Councilmen Glynn Hines, Tom Smith, Marty Bender and Dr. John Crawford quickly chimed in to support the deal and the enabling legislation. Hines was impassioned that this is what government should do, “facilitate” economic development.” Crawford said it would be “unconscionable” to stop such a promising deal. Smith chortled that “we need to get this done!” And Marty Bender went through a soliloquy recounting how many times the Kelley Family had bent over backwards to make things work for the city and in the city. Then, attorney Mark GiaQuinta, representing the Kelley group, noted that his wife had cheered on his efforts. He said he had many multi-million dollar deals on his desk, but noted that his lovely wife had told him eye-to-eye, “don’t screw up the Costco deal.” Laughter. The vote was 9-0 in favor and because Mr. Jehl asked the critical questions many details of what is a promising deal were presented to the community. Otherwise, as one citizen noted, the process could easily have looked like a sweetheart, insider deal.

And there were abatements on the table last night. Five or six more deals were made to cut taxes on proposed business expansion. The deal is usually a reduction in taxes in exchange for jobs, we tax payers, in effect, chip in a little to stimulate business and create that rising tide that lifts all boats. But in the past the record has been spotty at best. Notoriously, Vera Bradley got a fat break in exchange for creating 490 jobs. Trouble was that they ended contracts with small companies who had done their sewing for a net loss of 110 jobs. You paid to lay people off! And, there was a big tax break that promised the creation of just one job. And there were breaks for companies moving from one side of town to the other with no net increase in jobs. And to add insult, the city staff tasked with overseeing abatements admitted that they relied upon the recipient companies to report whether said company had complied, and could not prove one job had been created for all the tax savings. The issue is coming to a head. Next Monday, the 18th of February, there will be a public hearing on the matter starting at 5:30 pm in council chambers and it will be conducted by the people who pointed out the sloppy nature of the tax abatement program in the first place. The in two weeks a joint city-county committee to reform the shoddy program will present its findings to council… in the open, in public… in contrast to the closed door process managed by County Council President Larry Brown that systematically excluded critics, but invited representatives of the Chamber of Commerce to participate.

Also, last night, citizens again called on the city to move forward with the State Street project during open mic time. Councilman John Shoaff, who has been an adamant critic of the city-state plan announced that talks with the city are proceeding and that compromise is in the air. A public series of hearings and discussions are planned.

There was also a presentation by the Downtown Improvement District in the person of former County Commissioner, soon-to-be county councilman and newly minted DID director, Bill Brown. He was there to make sure the city was happy with the work of the DID which is a shade or two higher than a neighborhood association and which receives substantial funding in the city budget. Council was duly impressed. Comments were very chummy. It might be noted that the DID’s district is the downtown where some 55% of land is owned by government, so the DID is tasked, in part, with keeping the government district tidy.